July 25, 2019
Wholesale Sales Down After Consecutive Increases
Wholesale sales were down 1.8 per cent in May to $63.8 billion, following five consecutive monthly increases, says Statistics Canada. Lower sales were observed in six subsectors, accounting for 86 per cent of total wholesale sales. The motor vehicle and motor vehicle parts and accessories subsector was the leading contributor to May's retreat, followed by the miscellaneous subsector. In volume terms, wholesale sales decreased 1.9 per cent from April to May. Wholesales sales in the building material and supplies sector were down six per cent to $9 billion. The sector's decline was led by the lumber, millwork, hardware, and other building supplies sector, which had a 13.1 per cent decrease. Wholesale sales declined in seven provinces in May, which together represented 98 per cent of total wholesale sales in Canada. Alberta posted the largest decrease in sales, followed by Ontario, British Columbia, and Saskatchewan. Wholesale inventories increased for a ninth consecutive month, up 1.1 per cent in May to $91.6 billion. The inventory-to-sales ratio increased from 1.39 in April to 1.43 in May, a level last seen in October 1995. This ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.
Alibaba Opens Platform To U.S. SMBs
Online B2B marketplace Alibaba.com is opening its platform to manufacturers, wholesalers, and distributors in the U.S. enabling them to access the $23.9 trillion global B2B eCommerce market. Previously, U.S. small- and medium-sized businesses (SMBs) could only source goods on the site because it was originally launched to connect suppliers in China with buyers in overseas markets. The company has launched a series of features to support the onboarding and marketing efforts of new U.S. suppliers (also called sellers) on the site. They will get an interface for building and managing a digital store on the platform, CRM and communications tools, digital marketing tools, and payment capabilities. As more sellers arrive on the platform, buyers will have greater choice across a range of categories for their sourcing needs, including both ready-to-ship and customized goods. To further support the entry of U.S. SMBs on the platform, Alibaba.com is building an ecosystem of industry partners to provide goods and services needed in global trade. The ecosystem consists of 'anchor sellers,' such as Office Depot which has opened a store on the site. These anchor sellers, along with their name recognition and extensive product inventories, will bring increased in traffic to the site which, in turn, should serve to drive traffic to smaller sellers as well.
BB&B Cuts HQ Staff
In connection with its ongoing transformation and near-term priority to reset the company's cost structure, Bed Bath & Beyond Inc. has initiated a reduction in corporate staff at its headquarters in Union, NJ, and at other select locations where corporate associates are based. The company recently completed a review of its corporate office cost structure which has resulted in a reduction of approximately seven per cent of its corporate staff, including vice-presidents, directors, managers, and professional staff. These organizational changes are estimated to generate future annual pre-tax net savings of approximately $30.7 million.
Mirtchev Directs Public Affairs
Peter Mirtchev is director of public affairs with the Canadian Paint and Coatings Association (CPCA). Previously, he was technical program officer with the Chemical Institute of Canada.
PPG Sales Decline
PPG had sales of approximately $4 billion for the second quarter of 2019, a decrease of nearly three per cent versus the prior year. Sales volumes were down about four per cent versus the prior year in aggregate, including about 1.5 per cent stemming from changes in the U.S. architectural coatings customer assortment. Net income from continuing operations was $270 million compared to $371 million in the year-ago period, while adjusted net income was $441 million compared to $468 million. Sales for the performance coatings segment were down nearly three per cent year-over-year and sales for the industrial coatings segment were down about two per cent.
July 24, 2019
May Manufacturing Sales Up
Manufacturing sales rose 1.6 per cent to $58.9 billion in May, following a 0.4 per cent decline in April. The increase was mainly due to higher sales in the transportation equipment industry, says Statistics Canada. Sales were up in 12 of 21 industries, representing 66.2 per cent of total Canadian manufacturing. Constant dollar sales rose 1.7 per cent, indicating that a higher volume of products was sold in May. Sales were up in six provinces, although the increase was concentrated in Ontario. Inventory levels rose 0.8 per cent to $88.8 billion for the month; with inventories up in 13 of 21 industries. The inventory-to-sales ratio decreased from 1.52 in April to 1.51 in May. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to continue at their current rate.
U.S. Online Retail Sales To Decrease
U.S. online retail sales growth year-over-year slowed for four consecutive quarters for the first time since 2012 and may have reached an inflection point that could result in slowing growth moving forward, says FTI Consulting, Inc. in its '2019 U.S. Online Retail Forecast.' The report says U.S. online retail sales should reach $575 billion in 2019, a 12.3 per cent increase over $513 billion in 2018. That compares to a 14.2 per cent increase in 2018, when the market grew from $450 billion and topped $500 billion for the first time, and a 15.6 per cent increase in 2017. Online sales growth has slowed to 13.3 per cent in the most recent four quarters from 16.1 per cent a year earlier and it has weakened further to the low-12 per cent range in the two most recent quarters. However, the online channel still captured nearly 43 per cent of total retail sales growth in 2018, with continued market share growth of approximately one percentage point expected annually through 2022. The forecast projects that online retail sales will reach $645 billion in 2020 (a 12.1 per cent increase) and will top $1 trillion by late 2025. U.S. online retail sales will achieve a market share of total retail sales (excluding auto and gas) of 21 per cent by 2025, compared to 15 per cent in 2019, and will approach an expected ceiling of 25 per cent near the end of the next decade or 30 per cent if the grocery category is excluded.
Home Depot Makes Progress On Responsibility Goals
The Home Depot has reduced U.S. store energy used by 26 per cent compared to 2010, it says in its '2019 Responsibility Report.' The report details the retailer's progress on its commitment to three pillars - operate sustainably, focus on people, and strengthen communities. It also includes a commitment to reduce carbon emissions 50 per cent by 2035. Along with the reduction in store energy, supply chain efficiencies implemented by the company reduced carbon dioxide intensity by six per cent per dollar sold. Under its responsible sourcing policy, the retailer conducted 1,362 factory audits. For its focus on people, Home Depot plans to invest more than one million hours per year over the next five years in training and development. The Home Depot Foundation has committed to train 20,000 skilled trades men and women by 2028. For the communities’ focus, the foundation committed additional funds to veteran causes and financial support to help communities affected by natural disasters. New to the report this year is the inclusion of '10 United Nations Sustainable Development Goals.' The report also includes additional charts on materiality touchpoints, progress on stated goals, and an ESG transparency chart that highlights the retailer's key environmental, social, and governance (ESG) metrics from 2016 through 2018.
CAMO Clips Approved For Deckorators’ Grooved Deck Boards
Deckorators has approved CAMO’s EdgeClip and EdgeXClip fasteners for use with its grooved deck boards. CAMO Edge Screws are also on the Deckorators’ compatible fastener list, having previously been approved for use with their square profile deck boards. These fastener systems are manufactured by National Nail and are created to achieve a fastener-free surface. The EdgeClip is designed for 90-degree patterns and the EdgeXClip is designed for any angled decking pattern. A 'Never-Miss Guide' is included in every pail of clips to aid in installation. The CAMO DRIVE stand-up tool with the clip guide can also be used for installation.
Residential Products Drive Watsco Sales
Watsco, Inc., a distribution network for heating, air conditioning, and refrigeration (HVAC/R) products, had sales of $1.372 billion for the second quarter of 2019, an increase of three per cent over sales in the second quarter of 2018. Sales growth for residential products increased four per cent. Gross profit increased two per cent year-over-year to $328 million; gross margin decreased 20 basis points. Operating profit decreased two per cent to $134 million over the same period a year ago. Net income for the quarter was $107.9 million compared to $108.3 million last year.
July 23, 2019
Residential Sector Drives Building Construction Gains
Total investment in building construction increased 2.2 per cent in May to $15.2 billion. Gains in the residential sector (2.8 per cent to $10.4 billion) led the increase, while the non-residential sector edged up 0.9 per cent to $4.8 billion, says Statistics Canada. On a constant dollar basis, investment in building construction rose 1.8 per cent to $12.7 billion. Investment in multi-unit dwellings rose 7.6 per cent in May, while investment in single-unit dwellings declined 2.2 per cent. Growth in multi-unit dwelling investment was led by higher investment in British Columbia, which accounted for approximately three-quarters of the national increase. Provincially, non-residential investment was modestly higher in British Columbia ($21 million) and Ontario ($20 million). These gains were partially offset by weakness in Alberta (down $10 million).
Government Offers Energy Efficiency Funding To SMEs
Small-and medium-sized businesses (SMEs) in Ontario, New Brunswick, Manitoba, and Saskatchewan can now apply for funding for energy-saving projects through the SME Project stream of the Climate Action Incentive Fund offered by the ministry of environment and climate change. SMEs in these provinces will be eligible to receive funding of up to 25 per cent of the cost of projects that will make their businesses more productive and competitive as they reduce energy use, save money, and cut greenhouse gas pollution. Over the next five years, SMEs will have access to $1.45 billion to support a wide range of projects. Eligible projects include building retrofits, improved industrial processes, fuel switching, and the production of renewable energy for the use of applicants. The application period started July 17 and will be open until funding is exhausted or for a maximum of 90 days. Eligible businesses can save up to a maximum of $250,000; the minimum amount of federal funding per application is $20,000.
Kinaxis Partners With Infosys To Modernize Supply Chains
Kinaxis Inc., a supply chain software provider, has formed an alliance with Infosys, a technology consulting firm, to help customers modernize their end-to-end supply chains and drive purposeful adoption of machine learning capabilities. The alliance brings together Kinaxis' supply chain planning platform with machine learning capabilities, advanced analytics, and concurrent planning technique with Infosys' experience in supply chain and digital transformation consulting. Together, the firms will help customers remove functional silos, drive confident decisions, improve profitability and productivity, synchronize planning processes, and increase agility, while reducing risk.
Snap-on Has Decreased Sales
Snap-on Incorporated had net sales of $951.3 million for the second quarter of 2019, a decrease of 0.3 per cent over net sales in the second quarter of 2018. Operating earnings for the quarter were $189.9 million or 20 per cent of sales compared to $193.1 million or 20.2 per cent of sales last year. Net earnings were $180.4 million compared to $178.7 million in the year-ago period. Sales for the commercial and industrial group segment decreased 0.8 per cent; sales for the Snap-on Tools Group segment decreased 1.5 per cent; and sales for the repair systems and information group segment increased 1.7 per cent.
July 22, 2019
Retail Sales Decline For First Time In Months
Retail sales declined for the first time in four months, edging down 0.1 per cent to $51.5 billion in May, says Statistics Canada. Excluding sales at motor vehicle and parts dealers and gasoline stations, retail sales decreased one per cent. Sales were down in four of 11 subsectors, representing 39 per cent of retail trade. Lower sales at food and beverage stores were the main contributors to the decline. Sales at building material and garden equipment and supplies dealers were $3.1 billion in May, down 3.9 per cent over May of 2018. Appliance store sales were down 5.4 per cent and furniture and home furnishings sales were up 5.8 per cent. On the digital side, on an unadjusted basis, retail eCommerce sales were $1.8 billion in May, accounting for three per cent of total retail trade, compared with 1.9 per cent of total retail trade in May 2016 ‒ the year when official monthly statistics for retail eCommerce were first published. On a year-over-year basis, retail eCommerce increased 21.8 per cent, while total unadjusted retail sales were up 1.6 per cent.
U.S. Remodeling Index Maintains Levels
The National Association of Home Builders’ (NAHB) 'Remodeling Market Index' (RMI) posted a reading of 55 in the second quarter of 2019, rising one point from the previous quarter. The RMI has been consistently above 50 ‒ indicating that more U.S. remodelers report market activity is higher compared to the prior quarter than report it is lower ‒ since the second quarter of 2013. The overall RMI averages current remodeling activity and future indicators. “The remodeling market has decelerated somewhat due to ongoing supply-side challenges, as well as year-over-year declines in existing home sales,” says Robert Dietz, chief economist with NAHB. “However, remodelers’ confidence continues to be positive. Market conditions would be better if not for labour shortages and rising construction costs making it difficult to complete some projects at prices homeowners can afford.”
Fastenal To Open 1000th Onsite Location In Saskatchewan
In June, Fastenal announced a milestone after its active vending device count surpassed 100,000. This milestone has been followed by another, this one pertaining to the company’s Onsite program. The company now has 1,000 active Onsite locations, each providing a customized local supply chain within (or near) a customer’s facility. The milestone Onsite is being set up within the Rocanville, SK, facility of Nutrien, a provider of crop inputs, services, and solutions. It’s one of three dedicated Fastenal service/stocking locations that have been customized to meet the needs of specific Nutrien facilities. The service models range from a location within a Nutrien plant (Rocanville) to an offsite location situated across the street from a Nutrien facility (Aurora, NC), to a larger location servicing five surrounding Nutrien sites (Saskatoon, SK). The Fastenal Onsite program is designed to shorten the supply chain from a distribution standpoint. It brings Fastenal inventory and representatives onsite to support a business' operations on a full-time basis.
DEWALT Launches Cordless Heat Gun
DEWALT has launched the 20V MAX* Cordless Heat Gun, which is now part of more than 200 products in the 20V MAX* System. This heat gun is optimized for use by electricians, plumbers, painters, and mechanics for applications such as automotive detailing, removing adhesives and decals, reshaping bumpers, and removing paint. It features up to a 990°F max heat output with two temperature settings, high and low. The heat gun also has a specialty lock-on and off feature allowing for hands-free operation as needed. In addition, the nozzle size is universal to the standard heat gun, allowing it to be used with attachments from many corded and competitive units.
Pier 1 Appoints President
Douglas Diemoz has been appointed to the newly created role of president with Pier 1 Imports, Inc. He joins the company with more than two decades of retail industry experience, most recently as chief executive officer of Crate & Barrel. Robert Riesbeck is executive vice-president and chief financial officer. He comes from FULLBEAUTY Brands, where he served as chief financial officer.
Honeywell Has Sales Decrease In All Segments
Honeywell International Inc. had sales of $9.2 billion for the second quarter of 2019, a decrease of 15 per cent over sales of $10.9 billion in the second quarter of 2018. Organic growth increased five per cent. Sales for the building technologies segment decreased 14 per cent for the quarter to $3.5 billion; organic growth also increased five per cent. Sales for the safety and productivity solutions segment decreased four per cent to $1.6 billion; organic growth decreased by four per cent. The performance material and technologies segment sales increased one per cent to $2.7 billion, with organic growth of four per cent. The aerospace segment sales were down 14 per cent with organic growth of 11 per cent.
July 19, 2019
Steep Slowdown Projected In U.S. Home Improvements
Growth in U.S. residential remodeling spend is expected to slow considerably by the middle of next year, says the Leading Indicator of Remodeling Activity (LIRA) by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that annual gains in homeowner expenditures for improvements and repairs will shrink from 6.3 per cent in the current quarter to just 0.4 per cent by the second quarter of 2020. The decrease in spend will be caused by declining home sales and homebuilding activity.
Metro Vancouver Housing Pre-Sales Drop 47 Per Cent
The severely depressed nature of British Columbia's Lower Mainland housing market throughout the first half of 2019 is prompting more developers to hold back on their approved projects, says MLA Canada in its mid-year market update report. Approximately 4,100 new homes within multi-family developments were introduced into the pre-sale market during the first six months, but this accounts for a staggering 47 per cent decrease in the total amount of pre-sale inventory released during the same period in 2018. Despite the falling supply, BC is still projected to see 55,000 new residents from migration this year, with the vast majority moving to Metro Vancouver. For the remainder of the year, analysts expect just 27 project launches in Metro Vancouver and the Fraser Valley with over 3,500 new condominiums combined. Richmond will be the most active submarket for the second half of 2019, with about five project launches creating over 700 units. As well, with rising inventory levels and projects taking far longer to sell, many projects ‒ even those that have received all necessary permits to proceed with construction ‒ will likely hold their sales launch until 2020 or until more favourable conditions.
Canada Invests In Automation Of Cedar Shingle Factory
Canada's ministry of natural resources is investing $2.4 million to help build a fully-automated cedar shingle facility. Waska, located in Clair, NB, will use the funding to build an automated plant that will employ lasers, sensors, and advanced algorithms, which are a set of computer-generated instructions typically used to perform problem-solving operations in production. The improved and highly digitalized automation process will significantly increase production, result in higher precision rates, lower production costs, reduce energy usage, and enhance efficiency. The investment is provided through Natural Resources Canada's ‘Investments in Forest Industry Transformation (IFIT)’ program. Through 'Budget 2019,' the government proposes an additional $82.9 million over three years, starting in 2020-21, for the IFIT program. Waska is a division of Clair Industrial Development Corporation Ltd., has been in operation for 50 years and focuses on manufacturing a variety of shingles and fences.
Economy Provides Opportunities For Refinishers
The current slowed state of housing and slack economy provide opportunities for professional kitchen and bath refinishers, says NAPCO, Ltd., a producer of refinishing products and bathtub and kitchen refinishing training company. As well, "bathtub and kitchen refinishers are not being impacted to the same extent as remodelers or builders have been by tariffs on supplies such as steel, timber, and aluminum," says Dani Nichols, president of NAPCO. "Refinishing a kitchen or bathroom reuses existing materials by repairing and applying specialty coatings to the surfaces for lasting improvement. By educating homeowners about this option, home improvements are within reach. The price tag of a bathroom remodel can drop from $8,000 to $12,000 to $1,500." NAPCO says bathtub refinishers can expand their skill set to include kitchen refinishing and offer affordable home improvements.
Canfor Further Reduces Capacity
Canfor Corporation will further reduce capacity at two of its British Columbia sawmills with an indefinite curtailment at its Mackenzie sawmill and the permanent elimination of one shift at its Isle Pierre sawmill. The indefinite curtailment at Mackenzie, which is effective immediately, is due to the high cost of fibre, continued poor lumber markets, and challenging operating conditions that have combined to make the mill uneconomic under these conditions. The Isle Pierre sawmill capacity reduction is due to insufficient timber supply as a result of the mountain pine beetle epidemic and associated decline in the annual allowable cut. The reduction will enable the mill to better align its production capacity with the sustainable fibre supply in the region.
Barton Named Marketing Director
Mitch Barton is marketing director of global press connection with RIDGID. He brings several decades of marketing and product development experience to the role and served most recently as director, global project management for performance health, at Akron.
Curtailments Affect West Fraser Earnings
West Fraser Timber Co. Ltd. had sales of $1,317 million in the second quarter of 2019, a decrease over sales of $2,558 million in the second quarter of 2018. Adjusted EBITDA was $56 million for the quarter compared to $166 million in the year-ago period. The company had a loss of $58 million compared to a loss of $63 million last year. Permanent and temporary curtailments resulted in 250 MMfbm (million board feet) of reduced lumber production during the first half of 2019.