Tuesday, November 30, 2004

Corporate profits stay high

OPERATING profits for Canadian corporations remained at record high levels between July and September. However, growth has stalled.

Third-quarter profits hit $51.3 billion, identical to the revised level in the previous quarter. The pause follows four consecutive quarters of growth.

On a year-over-year basis, profits were up 19.7% from the third quarter last year. It was the ninth straight year-over-year gain.

Financial statistics cover the activities of all corporations in Canada, excluding government controlled and not-for-profit corporations.

Non-financial industries lost some ground as profits slipped 0.6% from the second quarter to $38.6 billion. One-time charges to operating profits in both the telecommunications and motor vehicle and parts manufacturing industries trimmed the results. Excluding these two industries, non-financial profits rose 2.7%.

Financial sector

In the financial sector, profits climbed 2.1% to $12.7 billion, mainly due to gains by insurance carriers. Chartered bank profits were little changed.

Strong global demand, particularly for nickel, copper and zinc, boosted profits of metal mining companies to $1.2 billion, 63.1% ahead of second quarter levels. Mining profits have risen for five consecutive quarters.

Manufacturers earned $12.5 billion in profits, down slightly from the second quarter. Profits for petroleum and coal manufacturers hit record highs, while red hot steel prices sparked a surge in profits of primary metal producers.

Strong demand from China, coupled with thriving demand from the North American automotive and oil industries, has lifted steel prices to all-time highs.

For more information, contact Bill Potter (613-951-2662), Industrial Organization and Finance Division.

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© 2004, Statistics Canada.