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Canada: Factory Profit Margins at 11 Year High

ByThe National Bank of Canada
Published 02/26/2012, 12:58 AM
Updated 05/14/2017, 06:45 AM

Corporate Canada ended 2011 on a very strong footing. According to Statistics Canada, corporate profits rose 9% sequentially in Q4, the best showing in two years. The performance of the manufacturing sector was even more impressive with factory operating profits excluding petroleum & coal products surging 18.1%. While motor vehicles & parts accounted for close to two-thirds of this surge, the fact remains that nine of the twelve major industry groups reported higher earnings. As today’s Hot Chart shows, the level of factory profits in Canada stood at an eleven-year best in Q4. Impressively, we note that profit margins also shot up to their highest level since 2000Q4. This is quite an achievement when you consider that eleven years ago, the loonie was worth only 65 cents U.S. as opposed to trading at par today. This suggests that earnings growth in Canadian manufacturing is increasingly driven by productivity gains as opposed to a cheap currency.

Canada Factory profit margins at an eleven-year best!

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