05/26/2011 12:07 EDT | Updated 07/26/2011 05:12 EDT

Corporate Profits Rise In Q1, Half Of Industries Report Increases: StatsCan

OTTAWA (CP) - Operating profits for Canadian corporations continued to grow in the first three months of this year, but at a slower pace than in recent quarters, as the economic recovery loses momentum.

Following the hefty 7.9 per cent climb in the fourth quarter of 2010, first quarter profits climb by 4.2 per cent to $65.4 billion.

On a year-over-year basis, profits for all industries were up 8.1 per cent from last year.

"Like the broader Canadian economy, corporate profit growth has moderated from the double-digit gains recorded in the early months of the recovery," said TD economist Francis Fong.

Fong added the report was on balance "positive" because it shows firms still recording solid revenue and profit growth.

"Going forward, we anticipate corporate profit growth to moderate further in line with the economy, but should continue to benefit from a stronger export profile and elevated commodity prices," he said.

Statistics Canada said 11 of 22 industries reported higher profits in the first quarter, led by the financial sector, manufacturing, and the oil and gas industry.

The resource sector was particularly strong, with oil and gas profits rising 16.6 per cent, and petroleum and coal manufacturing profits up 38.5 per cent. Both benefited from high commodity prices and greater exports.

In the financial sector, profits rose 10.1 per cent to $17 billion, their second straight increase.

In the non-financial sector, profits increased 2.2 per cent to $48.4 billion, their third straight quarterly increase.

The agency says non-financial growth was led by the manufacturing industry, particularly petroleum and coal manufacturers, and by the oil-and-gas industry.

In the financial sector, the growth was led by depository credit intermediaries.