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Bank of Canada Governor Stephen Poloz recently reiterated his belief that the country's economic soft patch will soon end and an export-led domestic economic recovery is just around the corner. For investors, identifying the stocks representing companies that will profit most from the expansion is potentially lucrative.

"Many firms are close to their capacity limits, which augurs well for future investment and new job creation," Mr. Poloz noted in a speech in Whitehorse on Wednesday. To uncover these firms where sales growth is testing the limits of production, I looked for stocks in the S&P/TSX composite index where analyst estimates of future profits were rising most quickly.

The accompanying chart displays the four-week and three-month change in analyst earnings estimates for all of the S&P/TSX composite's major subindexes. (The S&P/TSX health care index, which consists almost entirely of a single beleaguered stock, Valeant Pharmaceuticals International Inc., was omitted primarily because the outlook has deteriorated so much it doesn't fit on the chart.)

The aggregate picture is not overly encouraging. For the S&P/TSX composite as a whole, the last month has seen a 0.64 per cent decline in 12-month earnings expectations and a 1.9-per-cent cut to forecasts in the past three months.

At the sector level, however, there is a lot more reason for optimism. The energy sector has been a clear winner in recent weeks with a 25.5-per-cent jump in profit expectations. Oddly, the earnings forecast remains 4.2 per cent below where it was three months ago, a sign of the extreme volatility in the sector.

The steady improvement in analyst forecasts for the utility stocks is perhaps the most interesting segment of the chart. The current outlook stands 5.0 per cent higher than three months ago and 1.7 per cent higher than one month ago. This consistency, combined with a significant average dividend yield of 4.4 per cent, should appeal to investors during the current period of market volatility.

The weakening outlook for industrials would seem to dampen Mr. Poloz's hopes for a burgeoning export recovery. Mr. Poloz expressed skepticism about a return of energy-related corporate investment, which implies it is the manufacturing sector that will have to drive export growth. There are, of course, many exporters not included in the industrials index and many not included in the S&P/TSX composite at all. Still, the 6-per-cent cut in profit estimates for industrial stocks over the past three months must be disquieting for the Bank of Canada.