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News

December 21, 2018

Slight Increase In Wholesale Sales

Wholesale sales rose one per cent to $63.8 billion in October, more than offsetting the 0.7 per cent decline in September, says Statistics Canada. Sales were up in four of seven subsectors, representing about 68 per cent of total wholesale sales. The machinery, equipment and supplies, and the personal and household goods subsectors contributed the most to the gains in October, while the motor vehicle and parts subsector posted the largest decline. In volume terms, wholesale sales increased 0.9 per cent. The machinery, equipment, and supplies subsector rose 2.8 per cent to $13.4 billion in October, a third increase in four months. Sales were up in three of four industries, led by the farm, lawn and garden machinery, and equipment industry at an increase of 9.4 per cent, its first increase in four months. Sales in the personal and household goods subsector were up 3.1 per cent to $9.3 billion while sales in the building material and supplies subsector decreased 1.2 per cent to $9.3 billion, the second decline in three months. Two of three industries were down, led by the lumber, millwork, hardware, and other building supplies industry (-3.5 per cent). Sales increased in four provinces, which together represented about 71 per cent of total wholesale sales, led by Ontario and Quebec. Lower sales were reported in all four western provinces, led by Alberta. Inventories increased for the seventh time in eight months with a 1.4 per cent increase in the building material and supplies subsector, the seventh gain in 2018.


King Marketing Holds First National Sales Meeting

King Marketing moved from holding regional sales meetings to having one national sales meeting for the first time this year and it took place in Niagara Falls, ON, in December. The agency invited 10 of its key manufacturers to present to the 55 King sales representatives and managers in attendance. Key manufacturer principles from Bosch, Lepage, Blanco, Schlage, Mirolin, Norton, Senco, Renin, Lutron, and Nuvo Iron provided training sessions that included hands-on workshops. After team building events in the evenings, the week concluded with King’s annual awards which included the presentation of King Marketing’s ‘Peddler of the Year’ award to Jim Calce, a key account manager based in Ontario.


New home market back to typical levels in November

In November, the Greater Toronto, ON, Area (GTA) new home market saw more typical activity levels ‒ both in new home sales and new project openings ‒ after a relatively strong October, says the Building Industry and Land Development Association (BILD). There were 2,823 new homes sold in November. Condominium apartments in low-, medium-, and high-rise buildings, stacked townhouses, and loft units accounted for 2,454 new home sales, down 24 per cent from the same period a year ago, but only six per cent less than the 10-year average. Single-family home sales, with 369 detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses) sold, were up eight per cent from last November but down 71 per cent from the 10-year average. Remaining inventory increased month over month, to 16,797 units, comprised of 11,254 condo apartment units and 5,543 single family units. The benchmark price for both condo apartments and single-family homes increased slightly compared to the previous month.


Wholesaler Revenue Up 10 Per Cent

The operating revenue of Canadian wholesalers increased 10.4 per cent in 2017, topping the $1 trillion mark, which was last reached in 2014. The increase was led by the petroleum products subsector, but all the other subsectors also reported higher revenue. Excluding petroleum products, operating revenue increased 5.5 per cent compared with 2016. Overall, the operating profits of wholesalers as a percentage of total operating revenue edged down from 4.8 per cent in 2016 to 4.6 per cent in 2017, as increases in operating revenue were offset by higher operating expenses and the cost of goods sold. The cost of goods sold, which accounted for 83.5 per cent of total operating revenue, increased 11.5 per cent to $881.1 billion in 2017. This was driven by growth in the cost of goods sold in the petroleum subsector. Gross margins for wholesalers ‒ the difference between total operating revenue and the cost of goods sold expressed as a percentage of total operating revenue ‒ decreased from 17.3 per cent in 2016 to 16.5 per cent in 2017. Excluding petroleum products, wholesale gross margins were 21.1 per cent in 2017. Expressed as a percentage of total operating revenue, gross margins fell from 17.3 per cent in 2016 to 16.5 per cent in 2017. Lower gross margins were reported by five of the nine subsectors.


Pella Acquires Avanti

Pella Corporation has acquired Avanti, a vinyl window and patio door manufacturer based in Arizona. This acquisition will expand Pella’s footprint in the southwestern region of the U.S. and leverage Avanti’s expertise and capabilities in providing express customer service and in turnkey window and door installation. The acquisition provides resources to help Avanti further grow its business as it will remain a stand-alone company.


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