Canadian corporate profits dropped at start of 2013

Statistics Canada says corporations earned $74 billion in operating profits in the first quarter of 2013, down 1.2 per cent from the previous quarter.

Profits at Canadian companies declined 1.2 per cent in 1st quarter

Canadian corporations earned $74 billion in profits last quarter, down slightly from the three months before that. (Issei Kato/Reuters)

Statistics Canada says Canadian corporations took in $74 billion worth of operating profits in the first three months of 2013, down 1.2 per cent from the amount they made in the last quarter of 2012.

The data agency said Tuesday corporate profitability increased by 1.4 per cent during the previous quarter.

Corporate profitability "is likely to remain under considerable pressure this year," boutique research firm Capital Economics said in a note following the release of the data.

"Under these circumstances, we expect growth in business investment and payroll employment to be fairly modest this year."

Insurance profit declines 16%

Operating profits decreased in 14 of 22 industries, led by insurance and related activities. Profits declined by 16 per cent to $3.9 billion in that industry.

Also losing ground were securities, commodity contracts and other financial investments, which fell 4.2 per cent to $5.5 billion.

Non-financial firms fared comparatively worse, with operating profits rising by just 0.3 per cent to $53.6 billion, following a 0.9 per cent increase in the previous quarter.

Retail trade profits increased 1.7 per cent to $4.1 billion while profits for manufacturing industries declined 1.0 per cent to $12.1 billion and wholesale trade profits fell 3.0 per cent to $5.7 billion.