Ottawa - The Leading Indicator of Industry Profitability Index from the Conference Board of Canada continues to advance modestly, signalling short-term gains in corporate profitability. However, a significant number of industries still face expected declines in profitability, thereby limiting the gains in the overall index and making it vulnerable to unexpected shocks.
Positive economic news from the US is boosting the outlook for many Canadian industries. In particular, the past few months have brought a spate of favourable reports on the US housing market. The index of US builder sentiment continues to improve, reaching its highest level in more than six years. Higher home sales, along with lower inventory of homes for sale, have pushed up home prices. This confluence of events has led to a spike in construction spending, with strong gains in home building and business investment. This has resulted in an uptick in both demand and prices for Canadian wood products, lifting the prospects of the wood product manufacturing industry. The index for the industry has been moving up since June 2012.
The positive news has also percolated to other makers of construction materials. For example, the non-metallic mineral product manufacturing industry index has grown for three consecutive months. This industry transforms mined and quarried non-metallic minerals, such as sand and stone, into products used mainly for construction.
• Positive economic news from the US is boosting the outlook for many Canadian industries.
• The mining industry has been on a considerable downward slide, with its profit index dropping for the past seven months straight.