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OTTAWA — After nearly two years of miserable financial news, the Business Development Bank of Canada (BDC) has released some projections that will put a cautious smile on the faces of those in the foodservice businesses. According to the autumn 2010 edition of the “Canadian Industrial Profile Service,” profits in 2010 will rebound by more than 20 per cent.

The Autumn edition, published by The Conference Board of Canada in collaboration with BDC provides a five-year (2010-2014) production, revenue, cost and profitability forecast for six Canadian industries, including food production and foodservice.

“Profits will rebound this year in four of the six industries covered in this outlook. The other two industries — transportation and warehousing, and food and beverage manufacturing — can expect slight declines in profits in 2010,” said Michael Burt, associate director, Industrial Economic Trends. “Weaker economic growth in the second half of 2010 will dampen profitability in 2011 for most of the industries covered.”

“Despite signs of recovery, entrepreneurs have had difficulty accessing working capital. To address their needs, BDC has increased its financing activities and, for most industries, posted double-digit growth in loan dollars authorized. BDC loans to the accommodation sector increased by 55 per cent in fiscal 2010 compared to fiscal 2009,” said Jérôme Nycz, BDC vice-president, Strategy and ERM. “We also took the initiative and promoted an Economic Recovery Loans Program from July to October. Almost 3,800 entrepreneurs took advantage of the program and received pre-authorized BDC loans to finance their operations.”

Consumers started returning to restaurants and spent more dining out, thanks to strong job creation in the first half of 2010. Full-service restaurants suffered the worst of the recession’s effects, and sales in this segment are proving slow to recover. However, rising sales and price increases will allow industry profits to recover to their pre-recession peak of $1.3 billion in 2010.

The Canadian Industrial Profile Service is part of The Conference Board of Canada’s Industrial Economic Trends research. Outlooks for 23 industries are completed each year. The publications are available here.

 

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