Economy rebounding, but ‘profit recession’ persists for corporate Canada

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Toronto's TMX office and ticker board at the First Canadian Place.

OTTAWA — Don’t look now, but recent signs of a tentative economic recovery may be masking another, possibly deeper, problem: a “profit recession.”&nbsp

Pullbacks in production by two of Canada’s biggest sectors — energy and manufacturing — have hit overall business profits hard in recent months: In the first quarter of 2016, corporate earnings fell by the most in more than five years, Statistics Canada reported Thursday.

The oil and gas sector, alone, has seen earnings drop in each of the last five quarters.

“It’s a profit recession, but for equity markets, this is old news,” said Avery Shenfeld, chief economist at CIBC World Markets.

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