Canadian industries operated at 78.9% of their capacity in the second quarter of 2008, down from 79.6% in the first quarter.

It was the fourth straight quarterly drop as the automotive and forestry sectors saw a continued drop in demand from abroad, Statistics Canada said.

The drop, which affected all sectors in the second quarter, was less pronounced than in the two previous quarters, the government agency noted.

“The decline in the utilization rate, while general, was especially pronounced in the forestry, mining and electrical power sectors,” StatsCan said in a release.

Manufacturers reduced production capacity utilization, operating at 76.7% compared with 77.2% in the first quarter, mostly due to reductions in the transportation equipment, wood products and plastic and rubber products industries.

Transportation equipment manufacturing industry utilization fell 2.4 points to 74.5% on a slowdown in U.S. demand for automobile products.

Wood products makers saw production capacity fall to 65% from 66.8%, also on weaker U.S. demand.

Increases were seen in machinery manufacture and the petroleum and coal products industries.

Machinery manufacturers boosted production capacity utilization four points to 84.5% on increased production of machinery for agriculture, construction and mining extraction.

Oil and gas and coal products sharply increased capacity utilization 5.2 points to a 82.9%. Output rose 5.9%.

The forestry sector saw output fall 4.3% and capacity utilization fall to 74.8% from 76.8%, the lowest rate since the first quarter of 2002.

IE