16 Aug 2011

Canada corporations’ profits expected to decline

Some of Canada’s major corporations are expected to see revenues fall in the second half of the year, according to the latest report issued by the Conference Board of Canada.

Based on the CBC’s Leading Indicator of Industry Profitability index, earnings will falll for the first time in more than a year.

Lin Ai, an economist with with the CBC, said Canadian businesses are being affected by global instability in countries’ financial markets.

“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 Ai.

While most of the losses are believed to affect the manufacturing sector, the CBC says real estate and insurance companies will be as well, primarily due to declining consumer confidence and weak spending.

Another potential factor for corporations’ losses, according to the source, is rising debt levels due to company expenses.

Though the report concerns major industries, most of them started as small businesses. Entrepreneurs with hopes of making it big may want to consider renting out a space through Jiffy Home Office. It can serve as an ideal way to expand a home business venture on a budget. 

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