Capacity use among industries fell for the first time in a year during the first quarter of 2005, even though the rate hit a record high in the manufacturing sector.

Statistics Canada said industries operated at 86.4% of their capacity between January and March, down slightly from 86.6% in the fourth quarter of 2004.

The decline put the current rate at 1.2 percentage points below the high of 87.6% in the first quarter of 1988.

StatsCan said capacity use hit a record level in manufacturing because of an increase in demand for durable goods.

However, it fell significantly in the forestry and logging sector, and in the mining and oil and gas sectors, as well as dipping slightly in the electrical power and construction sectors.

Capacity use is the ratio of its actual output to its estimated potential output.

Manufacturers operated at a record 87.0% of capacity in the first quarter of 2005, up from 86.5% in the previous quarter. StatsCan said rates increased significantly among manufacturers of computer and electronic products, machinery, fabricated metal products and non-metallic mineral products.

There were widespread declines among other sectors.

After posting good results throughout 2004, capacity use in the forestry and logging sector tumbled from 97.3% to 92.7%. This was the largest decline since the third quarter of 2003 when the rate slipped 7.7 percentage points to 82.9%. Output in this sector dropped 4.7% in the first quarter.

In the oil and gas extraction sector, the rate was 80.4%, down 1.8 percentage points from the previous quarter. Despite high crude oil prices on international markets, labour shortage and maintenance problems in oil sands processing accounted for a 2.4% drop in this sector’s output.

Rates in the mining sector fell from 95.2% to 91.5%. Reduced production in metal mines and in extraction support services was largely responsible for a 3.6% drop in output.

In the construction sector, investment in non-residential construction was responsible for a 0.5% increase in output, which was more than offset by the increase in production capacity. Consequently, the capacity utilization rate for this sector dipped 0.5 percentage points to 84.4%.

In the electrical power sector, the relatively mild weather in January and February reduced power demand. The sector’s capacity use fell from 88.0% to 87.6%.