Leading Indicator of Industry Profitability: March 2019

The Conference Board of Canada, March 8, 2019
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The monthly Leading Indicator of Industry Profitability is constructed from high frequency data series. The indicators are designed to be predictive of movements in corporate profitability six months hence. An industry leading index is created for the economy as a whole, as well as for 49 individual sectors within the economy, thus providing coverage for most of the private business activity that takes place in Canada.

Document Highlights

  • With mixed signals from Canada’s economy, The Conference Board of Canada’s Leading Indicator of Industry Profitability remains stable in February, unchanged from its January value. Overall, 28 of the 49 industries included in the index increased in February, down from 30 in January.
  • Rising interest rates and the slowing Canadian economy are weighing on the housing market and non-residential investment, suggesting a weaker profitability outlook in the near term for those industries and having negative spillover effects on retailers and wholesalers.
  • The still-low value of the loonie impacts the profitability outlook of industries differently. It helps to support profits for export-oriented firms but squeezes margins for industries that are heavy importers.

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