As Canada’s benchmark stock index trended lower Tuesday morning amid global growth concerns, the Conference Board of Canada projected weakened corporate profitability in 2011’s second half.
“The dismal economic recovery south of the border, as well as supply-chain disruptions linked to the Japanese earthquake and the dampening effects of rising inflation on consumer spending have all contributed to the deteriorating profitability outlook,” said conference board economist Lin Ai.
The conference board’s leading indicator of industry profitability declined in July for the first time in nearly a year.
The Toronto Stock Exchange, meantime, was down nearly 90 basis points to 12,593 in midday trades Tuesday on reports of disappointing growth numbers out of the eurozone.
Despite positive exports numbers out of B.C. in the first half of 2011, the conference board said many Canadian manufacturing sectors experienced drops in July.
The general economic malaise extends to service industries such as insurance and real estate, the conference board added.
Joel McKay
Twitter:jmckaybiv