MRO Magazine

Industry profitability outlook remains positive, says Conference Board of Canada

Ottawa, ON -- The Conference Board of Canada's Leading Indicator of Industry Profitability Index edged up 0.3% in April, marking eight consecutive months of increases. Thirty-nine of the 49 industries covered saw gains in their indexes....


Ottawa, ON — The Conference Board of Canada’s Leading Indicator of Industry Profitability Index edged up 0.3% in April, marking eight consecutive months of increases. Thirty-nine of the 49 industries covered saw gains in their indexes. Although still high, that is a slight drop from the previous two months. The broad-based gains in a majority of industries are a signal that corporate profits will continue to improve through the summer.

Even though the economy is generally moving in the right direction, the recovery remains somewhat fragile. This means that any unwelcome news — such as natural disasters in Japan, conflict in the Middle East and North Africa, debt crises in some European countries, or Moody’s downgrading of US debt — can have negative implications for the economic recovery.

Major factors contributing to the positive growth in the Leading Indicator of Industry Profitability are strong raw material prices (up 22% over the last six months) and gains in the stock market. The high prices for grains and oil seeds, petroleum products, and metals point to an improving profitability outlook for many goods-producing industries.

Agriculture, oil extraction and mining have reported some of the biggest monthly gains. Strong growth in global consumption is also supporting the positive outlook for many of these industries.

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