Global troubles taking a bite out of corporate profits in Canada: report

THE CANADIAN PRESS

OTTAWA — An Ottawa-based economic forecaster says growing global uncertainty is taking a bite out of Canadian firms’ profit outlook, particularly in the oil sector.

The Conference Board of Canada says its leading indicator of corporate profitability fell in June for the second straight month, dropping by 0.2 per cent.

The biggest impact was in the normally booming oil extraction sector, which saw its subindex fall 2.4 per cent in June — the steepest decline in nearly two years.

Crude oil prices have dropped dramatically in recent months due to uncertainty about the global economy.

The report says lower confidence in the economy and high consumer debt levels are also starting to have an impact on the real estate and related industries.

On the other hand, manufacturing and related sectors appear to be bucking the trend with a brighter profit outlook.

As well, index of transport equipment manufacturing industry, which excludes autos, posted the strongest gain of all 49 industries covered. It rose 1.2 per cent in June, but that follows four consecutive months of decline.

10:48ET 10-07-12