According to Statistics Canada, the operating profits of Canadian companies amounted to $71.9 billion dollars in the second quarter of 2012. This is a decline of 4.9% compared to the preceding quarter while the last two quarters of 2011 were up.
The decline of operating profits for Canadian companies can be felt in most industries since it affe
cts 15 out of 22 sectors. The manufacturing industry and the oil and gas extraction industry have seen the deepest retreat, followed by the insurance industry.
Operating profits in the manufacturing sector also saw a decline of 9.8% to reach $12.2 billion dollars in the second quarter of 2012. Among the most affected areas are primary metal manufacturing (-51.8%) and petroleum and coal product manufacturing (-18.1%). However, the decline was less than expected due to the good performance of automobile and parts manufacturers and that of rail, aviation and naval manufacturers. Profits of the oil and gas extraction industry fell 31% to settle at $2.7 billion dollars. The trend was due to the decline in oil prices during the period studied and the more significant gap between the price of Canadian crude oil and the North American reference index of crude oil, the West Texas Intermediate.
In the financial sector, the trend was also downward. Operating profits there fell by 4.6% to reach $19.7 billion, after having seen an increase in the first quarter of 2012. The cause was the insurance industry whose profits declined by 30% and stood at $2.7 billion dollars.
Sectors in better shape
Among the rising sectors, the information and cultural industries increased their profits by 6.6% to reach 5.1 billion dollars, driven by the telecommunications industry. The mining industry also increased its profits by 8.1% to reach $2.1 billion dollars.