Corporate profits down 6% to start 2015, Statistics Canada says
Profits at Canadian companies fell six per cent in the first three months of 2015 to $75.4 billion, Statistics Canada said Thursday.
It's the second consecutive quarterly decline, down from 9.1 per cent in the last three months of 2014. Twelve out of 22 industries the data agency monitors made less money.
Profitability in the financial industry held up fairly well, only dropping by 0.2 per cent to $19.7 billion. That's an improvement from the almost 20 per cent contraction that financial firms saw to close out 2014.
But non-financial firms couldn't stanch the bleeding, with profits declining by 7.9 per cent in the quarter to $55.7 billion.
Within that, the oil and gas extraction sector was a financial disaster. Profits dropped an eye-popping 128 per cent on the quarter, from $2.2 billion at the end of 2014 to a loss of $631 million to start 2015.
Even for a sector where profit swings are typically wide, that marked the largest decline on records dating back to 1988, TD Bank noted.
"The drop in corporate profits was expected," TD's economist Leslie Preston said. "Unfortunately, it isn't over yet."
"Profits are likely to be weak in Q2 as well as the knock-on effects of lower energy sector profits hit other industries," Preston said.
