The Canadian Press

Canada’s economy has shown some tepid signs of recovering but the Conference Board says that most industries it tracked in a recent study are still experiencing financial trouble.

A report from the group suggests profits are expected to fall more than 20% this year in most of the six industries it monitors in an industrial report, which include food services, retail, transportation and wholesale.

Michael Burt, the associate director of industrial economic trends at the Ottawa-based forecaster, said all of the industries are grappling with the effects of lower demand and downward pressure on prices.

The Conference Board’s study, completed in collaboration with the Business Development Bank of Canada, noted that transportation sector profits have fallen 29% to $5.2 billion, and that the impact has spread to different segments of the industry, including air, rail, water and road transportation.

Wholesale profits also declined as lower demand in the auto and construction sectors helped pull overall results down to $11.2 billion.

The Canadian shopper hasn’t given the retail sector much to cheer about as both lower consumer demand and price cuts have slashed its profits by 32% to $8.6 billion.

Food services also declined as lower results in full-service restaurants diminished profits to $826 million from $1.2 billion.

Fewer foreign travellers visited Canada, which contributed to pulling down profits for hotels and other accommodations by 8% to less than $500 million after dropping 25% last year.

Burt noted that the numbers look particularly dramatic because they’re compared to financial results logged a year earlier, before the recession took hold.

“If you look at where we are right now, even if we’re flat month-to-month compared to where we were in summer of 2008, it can be a significant drop in activity,” he said.

“What we’re seeing now are varying effects. There’s some indications the economy has found a bottom and may be starting to improve a little bit.”

The Conference Board remained optimistic about a recovery in the transportation, retail and wholesale industries as the recession winds down, but noted that the hospitality and food services industries might face a tougher battle if an H1N1 outbreak occurs.

“These industries were among the most affect as a result of SARS and a serious H1N1 pandemic here in Canada would definitely have a negative effect on them,” Burt said.

However, not all of the findings were dismal. The report said food and beverage manufacturing has proven to be relatively recession-proof with a slight uptick to $3.4 billion, with domestic food demand holding steady and exports rising despite the stronger loonie.

Bank of Montreal economist Michael Gregory said he believes optimism is key when looking towards the results for next year.

“As the dust settles I think corporate Canada is probably in much better shape than they have (been) coming out of any other recession,” he said.

“Yes the recession hurt, but business bankruptcies have actually declined during this recession.”

He said Canadian industries began making major adjustments to productivity and efficiency to contend with the loonie’s parity in late 2007, which better prepared them to face further economic woes.