Industrial capacity use slipped to 81.2% in the third quarter, down from an upwardly revised 81.3% in the previous quarter, Statistics Canada said this morning.

This was the lowest rate since the fourth quarter of 2001, when the rate hit 80.6%, but slightly better than markets had expected.

StatsCan said industrial capacity utilization fell as the value of the Canadian dollar rose against its U.S.counterpart and Ontario’s industrial heartland was hit by the mid-August power blackout.

RBC Financial says “manufacturing industries were largely affected by these factors as capacity in this sector fell to 82.2% from 82.5%. However, this was partially offset by strong increases in mining and other related sectors.”

“Although, Canadian capacity utilization has now fallen 3.7 percentage points from its most recent high of 84.9% in the fourth quarter of 2000, it still sits above comparable U.S. figures where more industrial slack remains apparent,” RBC says. “That said, the recovering U.S. economy has begun to steadily absorb this slack while more capacity has opened up in Canada – a telling tale on the state of the two economies.”

Also released today, the new house price index for October rose 0.4%, slightly lower than the previous month’s increase of 0.5%.

RBC says that this was generally in-line with market expectations. “While there is little bit more slack in Canada’s industrial sector, higher home prices clearly suggest a comparably tighter housing market. Indeed, in some markets, notably British Columbia and Quebec, pricing pressure is indicative of very tight seller’s market conditions. But on balance, housing markets in Canada remain very well balanced. Taken together with today’s capacity utilization report, the new home price index should not have any direct bearing on the Bank of Canada’s view on inflation,” it concludes.