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Corporate profitability outlook flat on mixed data

Ottawa - The Conference Board of Canada's Leading Indicator of Industry Profitability saw little change in January 2014, increasing by 0.1%, following strong gains in the last quarter of 2013.



Ottawa – The Conference Board of Canada’s Leading Indicator of Industry Profitability saw little change in January 2014, increasing by 0.1%, following strong gains in the last quarter of 2013.

The short-term outlook for industry profitability was hurt primarily by weak December labour numbers. The weak employment numbers have combined with underwhelming wage growth to hurt consumer spending, and that has put the emphasis on exports to drive sales and profits.

The flatness in the overall index was matched at the industrial level, with only 27 of the 49 industries covered here showing an improvement. The results were also mixed within the sectoral groupings. For example, within the goods-producing sector, oil extraction was hurt by a drop in prices that was driven by uncertainty in the emerging markets. At the same time, gas extraction saw its profitability outlook improve on higher prices and inventory withdrawals due to the colder-than-normal winter in the United States.

Within the manufacturing sector, the transportation equipment, wood products, and paper product industries all experienced gains thanks to the weaker Canadian dollar, while the computer and electrical equipment product industries continued their string of declines.


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