Corporate operating profits, bolstered by the surging oil and gas industry, hit their second consecutive record high in 2005, Statistics Canada reported today.

Corporations earned operating profits of $249.9 billion, surpassing by 14.9% the previous record of $217.5 billion set in 2004.

The improvement was broadly based, the government agency said. Profits in the non-financial industries jumped 17.2% to $186.2 billion and those in the financial industries rose 8.6% to $63.7 billion.

Growth in the non-financial industries was driven by energy-based industries. Companies engaged in oil and gas extraction and support activities, utilities operators and petroleum and coal product manufacturers, earned combined profits of $54.5 billion. They accounted for almost half of the $27.3 billion growth in the non-financial industries.

Interest rates remained near their historic lows, much to the benefit of the real estate and construction industries.

The construction industry, buoyed in part by energy related infrastructure projects, recorded robust gains with operating profits increasing 26.9% to $8.4 billion. Profits in the real estate industry grew at a more modest rate of 6.4%, reaching $8.6 billion.

Not every segment of the economy was firing on all cylinders. Manufacturers experienced a challenging and difficult year, as a result of fierce global competition, a continued strong Canadian dollar relative to the US dollar and higher energy costs.

Economic conditions continued to provide a favourable climate for banking, financial services and wealth management enterprises.

Operating profits for the financial industries improved by 8.6% to an all-time high of $63.7 billion, surpassing the previous high set in 2004.

Depository credit intermediaries, led by the chartered banks, posted total operating profits of $24.9 billion, up 5.3% from 2004. They accounted for more than one-third of the profits in the financial industries. The gains were supported by higher net interest income due to strong demand for consumer and corporate loans and by other fee-based services.

Corporations involved in securities and commodity exchanges and other financial investment activities had another banner year. Operating profits increased for the third consecutive year, hitting $14.7 billion in 2005, up 17.4% from 2004.