OTTAWA – The Conference Board says the profit outlook for Canadian firms is improving after a fallow few months in the spring and summer.
The think-tank’s latest leading indicator for industry profitability rose by a significant 0.7 points last month, the largest monthly jump in about four years.
With the October increase, and more modest gains from the previous two months, the index is now 1.2 per cent higher than it was last year at this time.
The think-tank says the profitability outlook was aided by several factors, including the recent run-up in the stock market — an early indicator for profits — a decline in the unemployment rate and renewed commitment by the Bank of Canada to keep interest rates low.
Overall, 32 of 49 sectors covered showed increases in October with oil extraction posting the largest gain. Also showing improvement were agriculture, gas extraction, mining, and utilities.
However, manufacturing continued to struggle with the wood and paper product industries posting four straight months of declines, while the short-term outlook for motor vehicles and parts has also eroded, the Conference Board says.