Capacity also has a more subtle meaning when used in conjunction with productivity. In economic terms, we often talk about a nation's production capacity, or factories manufacturing at near peak capacity. In these cases, there is a theoretical limit or capacity, when speaking about output or efficiency of productivity, given the constraints of labor, machinery, etc.

Productivity is how fast goods and services can be produced or rendered. Capacity is how much something (warehouse, vehicle, restaurant, etc) can hold. For example: (1) The restaurant has a maximum capacity limit of 100 people. (2) A Toyota Camry has a limited carrying capacity. (3) The airplane has reached full capacity, there are no more seats available. (4) We have sold 100 more units this month. Our productivity has increased. Hope that helps.