Canadian industry sagging.

Paulb just sent in a link to this article in today's Globe and Mail with the bad news that we're producing a lot less than we could be.

Canadian industries cut back their use of production capacity to the lowest point in three years in the third quarter as demand for autos diminished and the residential construction market cooled.

Industries operated at 84.2 per cent of their capacity, marking the third straight quarterly decline and the first time since the third quarter of 2003 that the rate's fallen below 85 per cent, Statistics Canada said Wednesday.

The report comes after a spate of gloomy news on the economic front. Canadian exports to the U.S. are falling and labour productivity has declined for the past two quarters. Bank of Canada Governor David Dodge said Monday that North American growth through to the first quarter will be weaker than he'd thought.

“Not a great picture on Canada in the third quarter,” said Stewart Hall, market strategist at HSBC Securities (Canada) in a note.

The Canadian dollar is dropping against the US dollar, which in turn is looking not-so-hot against the Euro. This could potentially help us with favorable export conditions, but:

“Gains in exports were not enough to offset the slowdown in demand for automotive products and the cooling residential construction market,” the report said.

So if you care about Canada and our economy it's time to get out there and get shopping. It is the gift-giving season after all, so grab your credit cards and get buying. If you're trying to figure out what to give me, I could use a new car.