The doldrums are deepening in Canada's financial sector.
On almost every measure, the pace of activity in the securities business has fallen of a cliff.
A review of average daily equity trading volumes on the Toronto Stock Exchange so far in April shows that they are down 13 per cent from March's already somnolent pace. It's not clear what traders are doing all day, but they aren't trading Canadian stocks.
Average volumes in the first 12 trading days of April were 334.2 million, a steep slide from March's 382.8 million, and way below February's 400 million.
Pretty much every other line of business is slower too.
Year to date, new stock sales by Canadian companies are down 14 per cent, according to figures from Bloomberg. New issues of corporate bonds have declined by about 30 per cent.
Notwithstanding a few big deals such as the sale of Viterra Inc. and Wednesday's huge acquisition by Alimentation Couche-Tard Inc., the merger business is cooler too. The value of mergers and acquisitions involving Canadian companies has slipped 9 per cent.
All of that means less money coming into the till from commissions, new issue fees and merger advice.
The toll is evident in the share prices of Canada's two largest independent brokerages,
Canaccord Financial Inc. and GMP Capital .
Some in the industry are saying that this is beginning to feel a bit like the rough years of the early 2000s, when business went quiet in the period from the tech bust and to the mining boom.
The figures back that up. According to figures produced late last year by the Investment Industry Association of Canada, 2011 was already the weakest year for profits since 2004.
For a few years now, some people (me included) have been predicting that a consolidation of smaller brokerage firms was inevitable because of pressures on the cost side from higher regulatory demands. Now, with revenue surely plunging thanks to the drastic slowdown, that consolidation looks even more likely to finally begin.
The bigger firms, largely owned by the banks, are not going to be immune. Already, there is an increased focus on costs, and a steady stream of small staff cuts in areas that aren't producing. That too, is only likely to grow.