Ottawa - The Leading Indicator of Industry Profitability overcame a weaker-than-expected labour market report to advance for the fourth consecutive month in May 2014, increasing from a revised reading of 107.8 in April to 108, according to the Conference Board of Canada.
May was also a strong month at the industrial level, with 34 of 49 industries tracked by the index seeing their near-term profit outlooks improve. After an unsteady first four months of the year in the service sector (which saw more industries decline than advance), the sector posted a strong May, with only 3 of the 17 service industries declining.
The natural resources and utilities industries continued to perform well, and the outlook for the manufacturing sector remained relatively strong thanks to the weaker Canadian dollar and a recovery in the US after a slow start to the year there.
The better near-term outlook for the service sector following a poor first quarter was driven largely by a turnaround in the financial services industries. All of the financial services industries followed by the index (banking, life insurers, property and casualty insurers, and other financial services) saw their profitability outlook improve for a second consecutive month. The most pronounced improvement was in the banking industry.