Canada’s use of its industrial production capacity slowed in the fourth quarter of 2006 to its lowest level in over three years.

Statistics Canada today reported that industries operated at 82.5% of their capacity at year-end, down from 83.4% in the third quarter. Production capacity use dropped in each consecutive quarter last year.

With industrial output down, increased demand both in Canada and abroad was largely met by inventory reductions, the government agency said.

The fourth-quarter rate was 4.6 percentage points below the recent high of 87.1% reached in the second half of 2000 during the tech sector boom.

StatsCan said all sectors that comprise the industrial group posted lower rates in the fourth quarter.

Hit hard by the higher Canadian dollar and foreign competition, Canada’s manufacturing sector cut its capacity use for a fourth consecutive quarter to 81.4% for the final three months of last year. That was off from 82.2% in the third quarter.

Overall, 12 of the 21 groups in the manufacturing sector, representing close to 63% of total production, used less of their capacity between October and December.

Separately, StatsCan reported that new motor vehicle sales declined 3.3% in January. January’s decline follows two strong monthly increases.

However, the 144,136 vehicles sold in January was the second highest sales level in the last 18 months, exceeded only by December 2006.

http://www.statscan.ca/Daily/English/070314/d070314a.htm