Leading indicator of industry profitability: July 2019
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.
- The Conference Board of Canada’s Leading indicator of industry profitability increased for a ninth consecutive month in June. Gains were broad-based across the economy, as 35 of the 49 industries tracked registered an improvement in their outlook.
- Service-producing industries led the way this month. The profitability outlook improved for 13 of the 17 industries included in the index. Most service-producing industries rely heavily on the domestic economy, and tight labour markets are finally producing robust wage growth, which is fuelling consumer spending and demand for their products.
- Although an uncertain trade environment persists, export-intensive manufacturing industries continue to benefit from robust economic growth south of the border and a still-low value for the Canadian currency, which props up demand and provides an effectively higher price on foreign sales. Twelve of the 17 manufacturing industries saw their profitability outlook improve in June.