Operating profits for Canadian corporations continued to grow in the first three months of this year, but at a slower pace than in recent quarters, as the economic recovery loses momentum.
OTTAWA: Operating profits for Canadian corporations continued to grow in the first three months of this year, but at a slower pace than in recent quarters, as the economic recovery loses momentum.
Following the hefty 7.9% increase in the fourth quarter of 2010, first quarter profits rose 4.2% to $65.4 billion.
On a year-over-year basis, profits for all industries were up 8.1% from last year.
“Like the broader Canadian economy, corporate profit growth has moderated from the double-digit gains recorded in the early months of the recovery,” said TD economist Francis Fong, who added the report was on balance “positive” because it shows firms are still recording solid revenue and profit growth.
“Going forward, we anticipate corporate profit growth to moderate further in line with the economy, but should continue to benefit from a stronger export profile and elevated commodity prices,” he said.
Statistics Canada said 11 of 22 industries reported higher profits in the first quarter, led by the financial sector, manufacturing, and the oil and gas industry.
Manufacturing profits rose 10.8% to $12.5 billion compared with the previous quarter. Most of the increase came from the petroleum and coal products manufacturing industry where profits rose 38.5% to $3.1 billion. Other contributors were fabricated metal product and machinery manufacturers, alcoholic beverage and tobacco manufacturers, and primary metal manufacturers.
Profits for the oil and gas industry were up 16.6% to $3.6 billion in the first quarter. Much of this gain came from higher oil prices and greater exports. It was the third consecutive quarter of growth in oil and gas.
© 2011 The Canadian Press
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