CHHMA - EYE ON OUR INDUSTRY
Volume 15, Issue 18, May 20, 2015

Inside This Issue:

• Last Call for CHHMA Ontario & Quebec Golf Tournaments
• No Summer Reports Due for ÉEQ’s 2015 Schedule of Contributions
• Sears Canada Narrows First Quarter Loss, Revenue Falls 9.7%
• Target First Quarter Profit Tops Estimates on Healthy Sales Growth
• Lowe's Profit & Sales Miss Projections in Latest Quarter
• Home Depot Beats Earnings, Revenue Expectations on Recovering U.S. Housing Market
• Canada a Bright Spot for Wal-Mart as Solid First-Quarter Sales Outpace U.S.
• Wal-Mart Misses Estimates, Impacted by Currency Fluctuations and Consumer Saving
• Canadian Tire Sees Strong First Quarter Results but Expects Growth to Slow
• How Canada’s Taste for Apps Differs from the U.S.
• Consumer Confidence Dips in Canada but Continues to Climb in U.S.
• Canadian Home Resales Increase Again in April
• New Home Prices in Canada Unchanged in March; Calgary Prices Drop
• U.S. Housing Starts Surge in April to Highest Since November, 2007

Association News

Last Call for CHHMA Ontario & Quebec Golf Tournaments

The CHHMA Annual Ontario and Quebec Golf Tournaments are set for next Tuesday and Thursday, respectively, and there are still a few openings if you would like to attend.

The 46th Annual Ontario Golf Tournament in support of the CHHMA Scholarship Program is being held at the Angus Glen Golf Club in Markham, Ontario, (7:45 a.m. shotgun start) on May 26th. It is open to CHHMA members and their invited customers and includes breakfast, golf, an executive lunch, awards and prizes.

Click here for all the details and to register online.

The 2015 CHHMA Classique de golf is being held on May 28 at the Club de golf LeFontainebleau in Blainville, Quebec. The tournament is open to CHHMA members and non-members. Registration and brunch will start at 9:00 a.m., with an 11:00 a.m. shotgun start.After golf, there will be dinner with wine followed by prize presentations.

Click here for full details and to register: French or English

These events are always a lot of fun and a great way to bond with fellow employees, industry colleagues and customers with some wonderful prizes up for grab and items to bid on. We hope you can make it out!

Stewardship News

No Summer Reports Due for ÉEQ’s 2015 Schedule of Contributions

This year’s Éco Entreprises Québec (ÉEQ) advised last Thursday that stewards will not be asked to submit their Company Reports this summer for the 2015 Schedule of Contributions.

The Quebec government is currently analyzing the findings of a sorting centre characterization study that will determine the percentage to be deducted from the compensation due to municipalities having to take into account non-designated materials.

A transition measure consisting of a 7.5% deduction from eligible net costs was used for Schedule calculations for the 2013 and 2014 Schedules of Contributions. That percentage will be reviewed according to the data collected in the latest study.

Nevertheless, ÉEQ recommends that stewards still gather their 2014 data now to be ready to produce their Company Report when the Schedule eventually takes effect.

We will keep you updated on developments as they occur.

ÉEQ is a private non-profit organization representing companies that produce container, packaging and printed matter waste in Quebec.The organization was accredited by RECYC-QUÉBEC in 2005 in accordance with the Environment Quality Act.

ÉEQ develops the Schedule of Contributions (annual fees by waste categories) and collects company contributions, which are then redistributed to finance municipal curb-side recycling services in Quebec. ÉEQ also encourages innovation and sharing of best practices in order to optimize the recyclable materials value chain. To do so, ÉEQ cooperates, on the one hand, with companies to reduce quantities of materials at the source and encourage the use of recyclable materials, as well as with municipalities to increase recycling and the economic value of recovered materials.

For more information, go to: http://www.ecoentreprises.qc.ca/home

Source: Éco Entreprises Québec

Industry News

Sears Canada Narrows First Quarter Loss, Revenue Falls 9.7%

Sears Canada Inc. reported Wednesday a $59.1-million net loss for the first quarter ended May 2 amid falling revenue, which was down 9.7% from last year.

The loss amounted to 58 cents per share – which was less than during the same time last year when the struggling department store operator reported a net loss of $75.2-million or 74 cents per share.

Overall revenue for the quarter fell to $697.2-million, down from $771.7-million, mostly because of store closures.

Same-store sales were down 4.3%.

This year’s quarter was helped by a $5.1-million gain from a settlement of retirement benefits while last year’s first quarter included a $7.6-million non-recurring expense related to its corporate transformation efforts.

After various adjustments in both years, Sears Canada’s first quarter loss was $50.5-million compared with a loss of $58.1-million last year.

"We began to see signs that our business was performing better this quarter," commented Ron Boire, President and Chief Executive Officer, Sears Canada Inc."Our net loss decreased by over $16 million and our EBITDA loss decreased by almost $8 million. Same store sales, although still negative, decreased by less than in any quarter last year.Still, we know much work lies ahead of us.Our aim is to have a balanced approach to achieve both top-line revenue improvement and profitability.In striving to accomplish this, we are proceeding with our plans to transform the Company, and this primarily involves moving from simply a multi-channel retailer to an effective omni-channel retailer. The transformation involves an integration of products, pricing, marketing, infrastructure and distribution capabilities to allow customers to shop how they want, when they want and where they want.At the same time, we are continuing to improve our product offering, having recently announced new Apparel-related relationships with Cherokee, Liz Lange and Wayne Gretzky as well as our commitment to providing Canadians with our Canada's Best products in multiple lines across the store.”

The company currently has 167 corporate stores, 197 Hometown stores, more than 1,300 catalogue and online merchandise pickup locations, 85 Sears Travel offices and a nationwide repair and service network.

Source: Sears Canada Inc., The Canadian Press

Target First Quarter Profit Tops Estimates on Healthy Sales Growth

Target Corp. reported on Wednesday a larger-than-expected increase in first-quarter profit as revenues got a boost from online sales and a program to narrow its product focus.

Target also said it repurchased $562 million worth of its shares in the quarter, resuming buybacks for the first time in nearly two years.

Adjusted earnings, excluding restructuring costs and other items, came to $1.10 per share in the three months ended May 2, against a profit of 92 cents in the same period a year earlier.

Analysts, on average, expected per-share profit of $1.03, according to Thomson Reuters.

Target said same-store sales rose 2.3%, matching the market consensus, according to Consensus Metrix. One-third of the growth came from online-generated sales, which jumped 38%.

For the full year, the company expects adjusted earnings of $4.50 to $4.65 per share, against its previous outlook of $4.45 to $4.65. The range is still in line with the average analyst projection of $4.56.

Under CEO Brian Cornell, Target has focused on promoting a narrower set of products, or "signature categories," that include apparel and items for children, babies and health and wellness.

"We’re pleased with our first quarter traffic and sales, particularly in our signature categories, which drove better-than-expected profitability through improved gross margin and continued expense management,” Cornell said in a statement.

In March, Cornell unveiled a restructuring plan that eliminated several thousand corporate jobs, revamped its grocery operations and included a $1 billion investment in technology in such areas as its supply chain.

Including costs related to the restructuring, Target said earnings from continuing operations came to $1.01 in the quarter, up from 89 cents a year earlier.

In January, Target announced it was walking away from Canada less than two years after opening stores there. Dismantling operations in the Canadian division, which employed 17,600 people, led to a $5.1-billion writedown in the fourth quarter. The Canada unit had amassed more than $2-billion in operating losses since 2011.

As of April 12, 2015, Target Canada completed its inventory liquidation efforts and closed the last of its 133 Canadian retail stores. A court-approved real estate sales process is underway and expected to be complete by the end of June 2015.

Consistent with expectations, after-tax losses from discontinued operations were $16 million in first quarter 2015, compared with $153 million last year.

Target also suffered a data breach during the holiday season of 2013, and the fallout has extended until this year. Last month, the company agreed to pay banks $19-million for costs they incurred in the attack. Since the fourth quarter of 2013, Target has reported $166-million in expenses related to the breach.

Source: Target Corp., Reuters, Bloomberg News

Lowe’s Profit & Sales Miss Projections in Latest Quarter

Lowe's Companies, reported lower-than-expected quarterly profit and sales as growth in its kitchen, flooring and lumber and building material businesses was not as strong as the company expected.

Shares of Lowe's, which also reported same-store sales growth below analysts' estimates, fell about 7% in premarket trading on Wednesday.

Lowe's total same-store sales rose 5.2% in the first quarter. Analysts on average had expected a 6.1%, according to Consensus Metrix.

In contrast, bigger rival Home Depot Inc.'s quarterly same-store sales handily beat analysts' estimates on Tuesday as the company benefited from higher spending on home improvement after a harsh winter.

Lowe's maintained its full-year comparable sales growth forecast of 4.0-4.5%, but this could be tough to achieve, analysts said.

Lowe's first-quarter performance leaves little room for error and the road ahead will get tougher for the company as broader retail sales trends appear somewhat erratic to weak, Janney Capital Markets analyst David Strasser wrote in a note.

The company expects to open 15 to 20 home improvement and hardware stores this fiscal year.

Lowe's net income rose 7.8% to $673 million, or 70 cents per share, in the quarter ended May 1 from $624 million, or 61 cents per share, a year earlier.

Net sales rose 5.4% to $14.13 billion.

Analysts on average had expected a profit of 74 cents per share and revenue of $14.28 billion, according to Thomson Reuters.
Lowe's shares were trading at $67 before the bell.

Up to Tuesday's close, the stock had risen nearly 58% in the past 12 months, while Home Depot's shares had risen about 47%.

Source: Lowe’s Companies, Inc., Reuters

Home Depot Beats Earnings, Revenue Expectations on Recovering U.S. Housing Market

A busy spring pushed Home Depot’s first-quarter profit and revenue above Wall Street expectations and the world’s biggest home improvement retailer raised its projections for both in 2015.

Same-store sales in the U.S. were also better than most had expected, rising 7.1%. Overall, company same-store sales were up 6.1% for the quarter.

Many retailers have been struggling, but that is not the case at companies that cater to home owners. Both Lowe’s and Home Depot have seen comparable-store sales in the U.S. rise over the past three consecutive quarters.

“We had a stronger than expected start to the year as we experienced a more normal spring across much of the country and continued recovery of the U.S. housing market,” said Chairman and CEO Craig Menear.

Home Depot earned $1.58 billion, or $1.21 per share, for the three months ended May 3. That compares with $1.38 billion, or $1 per share, a year earlier.

Earnings, adjusted for pretax gains, came to $1.16 per share.

That’s a penny better than analysts had expected, according to a survey by Zacks Investment Research.

Revenue climbed 6.1% to $20.89 billion from $19.69 billion, also edging out expectations.

The Home Depot Inc. now sees 2015 earnings rising about 11% to 12%, to $5.24 to $5.27 per share. That tops Wall Street per-share earnings projections of $5.23, according to FactSet.

Revenue is expected to climb approximately 4.2% to 4.8%. Its prior guidance was for earnings between $5.11 and $5.17 per share, with revenue increasing about 3.5% to 4.7%.

Home Depot said that, other than $7 million in data breach-related costs in its first-quarter earnings, it currently isn’t able to estimate the range of costs related to a data breach discovered in September. The chain said that the costs may have a material adverse impact on its fiscal 2015 results and those for future periods.

Home Depot shares have risen nearly 9% since the beginning of the year and rose more than 2% to $116.74 before the opening bell Tuesday, closing in on another all-time high.

Source: The Associated Press, The Home Depot

Canada a Bright Spot for Wal-Mart as Solid First-Quarter Sales Outpace U.S.

Wal-Mart Canada Corp. got a solid first-quarter sales lift even while the world’s largest retailer faced challenges in its U.S. home market.

Wal-Mart enjoyed a 1.8% sales gain at existing Canadian stores, outpacing the 1.1% increase at its core U.S. outlets. Its first-quarter overall sales here rose 3.7% (3.5% in the U.S.) as the discounter raced to add more groceries to its stores here. Customer spending picked up 1.7% in the quarter in Canada but just 0.1% south of the border.

And Wal-Mart Canada’s expansion streak will continue: It has a deal to buy 12 store leases plus one owned store and a distribution centre from Target Corp. for $350-million after that retailer wound down its operations in this country. That’s in addition to adding 29 supercentres with full food sections in 2015.

“I’m pleased with performance over all and expect the positive trend to continue as the competitive landscape evolves,” David Cheesewright, president of Wal-Mart’s international division, said on Tuesday of the Canadian operations that he once led.

Mr. Cheesewright said Wal-Mart Canada’s e-commerce continues to perform well with first-quarter online sales up more than 40%. Last month, the discounter tweaked its free-shipping policy by starting to charge $4.97 for standard home deliveries for orders of less than $50.

He said operating profit in Canada grew faster than sales in the quarter. “We remain focused on our low-cost operating model and continue to seek out opportunities to drive efficiencies to reduce expenses.”

He said first-quarter sales were helped by “solid Easter sales,” a strong performance in seasonal goods and “improving strength in our overall food business, including fresh” fare.
But the company reported that traffic to its stores was essentially flat (up 0.1%) and gross profit dropped, possibly reflecting the shift to more low-margin groceries and price reductions.

Wal-Mart Canada is estimated to generate about $23-billion in annual sales. The retailer doesn’t break out the amount of its sales in this country.

Source: From Article by Marina Strauss, The Globe and Mail

Wal-Mart Misses Estimates, Impacted by Currency Fluctuations and Consumer Saving

Wal-Mart Stores Inc. posted first-quarter earnings that missed analysts’ estimates after currency fluctuations ate into profit.

Net profit attributable to Wal-Mart fell to $3.34-billion, or $1.03 per share, in the first quarter ended April 30, from $3.59-billion, or $1.11 per share, a year earlier.

The company reported a 1.1% rise in same-store sales in the U.S. in the first quarter, missing the consensus of an increase of 1.5%, according to analysts polled by research firm Consensus Metrix.

Total revenue fell slightly to $114.83-billion from $114.96-billion.

E-commerce sales globally increased approximately 17%.

The strong dollar had a greater-than-anticipated impact on first-quarter results, the company said. Currency fluctuations hurt net sales by about $3.3-billion and earnings per share by 3 cents.

Analysts on average had expected a profit of $1.04 per share on revenue of $116.21-billion, according to Thomson Reuters.

Wal-Mart forecast second-quarter earnings of $1.06-$1.18 per share, largely below the average analyst estimate of $1.17.

Chief Executive Officer Doug McMillon has been working on a turnaround plan that includes cutting expenses and bolstering efficiency. So far this year, he has eliminated a layer of management within stores and raised the wages of rank-and-file workers. Still, the strong dollar has eroded the value of overseas revenue, and the company is struggling with a broader shift in how shoppers spend their money.

Wal-Mart said in February it would invest $1-billion to increase wages and provide training to U.S. store employees.

“Consumers are spending away from traditional bricks-and- mortar retail as they devote more of their disposable income to cars, homes, technology, etc.,” Patrick McKeever, an analyst for MKM Partners, said in a report before Wal-Mart’s results were released. “And they are also saving.”

“Based on recent surveys, we know that many of our U.S. customers are using their tax refunds and the extra money from lower gas prices to pay down debt or put it into saving,” McMillon said in a statement.

Wal-Mart fell 2.4% to $78 in early trading in New York on Tuesday. The shares had fallen 6.9% this year through Monday’s close.

Wal-Mart Takes on Amazon Prime

Meanwhile last week, Walmart said it will test a new unlimited shipping service for online shoppers this summer that will be priced below Amazon's $99 per year Prime service.

The shipping subscription service will cost customers $50 a year. Products will arrive in three days or less.

Walmart offers a grocery delivery and pickup service in five markets. But the unlimited shipping program marks a substantial commitment and underscores how serious the retailer is about accelerating the growth of its online business, which has seen a slowdown.

Ravi Jariwala, a company spokesman, said the offering is in response to increasing demands from customers who are looking for predictable and affordable shipping. It's also part of Walmart's overall strategy to test new ways to serve customers who are increasingly researching and buying on their PCs or mobile devices and are looking for convenience.

Jariwala said the service will be available by invitation only for now and it will offer more than one million top-selling items, from toys to electronic gadgets. Walmart's online site sells more than seven million products.

For now, he said the service would not offer features like free video and music streaming that Amazon provides. He said that customer feedback will direct how the program will evolve.

Amazon's launched its $99-a-year shipping service called n Prime, a decade ago with the guarantee of standard, reliable two-day shipping on online orders.

Since then Prime has become the cornerstone of Amazon's growth and the e-commerce company said U.S. Prime memberships grew 50% last year.

Source: Reuters, The Associated Press, Wal-Mart Stores, Inc.

Canadian Tire Sees Strong First Quarter Results but Expects Growth to Slow

Canadian Tire Corp. reported a better-than-expected quarterly profit last Thursday, helped by strong sales of home products, sports gear and clothes.

Same-store sales rose 4.7% in the first quarter ended April 4 at Canadian Tire stores. At FGL Sports, same-store sales rose 8.6%, driven by strong footwear and athletic clothing sales.Same-store sales at Mark’s rose 5.5%, helped by demand for men’s casual wear and denim.

Canadian Tire Retail saw retail sales increase 4.5% during the quarter over the same period last year. FGL Sports' retail sales matched its same-store sales growth of 8.6% and Mark's retail sales grew 4.4%.

However, the company said total revenue fell 2.3% to $2.51-billion, hurt by lower gasoline prices in the first quarter. Excluding petroleum, revenue increased 2.2% to $46.1-million during the three months.

Net income attributable to the company fell to $68.5-million from $70.6-million, also hurt in part by the sale of 20% of its financial services business to Bank of Nova Scotia in October.

However, a lower share count kept earnings unchanged at 88 cents on a per share basis. That was higher than analysts’ average estimate of 87 cents per share, according to Thomson Reuters.

Canadian Tire shares have weakened recently but they are up about 56% from this time last year.

"We had a great start to the year with strong sales across the retail businesses and impressive results at Financial Services. We once again owned the seasonal business and customers responded well to our assortments, helping drive the Canadian Tire banner to its best comparable store sales result in a decade," said Michael Medline, President and CEO, Canadian Tire Corporation. "The first quarter is always our smallest, but I am pleased to see continued momentum from all of our businesses."

Despite strong first-quarter results, Canadian Tire has started to feel the pinch of declining oil prices and a weaker Canadian dollar in its business.

The retailer is experiencing a sales growth slowdown mostly in Alberta – and especially at its Mark’s stores – chief executive officer Michael Medline told an analyst conference call last Thursday.

As well, Canadian Tire’s financial-services division is seeing a “slight increase” in writeoffs, Mr. Medline said.

“I expected to see some impact from the downturn in oil prices on our business in Alberta,” he said a few hours after the company’s annual meeting in Toronto. “We are now seeing limited impact. I do not want to overstate it.”

The headwinds come as Canadian Tire prepares to launch in the next few weeks a new flagship store in Edmonton, which will be about one-third larger than its biggest stores today. At the same time, the retailer feels the pressure to bolster its e-commerce initiatives to catch up to rivals, including powerful global digital players.

“There is no question that Canadian Tire is lagging in digital,” said Doug Stephens, founder of consultancy Retail Prophet and author of The Retail Revival: Reimagining Business for the New Age of Consumerism [and a past CHHMA Spring Conference speaker]. “If Canadian Tire has a dollar to invest, it should be going into online and mobile commerce, not into another brick-and-mortar store.”

In a market in which Amazon.ca now owns a share of Canadian e-commerce that is more than four times that of Wal-Mart Canada Corp. and Costco Canada combined, “Canadian Tire has barely moved past offering a static PDF of their weekly flyer,” he said.

Canadian Tire said two weeks ago that it would buy leases for 12 properties previously held by the Canadian unit of Target for $17.7-million.“Target ran into very tough, change-ready competition,” Medline told shareholders.

“They didn’t realize how strong our grocers, our pharmacies, our discount stores and Canadian Tire had become. And once again, the survivors are thriving.” He said the company’s housewares business got stronger before Target arrived and has stayed strong amid its exit.

Still, Canadian Tire has been using its smaller sporting-goods division – especially its Sport Chek chain – to test a range of digital marketing, including Facebook discount offers. As well, Sport Chek has built large, digitally friendly flagship stores that are paying off, the company’s results show.

And despite its challenges, Canadian Tire has gained momentum in all its businesses, Mr. Medline said although he expects the financial-services business to begin to take a more cautious approach, especially in accepting new accounts, because of the uncertain economy, Mary Turner, chief operating officer of the division, said.

“That’s all going to slow down our growth moderately,” she said.

Mr. Medline said Canadian Tire’s namesake stores are still enjoying sales lifts in Alberta but the rate of growth is “moderating somewhat.” At Mark’s, the most affected part of the business is the one that services oil-patch workers in northern Alberta, he said.

Mark’s is also feeling a pinch because it buys a lot of its goods in U.S. dollars, whose value has increased against the loonie thereby making purchasing more expensive, he said.

The CEO acknowledged that the company still has “heavy lifting” to do in its digital efforts as well as cutting expenses even more, although Canadian Tire has made good progress, he said.

“My single biggest priority is to establish Canadian Tire as a world-class leader in innovation and digital,” Mr. Medline said at the annual meeting.

He told reporters the new flagship in Edmonton will go “broad and deep” in a number of product categories, such as tools and hardware, to become a destination and take on rival specialists.

For example, in the last six months, the chain rolled out its higher end Maximum line of tools and accessories to cater to the trade professional, spokeswoman Sandra Buckler said later. Developed through a “rigorous” design and engineering process with upscale features, the line focuses on power-tool accessories such as the Maximum 7 edge titanium drill bit, she said.

The new flagship will also have an array of digital elements, Mr. Medline said.

Source: Canadian Tire Corp., Reuters, The Globe and Mail

Marketplace Stats & Trends

How Canada’s Taste for Apps Differs from the U.S.

A new study from Flurry, an app analysis company owned by Yahoo!, has found that Canadian’s mobile app usage is growing when compared to time spent browsing online on their devices.

“We have now entered the age of the app economy and now for marketers to engage with consumers in mobile, they have to think about app advertisements and app behaviour,” said Claude Galipeau, country manager for Yahoo Canada.

Looking at 92,000 Canadian devices in March, the study found that 86% of time spent on mobile devices was spent in apps versus 14% in browser. Those figures are very similar to U.S. findings. After that though, there are some interesting differences between users in the two countries.

Canadians spend 16% of their time in music, media and entertainment apps, which is twice the amount of time Americans spend in those apps. Time spent with gaming apps however is an area where Canadians lag far behind the U.S. Canadians spend about 14% of their time in gaming apps compared to 32% for Americans.
Galipeau said one explanation for the difference might be how games are marketed in the two countries.

The study also looked at sessions (how many times a person activates or opens an app) from March, 2014 to March, 2015. It found that total session growth is growing at 26% in Canada.

In terms of areas of growth, health apps, sports, utility and productivity apps are all experiencing very rapid growth in terms of sessions. Health and fitness apps usage have increased by more than 140%, the study found.

Gaming sessions in Canada were flat and lifestyle and retail app usage actually fell by 3%. The decline in lifestyle and retail app usage is at odds with trends globally where the category is growing strongly. One reason given in the study for this anomaly is that e-commerce is still lagging in Canada compared with the rest of the world.

In addition, the report also found that Canadians are embracing large phones, referred to as phablets, with over 14% penetration, which is slightly lower than the global 20% average. As a category, Flurry previously reported that phablets are experiencing 148% year-over-year growth.

Source: Article by Raju Mudhar, The Toronto Star

Economic News

Consumer Confidence Dips in Canada but Continues to Climb in U.S.

Consumer confidence in Canada remains “volatile and uncertain” while it continues to climb in the U.S. amid new job growth and lower gas prices, says a new report.

Canadians’ biggest concerns over the next six months are personal debt, the economy, job security and health, finds Nielsen’s global, first-quarter consumer confidence survey.

It notes that a downbeat economic outlook across the country led to a 10-percentage point decline in sentiment about job prospects to 44% -- the lowest level since 2009 -- and a six percentage point decline for immediate spending intentions to 37%, the lowest level since 2012.

“In Canada, consumer confidence still remains volatile and uncertain even though the recession is well behind us,” said Carman Allison, vice-president of consumer insights, Nielsen Canada.

“A drop in confidence is normal following the holiday spending season when the bills start rolling in, but this year consumers were also reeling from the effects of the coldest winter in 25 years, which led many to spend more time indoors,” she said.

The situation was exacerbated by the drop in oil prices, which led to significant job losses across Canada, she said.

“While consumers may be saving at the pump, the cost of most other essentials is on the rise, and inflationary pressures still plague wallets,” Allison added.

U.S. consumer confidence increased one point on Nielsen’s first-quarter confidence index to a score of 107, maintaining an above-the-baseline optimism level (the global average is 97 points this quarter) for a year now.

Conversely, the study says confidence declined in Canada by six points to 96 compared to the fourth quarter of 2014, which is the country’s lowest score since 2012.

Meanwhile India scored highest overall on Nielsen’s first-quarter consumer confidence index, published on Tuesday, rising one point to 130 from the fourth quarter of 2014 to levels not seen since 2011.

The report found optimism is also rising in major advanced economies such as Japan and Europe, but consumers in large emerging markets such as Brazil, Russia and China are turning more pessimistic about their prospects.

“In the U.S., optimism continued to move forward in the first quarter, likely influenced by the addition of nearly 600,000 new jobs and low gasoline prices, which put more money in consumers’ wallets,” said James Russo, senior vice president, Nielsen Global Consumer Insights.

And U.S. consumer spending picked up in the first quarter, with fast-moving consumer goods sales rising 2.5%, compared to an annual increase of only 1.4% during 2014, he said in the report.

“While 2015 is off to a good start, half of Americans are still in a recessionary mindset. As this undercurrent of uncertainty still permeates, consumers continue to think carefully about how and where they spend their money,” Russo added.

The report found 24% of Canadians have no spare cash after essential expenses, up from 18% one year ago. And only 38% of Canadians feeling good about local job prospects compared to 45% of Americans, it says.

The second quarter of 2015 will be key to determining if the shift in mindset is temporary or will define another challenging year ahead, said Allison.

The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted Feb. 23 - March 13, 2015 and polled more than 30,000 online consumers in 60 countries. It has a margin of error of within 0.6 percentage points.

By the numbers:

57%: of Canadians have changed their spending habits to save on household expenses in the last year.
59%: have cut down on takeout.
53%: have cut down on out-of-home entertainment, trying to save on gas and groceries
35%: Of Americans say they live paycheck to paycheck.

Number One: India’s consumer confidence rank globally on the consumer confidence index since the first quarter of 2014.

Source: Article by Lisa Wright, The Toronto Star

Canadian Home Resales Increase Again in April

Home resales in April were up from March as Canadians took advantage of low interest rates.

The Canadian Real Estate Association (CREA) reported last Friday that home sales through its MLS system were up 2.3% in April compared with the previous month.

The increase was the third consecutive month-over-month climb, but it was down from the 4.1% increase in March.

“As expected, low mortgage interest rates and the onset of spring ushered many home buyers off the sidelines, particularly in regions where winter was long and bitter,” CREA president Pauline Aunger said in a statement.

Sales were up on a month-over-month basis in two-thirds of the markets tracked, led by gains in Montreal and the Toronto region. Montreal posted a gain of 4.4%, while Toronto added 2.9%.

“In recent years, the seasonal pattern for home sales and listings has become amplified in places where listings are in short supply relative to demand,” said Gregory Klump, CREA’s chief economist. “This particularly stands out in and around Toronto. Sellers there have increasingly delayed listing their home until spring. Once listed, it sells fairly quickly. Sales over the year as a whole in Southern Ontario are likely being constrained to some degree by a short supply of single family homes. However, the busy spring home buying and selling season has become that much busier as a result of sellers waiting until winter has faded before listing.”

Actual (not seasonally adjusted) activity in April stood 10.0% above levels reported in April 2014. This marks just the third time ever that sales during the month of April topped 50,000 transactions.

Sales were up on a year-over-year basis in about 70% of all local markets, led by activity in the Lower Mainland of British Columbia, Greater Toronto, and Montreal. Of the 18 local markets that set new records for the month of April, all but two were in Southern Ontario.

However, compared with a year ago, sales in Edmonton, Calgary and Regina were sharply lower.

The number of newly listed homes was virtually unchanged (+0.1%) in April compared to March. Below the surface, new supply rose in almost two thirds of all local markets, led by a big rebound in Halifax-Dartmouth following a sharp drop in March. This was offset by declines in Greater Vancouver, Victoria, and the Okanagan Region, as well as by a continuing pullback in new supply in Calgary. New listings in Calgary have dropped by one-third from their multi-year high at the end of last year to their current multi-year low.

The national sales-to-new listings ratio was 55.3% in April, up from 50.4% three months earlier as the ratio has steadily risen along with sales so far this year.

There were 5.9 months of inventory on a national basis at the end of April 2015, down from 6.1 months in March and 6.5 months at the end of January when it reached the highest level in nearly two years. While the sales-to-new listings ratio and months of inventory measures of market balance indicate that the housing market has tightened on a national basis over the past few months, both measures remain firmly entrenched in balanced market territory.

The Aggregate Composite MLS® HPI rose by 4.97% on a year-over-year basis in April, on par with the 4.95% year-over-year gain recorded in March.

Year-over-year price growth accelerated in April for apartment units and two-storey single family homes, while decelerating for townhouse/row units and one-storey single family homes.

Single family home sales continue to post the biggest year-over-year price gains (+5.84%), led by two-storey single family homes (+6.89%). By comparison, the rise in selling prices was more modest for one-storey single family homes (+4.20%), townhouse/row units (+3.87%), and apartment units (+2.60%).

Price gains varied among housing markets tracked by the index. For the third consecutive month, Greater Vancouver (+8.50%) and Greater Toronto (+8.43%) posted the biggest year-over-year price increases. By comparison, Fraser Valley, Victoria, and Vancouver Island recorded gains in the range between 2.7% and 4.0%.

Price growth in Calgary continued to slow, with a year-over-year increase of just 2.21% in April, the smallest gain in three years and the tenth consecutive month for which the gain diminished.

Prices remained stable on a year-over-year basis in Saskatoon and Ottawa, while rising slightly in Greater Montreal, dipping slightly in Greater Moncton, and falling in Regina.

The MLS® Home Price Index (MLS® HPI) provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is.

The actual (not seasonally adjusted) national average price for homes sold in April 2015 was $448,862, up 9.5% on a year-over-year basis.

The national average home price continues to be upwardly distorted by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. Excluding these two markets from calculations, the average price is a more modest $339,893 and the year-over-year gain shrinks to 3.4%.

Source: CREA, The Canadian Press

New Home Prices in Canada Unchanged in March; Calgary Prices Drop

New home prices in Canada were flat in March as prices in the oil-sensitive city of Calgary saw their first decline in over three years, data from Statistics Canada showed last Thursday.

The national figure fell shy of economists' expectations for a gain of 0.1%. Compared with a year ago, prices rose 1.2%, the slowest pace of growth since February 2010.

The agency’s New Housing Price Index (NHPI) was unchanged in March, following a 0.2% increase in February. Monthly price increases in eight metropolitan areas were offset by decreases in seven metropolitan areas, resulting in no change to the Canada level index.

The combined region of Toronto and Oshawa, and the census metropolitan area (CMA) of Winnipeg recorded the largest price increases in March, both up 0.4%.

Builders in Toronto and Oshawa cited market conditions, smaller promotional packages and higher labour costs as the main reasons behind the gain. This was the largest price increase in the region since April 2014.

According to builders in Winnipeg, higher new home prices were mainly due to an increase in the cost of materials, as well as the cost to purchase land. This was the largest monthly price increase in Winnipeg since January 2014.

Prices in Charlottetown rose 0.3% after being unchanged for two months. Builders in that CMA reported market conditions and higher land development costs as the main reasons for the advance.

New housing prices rose 0.2% in Hamilton and St. Catharines–Niagara in March. Higher prices due to market conditions were moderated by lower negotiated selling prices in both CMAs.

The CMAs of St. John's, Halifax and Québec also recorded price increases in March, all up 0.1%. The price gain in St. John's followed three months of no change.

Prices were unchanged in 6 of the 21 metropolitan areas surveyed.

For the second consecutive month, prices were unchanged in Vancouver. Builder reports of price increases for the few remaining units in current subdivisions were offset by some builders lowering prices as a result of current market conditions and lower selling prices.

The CMA of Calgary (-0.4%) recorded the largest price decrease in March. The decline was the first since November 2011 and followed two months of no price movement. Builders cited current market conditions and promotional prices to attract sales as the main reasons for the decrease.

Market conditions contributed to a 0.2% price decline in the combined region of Saint John, Fredericton and Moncton, as well as in Saskatoon. The decrease in Saint John, Fredericton and Moncton followed three months of no change.

New housing prices also fell in Ottawa–Gatineau, London, Regina and Edmonton, all down 0.1%.

On a year-over-year basis, the NHPI rose 1.2% in March, the smallest annual increase since February 2010.

The combined metropolitan region of Toronto and Oshawa was the top contributor to the annual growth with prices up 2.6% compared with March 2014. This was the largest annual increase since July 2013.

The CMA of Hamilton recorded the largest annual increase in March, with prices up 3.2% compared with the same month last year. Other significant year-over-year increases were reported in Calgary (+2.8%), London (+2.3%) and Kitchener–Cambridge–Waterloo (+2.1%). This was the smallest annual price increase in Calgary since November 2012.

Among the 21 metropolitan areas surveyed, 7 posted year-over-year price declines in March: Ottawa–Gatineau (-1.4%), Victoria (-1.3%), Regina (-0.8%), the combined metropolitan region of Saint John, Fredericton and Moncton (-0.6%), Vancouver (-0.5%), Saskatoon (-0.2%) and Charlottetown (-0.2%). This was the smallest annual price decline in Vancouver since December 2012.

Source: Statistics Canada, Reuters

U.S. Housing Starts Surge in April to Highest Since November, 2007

U.S. housing starts jumped to their highest level in nearly 7-1/2 years in April and permits soared, offering a glimmer of hope for an economy that is struggling to regain strong momentum after a dismal first quarter.

Groundbreaking surged 20.2% to a seasonally adjusted annual pace of 1.14 million units, the highest since November 2007, the Commerce Department said on Tuesday. The per cent increase was the biggest since February 1991.

March’s starts were revised up to a 944,000 unit rate instead of the previously reported 926,000 unit pace.

Starts for single-family homes, which accounts for the largest share of the market, soared to their highest level since January 2008. Groundbreaking for the volatile multifamily segment also recorded hefty gains last month.

Permits for future home construction jumped 10.1% to a 1.14 million-unit rate, the highest since June 2008. Permits have been above a 1 million-unit pace since July.

Economists polled by Reuters had forecast groundbreaking increasing to a 1.02 million-unit pace and permits rising to a 1.06 million-unit rate last month.

While the robust data probably overstates the health of the U.S. housing market, the signs of strength fit in with views that a housing rebound is under way. Housing’s strength is in stark contrast with weakness in consumption, business spending and manufacturing.

There is cautious optimism that housing, which has seen an acceleration in home sales and prices, will combine with a tightening labour market to lift the U.S. economy out of the soft patch hit at the start of the year.

The government reported last month that U.S. GDP grew at a 0.2% annual pace in the first quarter. But weak March trade and inventories data suggested the economy actually contracted.

The government will published its revised GDP data next week. Output at the start of the year was held down by a harsh winter, a strong dollar, a ports labour dispute and deep energy spending cuts in the first quarter.

Groundbreaking rose in three of the four regions, but fell 1.8% in the South, where most of the home building takes place. Last month, single-family homes groundbreaking gained 16.7%. Groundbreaking for the multi-family homes segment increased 27.2%.

Single-family permits increased 3.7% last month. Multi-family permits surged 20.5%.

Source: Reuters

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