Corporate profits managed to grow at the end of last year despite softness in the Canadian economy, Statistics Canada data suggested Tuesday.
The federal agency said Canadian corporations reported operating earnings of $72.5 billion in the fourth quarter, up 1.4 per cent from the previous quarter.
But that was well below the 3.9 per cent increase recorded in the third quarter.
Compared with the fourth quarter a year earlier, profits were down 1.2 per cent, and for all of 2012, they were up 0.8 per cent — the slowest rate of growth since the recession took hold in 2008.
Manufacturing profits were flat as a large gain by auto assembly and parts manufacturers of 33.2 per cent was offset by a decline in the petroleum and coal industry, where income fell 26.5 per cent.
The oil and gas extraction sectors watched their profits plummet by 22.7 per cent, the sixth consecutive quarter of decrease amid a continuing price differential between benchmark Brent crude and Western Canadian Select from the oilsands.
"Canadian oil producers are clearly feeling the effects of a relatively depressed pricing environment, TD economist Jonathan Bendiner in a commentary.
Investment intentions data released Wednesday
"It will be interesting to see how these results weigh on future investment decisions," Bendiner said.
Clues about that trend will come on Wednesday, when StatsCan releases its survey of private and public investment intentions.
In the financial sector, operating profits slipped 0.4 per cent to $19.4 billion, after rising 5.3 per cent in the third quarter.
Growth in that sector, said Bendiner, has been constrained both by slowing expansion in the housing market and by homeowners trying to pare down their high debt loads. Low interest rates also have cut into profits.
But profits increased in 13 of 22 industries, with insurance carriers and related activities reporting the highest increase, a rise of 29.7 per cent to $2.4 billion.
Firms in the construction sector saw profits rise 12.7 per cent to $4 billion, while information and cultural industries increased 7.4 per cent to $5.9 billion.
In the non-financial sector, fourth quarter operating profits rose 2.1 per cent to $53.1 billion after a 3.4 per cent increase the previous quarter.
Bendiner suggests more hope lies ahead, predicting corporate profits should pick up moderately "once the recovery in the U.S. economy has gained full traction towards the second half of 2013."