Global| Aug 27 2003Canadian Business See Quarterly Profit Decline after Strong Recovery
Summary
Operating profits of Canadian companies fell 7.3% in the second quarter after five consecutive quarters of gains. Thus, even with this latest quarterly decrease, they were still 11.2% ahead of a year earlier. Within the nonfinancial [...]
Operating profits of Canadian companies fell 7.3% in the second quarter after five consecutive quarters of gains. Thus, even with this latest quarterly decrease, they were still 11.2% ahead of a year earlier. Within the nonfinancial sector, net profits after taxes showed the same general pattern – down on the quarter, but well ahead of last year – and also reveal a differential performance of manufacturing and non-manufacturing firms.
As noted in the chart below, manufacturers’ earnings rebounded sharply in the second half of 2002 after their recession-related downtrend in 2001. They remain, however, subdued relative to prior peaks. Non-manufacturing firms (calculated as a simple difference between total nonfinancial profits and those of manufacturing companies) also saw significant gains late last year and in the first quarter of 2003, although by contrast, the profits of these industries – trade, travel, nonfinancial business services, health care and so on – reached new highs early this year. Their recessionary decline was not so protracted nor extensive as that of the factory sector, so their subsequent rebound has been able to surpass its previous magnitudes.
| Percent Changes | Q2 2003 |
Q1 2003 |
Year/Year | 4th Qtr/4th Qtr|||
|---|---|---|---|---|---|---|
| 2002 | 2001 | 2000 | ||||
| Nonfinancial companies | -10.2 | 19.2 | 30.4 | 69.8 | -44.0 | 1.2 |
| Manufacturing | -9.7 | 49.8 | 22.0 | 28.4 | -33.9 | -37.9 |
| Non-Manufacturing | -10.4 | 8.6 | 34.8 | 91.0 | -48.0 | 35.4 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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