May 15, 2020
Manufacturing Sales Fall 9.2 Per Cent
Manufacturing sales fell 9.2 per cent to $50.8 billion in March, the lowest level since June 2016 and the largest percentage decline since December 2008, during the previous recession, says Statistics Canada in its ‘Monthly Survey of Manufacturing.’ Manufacturing sales in March were substantially affected by COVID-19 as many plants were shut down or faced sharply lower demand during the last two weeks of the month. Given ongoing lower demand, together with continued challenges to global supply chains and ongoing physical distancing measures, the March decline in sales is expected to continue into April. Sales were down in 17 of 21 industries, led by steep declines in the transportation equipment and petroleum and coal product industries. In contrast, sales were up in food, paper, and the beverage and tobacco industries. In volumes terms, manufacturing sales fell 8.3 per cent, indicating that a lower volume of products was sold in March. Manufacturing sales were down in eight provinces, led by Ontario and Quebec. In contrast, Manitoba and Nova Scotia reported higher sales.
Additional Ontario Workplaces To Reopen
The Ontario government says retailers, seasonal businesses, and health and community service providers will be permitted to open or expand their services on May 19, provided that the general trend on health indicators continues to improve as part of the first stage of the government's reopening framework after implementing restrictions to prevent the spread of COVID-19. As well, additional seasonal services and activities will be permitted to open as early as May 16 in time for the Victoria Day long weekend, as key public health indicators continue to show progress. Among the businesses that will be permitted to reopen are retailers that have street-front entrances and construction sites. The government and health and safety associations have released safety guidance documents to assist employers in multiple sectors, including construction, retail, facilities maintenance, and manufacturing. It has also launched a website to provide businesses with information on personal protective equipment (PPE) suppliers.
Industry Supports Lifted Construction Moratorium
The Building Industry and Land Development Association (BILD), Ontario Home Builders Association (OHBA), RenoMark, and the Residential Construction Council of Ontario (RESCON) all support the Ontario government’s decision to allow the start of new renovation projects. “The professional renovation industry employs over 150,000 people in the Greater Toronto, ON, Area (GTA) with over $9 billion in wages,” says Jack Torossian, CEO of Golden Bee Homes Inc. and chair of the BILD renovator executive committee and BILD’s RenoMark program. “Then vast majority of renovators and custom home builders are small, family-owned businesses and the slowdown has hit the sector particularly hard.” The government’s decision will allow new home renovations and planned renovation projects to start again on May 19. “Allowing all residential construction to proceed in Ontario as of next week will have a tremendously positive impact on the economic recovery of the province as well as ensuring that housing is provided for thousands of Ontarians,” says Richard Lyall, president of RESCON.
Tremco Awarded Public Sector Contract
Tremco Roofing & Building Maintenance and its affiliate Weatherproofing Technologies Canada (WTC) have been awarded a public sector contract by Kinetic GPO for roofing supplies and services, waterproofing, and related products and services. The contract enables Kinetic GPO customers to expedite procuring a complete range of roofing solutions for projects ranging from new construction to repair to restoration, as well as analytical, maintenance, and information-based roofing services to keep buildings leak fee. Kinetic GPO is a cooperative purchasing organization established for the Canadian multiple broader public sector (BPS) and MASH (Municipalities, Academics, School Boards, and Health and Social Services). Tremco Roofing & Building Maintenance offers roofing systems for every environment, including some specifically developed for Canada. WTC is Tremco Roofing's service arm throughout Canada.
CanWel Has Strong First Quarter
CanWel Building Materials Group Ltd. had consolidated revenue of $326.7 million for the first quarter of 2020, a 15.9 per cent increase compared to consolidated revenue of $281.9 million in the first quarter of 2019. The increase was partly due to the inclusion of results from Lignum Forest Products, which the company acquired in April of last year. Gross margin dollars for the quarter increased 6.1 per cent to $43.5 million, compared to $41 million during the year-ago period. Gross margin percentage was 13.3 per cent of revenues versus 14.6 per cent last year. EBITDA increased 9.5 per cent to $16.5 million, compared to $15.1 million during the first quarter of 2019 and the company had net earnings of $850 million compared to a net loss of $356 million last year.
May 14, 2020
Pandemic Creates Dramatic Shift In Spending Habits
The COVID-19 pandemic has caused dramatic shifts in consumer spending habits, says a study by Payments Canada. The study compared spending behaviours pre-COVID-19 and at week five of the pandemic, uncovering higher use of contactless payments, electronic payments, eCommerce, online/mobile banking, and lower demand for cash. Overall, 75 per cent of Canadians say they were spending less than pre-COVID-19. Ninety-three per cent of Canadians say they stopped going out completely except for necessities. For those who were leaving their homes, 42 per cent say they avoided shopping at places that did not accept contactless payments, and 52 per cent tried not to exceed the contactless limit when buying something in-store. While we have seen a continued shift towards digital payments over a number of years in Canada, there's no doubt that the prevailing pandemic has accelerated this shift – and will likely act as a catalyst in transforming the Canadian payment landscape forever,” says Tracey Black, president and CEO of Payments Canada.
Kitchen Industry Uncertain About Economy
U.S. kitchen and bath professionals list economic uncertainty and fear of recession as their current primary challenges, demoting cost of materials, availability of skilled labour, and labour costs – the top three concerns last quarter – to seventh, eighth and 11th on the list, respectively, says the ‘Q1 2020 Kitchen & Bath Market Index’ (KBMI) by National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting. While the impact of COVID-19 on kitchen and bath professionals is undeniable, there are indicators of the recovery to come, says the report. For instance, though 69 per cent of all kitchen and bath projects have been impacted by the crisis, the majority of these (48 per cent) were postponements, as opposed to cancellations. The majority of respondents (68 per cent) expect the economy will largely reopen and that demand for their services and products will return to normal levels by September. However, 25 per cent are unsure whether conditions will improve until at least 2021. One of the most optimistic groups is retailers, 42 per cent of whom expect demand for their products to return to normal before the end of June, which aligns with the timeline for U.S. reopening of its economy.
Atlas Polar Now HIAB/LOGLIFT Distributor
Truck-mounted equipment company Atlas Polar Company Ltd. now carries the entire range of HIAB/LOGLIFT heavy-duty cranes and accessories. HIAB features the HiVision LOGLIFT, a timber crane that is controlled by virtual reality (VR). Operators can direct the crane from the passenger seat using the VR headset to gain a 270-degree field of vision. More importantly, VR eliminates the need for an additional crane cabin, weighing up to 400 kilograms. The lighter weight dramatically increases payload, profit, and substantially increases driver safety. “LOGLIFT cranes are a tremendous addition to our top-of-the-line product offerings,” says Bob Parr, president of Atlas Polar. “Like all of our brands, they are the epitome of smart controls, smart ideas, and next-generation technology. Our ability to distribute and service this line across Canada will help to keep some of our biggest industries at the technological forefront, and help to retain our place right up there with them.”
Davis Joins Bed Bath & Beyond
Cindy Davis will be executive vice-president, chief brand officer of Bed Bath & Beyond Inc. and president, Decorist, effective May 26. She is currently executive vice-president and chief digital marketing officer of L Brands.
ROCKWOOL Has Slight Sales Increase
ROCKWOOL International A/S had sales of €649 million for the first quarter of 2020, an increase of 0.5 per cent compared to sales of €641 million in the first quarter of 2019. EBIT for the quarter was €80 million, up 4.5 per cent compared to EBIT of €77 million in the year-ago period. EBIT margin was up 0.3 per cent over last year. Profit for the quarter was €61 million versus €57 last year.
May 13, 2020
All Major Cities Affected By Pandemic
The similarities and differences in how local economies will weather the pandemic are emerging, says the Conference Board of Canada. Its ‘Major Cities Insights Report’ says travel restrictions and social distancing measures are having an impact on all major cities in Canada. As well, job losses are affecting income and consumer confidence – providing a blow to spending on accommodations, retail, and restaurants in every location. Population growth and new home construction are also being affected across the board. However, while all cities will be affected by the pandemic, there are regional differences in the economic outlooks based on local sectors and pre-pandemic conditions, says the report. Edmonton and Calgary, AB, will be most impacted by energy sector production curtailments and the low price of oil. Construction, manufacturing, utilities, and technical services sectors will contract in both metropolitan areas this year as a result. Cities with higher public sector employment will fare slightly better than others. For example, Ottawa, ON’s large public service sector will help retain some jobs in the area as will most cities’ publicly funded healthcare industries. Social distancing mandated in response to the pandemic will slash output in Vancouver, BC’s accommodation and food services industry by 41.3 per cent and its arts and entertainment industries by nearly 18 per cent.
James Hardie To Shutter Plants
Building products manufacturer James Hardie Industries plc, in an effort to establish a strategic and scalable management system to drive sustainable and profitable growth, will close several manufacturing plants. The company will permanently close its South Carolina and New Zealand plants and temporarily cease operations of its Siglingen, Germany manufacturing plant. It will also close James Hardie Systems, the permanent formwork business based out of Cooroy, Australia, along with its associated manufacturing plant. As well, the company will delay commissioning its Alabama plant until its fiscal 2022 year. The company says these closures are consistent with its strategy to scale and modernize its global operations.
Canadian Tire Opens Niagara Falls Store
Canadian Tire Corporation (CTC) has opened a Canadian Tire retail store in Niagara Falls, ON, that is one of the retailer’s largest locations in the province. The 76,000-square-foot store has retail and warehouse space and opened in line with the Ontario government’s new COVID-19 protocols that allowed hardware stores to open fully to the public (with restrictions) on May 9. Construction of the Morrison Street location began in July 2019. The 218,000-square-foot property is owned by CT REIT, which owns a Canada-wide portfolio of assets leased primarily to CTC.
LP Has Strong Quarter
Louisiana-Pacific Corporation (LP) had net sales of $585 million for the first quarter of 2020, up one per cent over net sales of $582 million in the first quarter of 2019. Net sales for the siding segment decreased three per cent year-over-year; net sales for the oriented strand board (OSB) segment increased six per cent; and net sales for the engineered wood products (EWP) segment increased 10 per cent. Overall net income for the quarter was $33 million, up 22 per cent from $26 million in the year-ago period. Adjusted EBITDA was $83 million, up 43 per cent from $58 million last year and adjusted income was $38 million compared to $17 million.
Brampton Brick Has Revenue Increase
Brampton Brick Limited had revenue of $21,029 in the first quarter of 2020, up from revenue of $19,356 in the first quarter of 2019. Revenue for the masonry products business segment was $19,044 for the first quarter of 2020, compared to $17,677 in the year-ago period and revenue for the landscape products business segment was $1,924 compared to $1,644. The company had an overall net loss of $5,968 compared to a net loss of $4,498 last year. The operating loss for the quarter was $6,059 compared to a loss of $5,129.
May 12, 2020
Orgill Market To Go Virtual
Orgill, Inc. has cancelled its ‘Fall Dealer Market,’ scheduled for August 27 to 29 in Las Vegas, NV, in order to be prepared in case social distancing to prevent the spread of the coronavirus is still in place. Instead, the distributor will hold a fall online buying event that will allow its retail customers to still take advantage of buying opportunities and special deals. “While we hope conditions improve between now and August, we believe that refocusing our efforts with our vendors now to an online buying event for all of our customers is a better way for us to deliver on our mission to help our customers be successful,” says Boyden Moore, president and CEO of Orgill. Orgill typically holds two dealer markets every year, one in the fall and one in the spring. The events bring retailers, manufacturers, and service providers from across the industry together drawing thousands of attendees and exhibitors. Details about the online buying event will be released in the coming weeks.
Mastercard Offers Free Cybersecurity Tools To Small Businesses
Mastercard is offering free cybersecurity tools for small businesses to help them protect their environments during the COVID-19 crisis. RiskRecon, a Mastercard company, will provide cybersecurity assessments through December 31. This assessment can help businesses identify and address potential vulnerabilities in their systems. With free access to RiskRecon’s ‘My Cyber Risk’ service and portal, small businesses will receive continuous cyberhealth assessments along with actionable recommendations for how to strengthen their cybersecurity posture. Using passive techniques, the tool helps enterprise organizations better understand and act on their cybersecurity health by continuously discovering their digital footprint and non-invasively assessing their security risk posture across 40 security criteria spanning thousands of security checks. Mastercard says the program is offered at no cost and no obligation to businesses with less than 100 employees.
Steady Growth Forecast For Gardening Consumables
The global lawn and gardening consumables market size is anticipated to reach US$25.94 billion by 2027, expanding at a compound annual growth rate (CAGR) of 3.6 per cent over the forecast period, says a report by Grand View Research, Inc. By end user, the residential segment accounted for a share of more than 45 per cent in 2019 and is expected to expand at the highest CAGR over the forecast period. Based on product, fertilizers held a major share of more than 32 per cent in 2019 and is expected to maintain its lead in the next few years. The report says that the wave of Millennials buying homes, particularly older homes that require more improvements, are boosting the demand for landscaping products in the residential segment. This cohort is investing in a greater number of home improvement projects each year as compared to other age groups. Moreover, many consumers are considering the concept of landscaping as an essential part of interior decoration, which, in turn, is driving the demand for lawn and gardening consumables.
Residential Lumber Drives Stella-Jones Sales
Stella-Jones Inc. had sales of $503 million for the first quarter of 2020, an increase of 14 per cent over sales of $441 million for the first quarter of 2019. Pressure-treated wood sales rose by 13 per cent year-over-year driven by residential lumber sales which were up 25 per cent with increased demand in Canada and the U.S. Overall gross profit increased 19 per cent compared to the year-ago period. Operating income and EBITDA remained relatively unchanged year-over-year. Net income was $28 million versus net income of $29 million last year.
May 11, 2020
COVID-19 Causes Major Building Permit Decline
The total value of building permits issued by Canadian municipalities decreased 13.2 per cent to $7.4 billion in March, with declines reported in seven provinces and two territories, says Statistics Canada. The $1.1 billion national decrease was the largest since August 2014. This reflected notable drops in Ontario (-12.9 per cent), Quebec (-18.1 per cent), and British Columbia (-19.4 per cent), which coincided with efforts to slow the spread of COVID-19. The total value of residential permits also decreased, down 13.1 per cent to $4.6 billion in March. The value of permits issued for single-family dwellings fell 15.3 per cent to $2.2 billion. The value of permits issued for multi-family dwellings was down 11.1 per cent to $2.5 billion, with the largest declines seen in Ontario (-13 per cent to $1.1 billion) and British Columbia (-24.4 per cent to $389 million). Non-residential permits decreased for third consecutive month, with seven provinces reporting declines in the value of commercial permits issues, bringing the national total down 19.7 per cent to $1.6 billion.
Quebec Shutdown Decreases National Housing Starts
The trend in housing starts was 199,589 units in April, down from 204,899 units in March, says the Canada Mortgage and Housing Corporation (CMHC). Excluding Quebec, the trend was 155,995 units in April, up from 153,463 units in March. The survey was also reported without Quebec because it had introduced pandemic measures in the province in late March. However, residential construction in Quebec resumed on April 20. “Outside of Quebec, the national trend in housing starts increased in April, despite the impact of COVID-19 containment measures,” says Bob Dugan, chief economist at CMHC. “This reflects strong growth in multi-family starts in Ontario, Saskatchewan, and Manitoba. We expect these provinces to register declines in the near term.” The standalone monthly seasonally adjusted annual rate (SAAR) of housing starts for all areas in Canada, excluding Quebec, saw an increase of 10.8 per cent in April from March. The SAAR of urban starts increased by 12.4 per cent, multiple urban starts increased by 35.7 per cent, and single-detached urban starts decreased by 27.1 per cent. Rural starts were estimated at a seasonally adjusted annual rate of 7,285 units, excluding Quebec.
Businesses Face Reopening Challenges
Small business owners say that managing social distancing (64 per cent), keeping up with cleaning (55 per cent), making customers feel comfortable (53 per cent), knowing what the rules are (52 per cent), and access to personal protection equipment (48 per cent) are their top concerns as governments start to lift restrictions and reopen the economy, says a survey by the Canadian Federation of Independent Business (CFIB). “Making more sales is mission critical for businesses who are trying to survive, so turning the corner on shutdowns is welcome news,” says Laura Jones, executive vice-president at CFIB. |However, “it also brings practical challenges like figuring out how to make social distancing work, finding enough hand sanitizer, and talking to employees about coming back to work.” The survey also says three-quarters of businesses find it critical to make more sales soon to survive and be less reliant on government subsidies. Half of business owners say they will need to make at least 75 per cent of their typical sales to make it worthwhile for their business to stay open through the summer and more than three quarters would prefer that governments create general guidelines rather than prescriptive rules for how businesses should operate when they reopen. CFIB has a number of resources available for businesses to help in the transition. For more information, visit CFIB
Acadian Has Slow First Quarter
Acadian Timber Corp. had sales of $31.4 million for the first quarter of 2020, a decrease compared to sales of $30.9 million in the first quarter of 2019. Sales for New Brunswick Timberlands segment for the quarter were $21.7 million compared to $21.4 million during the prior-year period. Sales for the Maine Timberlands segment were $9.7 million compared to $9.5 million last year. Overall adjusted EBITDA was $8.3 million compared to $8.9 million and EBITDA margin was 27 per cent compared to 29 per cent. The company had a net loss of $3.7 million for the first quarter, compared to a net income of $6.4 million last year.