CHHMA - EYE ON OUR INDUSTRY
Volume 16, Issue 38, October 5, 2016
Inside This Issue:
• Register Now: One-Day Seminar on the Secrets of Power Negotiating® and Developing Persuasive Proposals Close to Selling Out!
• Join Us in Montreal for the TIMBER MART (Bernie Owens) Breakfast Seminar on October 26th
• Beautiful Day at the 15th Annual Industry Memorial Golf Classic
• Reminder: ÉEQ Reports for 2015-2016 Schedule of Contributions Due by October 11th
• New Pavilion to Spotlight Smart Home & Connected Products at the 2017 International Home+Housewares Show
• Sears’ Craftsman Said to Draw Interest from Black & Decker, TTI
• Costco to Expand Aggressively in Canada Over the Next Year, Adding Seven Stores in Fiscal 2017
• Federal Government Closes Tax Loophole Used by Foreign Home Buyers, Hikes Mortgage Scrutiny
• Construction Jobs to Soar in Toronto by 2031
• IMF Trims Canada’s Growth Forecast Due to the U.S.
• Canada’s Economy Surges for Second Month, Bolsters Outlook
• Canadian Retail Sales Cool Off
• Latest U.S. Economic News
Association News
Register Now: One-Day Seminar on the Secrets of Power Negotiating® and Developing Persuasive Proposals Close to Selling Out!
The CHHMA has organized an information-packed one-day learning program that will provide attendees with proven strategies and tips to help improve your negotiating and business proposal development skills.
Don’t delay – register NOW, attend, and get the expert advice and insights you need to improve business results, profitability, and outcomes!
One-Day Learning Program Divided Into Two Sessions:
Morning Session: Secrets of Power Negotiating® – Key Insights for Improving Negotiating Effectiveness
Afternoon Session: Developing Persuasive Proposals
Note: Members/guests cannot register for only one of the two sessions.This is a one-day program.
Date: November 23, 2016
Venue Location:
Centre for Health & Safety Innovation (CHSI)
5110 Creekbank Road
Mississauga, Ontario
(905) 219-0044
http://www.tchsi.ca
Tuition Fee: $399.00 plus $29.95 for course materials (HST not included)
Program Time Frame: This one-day program will run from 8:30 a.m. until 4:30 p.m. There will be one 15-minute refreshment break
in the morning and afternoon, as well as one 50-minute lunch break.
Why You Need to Attend This Impactful One-Day Program:
Effective negotiating and proposal development skills are essential for everyone.The hardware and housewares industry and retail selling/marketing environment have become increasingly complex and competitive. People who work in this industry need to effectively develop and deliver business and line item reviews, propose new products, and/or make recommendations regarding the category, and then they need to be able to negotiate properly with customers/accounts across a wide range of channels. Also, people are negotiating all the time with their colleagues, co-workers, and senior management.
Whether you are an experienced senior manager or a sales/marketing professional looking for a few new ideas and strategies – or a novice looking for the fundamentals – this one-day program will provide you with proven strategies you can implement immediately.
Who Should Attend:
This one-day program is designed for senior management, sales management, all levels of sales and account management, and marketing and customer service personnel.Anyone involved in communicating and negotiating with customers/accounts can benefit from attending.
What You Will Learn:
This highly beneficial one-day program will be divided into two separate sessions. The following are some of the key learnings that will be covered during the program:
• Learn a proven and powerful negotiating process and methodology.
• Be able to effectively prepare and plan for all negotiations.
• Understand the three critical stages of every negotiation.
• Learn the three key factors that influence every negotiation.
• Learn how to properly and effectively make concessions.
• Learn valuable techniques on how to deal with difficult objections in negotiations.
• Learn one key negotiating gambit and corresponding countergambit.
• Learn several powerful negotiating tips, questioning techniques, and phrases that will help to improve negotiating effectiveness and help to optimize outcomes.
• Reduce unnecessary compromise and excessive price discounting.
• Learn a proven formula for how to construct your proposals and business reviews.
• Learn how to improve your company’s value proposition in proposals.
• Learn how to shorten the selling cycle and influence faster decision making by customers.
• Learn how to move away from feature-based communication in your proposals and articulate the real benefits for customers.
Meet Negotiating Coach® Michael E. Sloopka:
Michael is a recognized negotiating and sales process transformation expert and a highly rated professional speaker, teacher, and coach who assists organizations and individuals by joining their team for specific negotiating projects or by training their staff to negotiate and manage customers and vendors more effectively on a daily basis. He is adept at helping his clients build, develop, and maintain high-performing sales and marketing teams. He is also a leading expert in diagnosing selling and buying behaviour and the decision-making dynamics that directly affect the outcome of a negotiation.Michael has written articles or contributed to articles for the Globe and Mail newspaper, Investors.com, Forbes.com, AMEX Open Forum for Small Business, and Selling Power and Profit magazines.
Offering more than 30 years of successful negotiating experience in sales, marketing, purchasing, distribution, and consulting – from small business to multinational corporations, from personal transactions to multimillion-dollar extended supply agreements and contracts – Michael has added hundreds of millions of dollars to his clients' collective bottom line through effective education, consulting, coaching, and negotiation facilitation. He has personally taught tens of thousands of individuals a proven process and methodology, as well as strategies and tactics, to optimize their outcomes. Michael has previously delivered high-impact presentations at various CHHMA conferences and educational sessions.
What Each Attendee Will Receive:
With fully paid tuition, each attendee will receive a bound workbook and the MP3 downloadable version of the Power Negotiator Toolkit Audio Learning Program that includes the following:
• Secrets of Power Negotiating® Audio Learning Program: Almost 6 hours of proven content and advanced material containing all the methodology, strategies, and tactics you will need to become a power negotiator.
• Secrets of Power Negotiating® Key Verbal Phrases and Questioning Techniques: Over 106 minutes of Michael Sloopka’s “best practice” phrases, scripts, questioning techniques, insights, and tips – including numerous personal and business application examples.
• Secrets of Power Negotiating® Personality Type and Corresponding Negotiating Style Self-Assessment: A PDF format
printable version of a self-assessment questionnaire and the interpretation information that you need in order to learn more about yourself and how to interact more effectively with different personalities involved in negotiations.
Spots are limited so register now while you still can for this Impactful Professional Development Learning Opportunity
Join Us in Montreal for the TIMBER MART (Bernie Owens) Breakfast Seminar on October 26th
The CHHMA is pleased to be presenting Mr. Bernie Owens, President of TIMBER MART, at a CHHMA Breakfast Seminar on the morning of October 26 at the Hôtel Holiday Inn Montréal-Longueuil.
Mr. Owens began his career in the building-supply industry over thirty years ago, serving a long tenure at building-material manufacturer, CertainTeed – a subsidiary of multinational corporation, Saint-Gobain.Throughout his 21 years at CertainTeed, Mr. Owens served various roles including, General Manager - Finish Products for North America and Vice President of Sales for the company’s gypsum and insulation business units. Over the years, Owens adopted global best practices and fostered relationships with buying groups and building-material suppliers nationwide. Owens also went on to further his studies in business at international business school, INSEAD and York University’s Schulich School of Business.
Today, as the president of TIMBER MART, Mr. Owens leads the organization with a global industry perspective, fresh ideas, clear vision, and a relentless drive to make TIMBER MART the buying group of choice for Canadian independent building material and hardware entrepreneurs.
We look forward to hearing from Mr. Owens and his inside look into how he’s led TIMBER MART through some of their biggest organizational changes over the last three years. He'll explain how he’s leveraged change for TIMBER MART to become a best-in-class organization today – and supports Canadian independent entrepreneurs with a buying group that is better, faster and lower cost than ever before.
After the presentation, there will be a Question and Answer Period. Mr. Owens will also be accompanied by members of his management team.
Click here for all the details and to register.
Beautiful Day at the 15th Annual Industry Memorial Golf Classic
The 15th Annual Industry Memorial Golf Classic took place last Tuesday, Sept. 27, at the Blue Springs Golf Club in Acton, Ontario.
Golfers were treated to a beautiful sunny day on the challenging course and enjoyed their time with colleagues, customers and friends from the industry. Once again, we had great support from the management team and buyers of Home Hardware - many of who were in attendance.
This event honours stalwarts from the hardware & housewares industry who have recently passed away and this year’s honourees were David Holden, Leonard Lee and Warren Parr. As always, all past honourees were remembered as well.
After golf, an afternoon dinner and silent auction was held to raise money for the CHHMA Scholarship Program and we would like to thank all the companies who provided items for the auction and individuals who bid on them. In addition, money was raised from hole sponsorship (thank you sponsors!) and the purchase of event passports that allowed participants to enter into all the hole competitions and draws. As a result, a number of skilled and lucky folks walked away with some great prizes.
Most importantly, we were there to remember the honourees. We were joined on the day by David Holden’s wife Theresa and several colleagues of Dave’s from Hamilton Beach who talked about their good times working with him over the years. Bill Wilson, a long-time colleague of Warren Parr was on hand to share his fond memories of working with Warren at D.H. Howden and although they were unable to attend, Leonard Lee’s son Robin (current President & CEO of Lee Valley Tools) passed on his appreciation on behalf of the family for the industry taking the time to honour Leonard at the event.
Stewardship News
Reminder: ÉEQ Reports for 2015-2016 Schedule of Contributions Due by October 11th
Éco Entreprises Québec (ÉEQ) would like to remind stewards that they have until October 11 to submit their Company Report for the 2015-2016 Schedule of Contributions in the ECO-D system.
You can get more information in the documentation section and training capsules of the Schedule of Contributions section of the ÉEQ website.
The deadline for making the first installment* for your 2015 Company Report is November 13. Contributions are payable in four installments* (two installments only for flat fees) as per below:
2015 SoC: 80% by November 13, 2016; 20% by January 13, 2017
2016 SoC: 50% by April 13, 2017; 50% by July 13, 2017
2017 SoC: 80% in October; 20% in December (dates to be confirmed)
Companies and organizations subject to the compensation plan are invited to participate in one of two ÉEQ consultation meetings on the 2017 Schedule of Contributions in October. It will be the ideal time to ask questions and give your opinion regarding the Schedule of Contributions before it is submitted to the government.
Montreal: Tuesday, October 25, 2016 from 10:30 a.m. to 12:30 p.m.
Centre Sheraton Montréal, 1201 Boulevard René-Lévesque West, Montréal, QC, H3B 2L7 (Jarry and Joyce Hall)
Toronto: Thursday, October 27, 2016 from 10:30 a.m. to 12:30 p.m.
International Centre, 6900 Airport Rd, Mississauga, ON, L4V 1E8 (Lyra Hall)
Please note that the October 25 consultation will be in French with simultaneously translation to English and broadcast on the web. The October 27 meeting will be conducted in English only without simultaneous broadcast. Lunch will be served on site after each meeting to promote networking.
Companies wishing to participate in consultations on the 2017 Schedule of Contributions can register now.
If you require any further assistance or have any questions, you can email service@ecoentreprises.qc.ca or contact our CHHMA Stewardship Program Consultants:
Al Marks, 416-282-0022 ext.24, steward@chhma.ca
Duncan Deans, 416-282-0022 ext.22, ddeans@chhma.ca
Source: Éco Entreprises Québec (ÉEQ)
Industry News
New Pavilion to Spotlight Smart Home & Connected Products at the 2017 International Home + Housewares Show
The International Housewares Association (IHA) would like to pass on some exciting news regarding the 2017 International Home + Housewares Show, taking place in Chicago at McCormick Place from March 18-21, 2017.
New to the show next year will be a special pavilion featuring smart home and connected products as well as displays and presentations providing insights into smart home products and developments.
The future of housewares is quickly moving toward the smart home. With innovations from established and start-up companies, connected and smart products, once only a dream, are fast becoming a reality. The 2017 International Home + Housewares Show will spotlight these innovative housewares products in the IHA Smart Home Pavilion.
Located in the Hall of Global Innovation in the Lakeside Center lobby, the IHA Smart Home Pavilion will feature up to 12 exhibitors of connected and smart products. The pavilion will include suppliers new to the Show as well as current exhibitors. Companies will be selected by a jury of industry professionals and must meet exclusive criteria set by the industry experts.
“Connectivity is being incorporated into products all around – from light bulbs to coffee brewers to thermostats to ovens – and the IHA Smart Home Pavilion will spotlight these unique products that are changing the way we interact and live,” said Phil Brandl, president & CEO of the International Housewares Association, in a press release.
To help identify and recruit suitable companies that offer smart and connected products, IHA is working with two top influencers in the tech industry: Carley Knobloch and Mike Wolf. They will also create Show educational presentations on smart home developments and promote housewares innovations to consumer media, Brandl said.
Knobloch is a digital lifestyle expert and a regular contributor on the Today Show and CNN. She’s also a technology consultant and host for the HGTV Smart Home, where she makes smart homes easy, approachable and fun. Knobloch also has been featured in Real Simple, Allure, Redbook and Good Housekeeping. Her blog can be found at http://carleyk.com. Wolf is the creator and host of a leading smart home podcast, “The Smart Home Show.” He combines in-depth market analysis with insightful commentary on the latest news and updates in the space. Wolf has also become a leading authority on the Smart Kitchen and is the founder of the Smart Kitchen Summit in Seattle, Wash. http://www.smartkitchensummit.com.
In addition to the pavilion, smart products will also be recognized at the Show with a category in the IHA Global Innovation Awards (gia). All Show exhibitors can enter this category through submissions in the New Product Showcase. Finalists will be included in the New Product Showcases in the Buyers Clubs and in the IHA Global Innovation Awards display in the Hall of Global Innovation. The winner of the smart home gia will be announced at the invitation-only gia gala dinner on Saturday, March 18.
Exhibitors will also be able to promote their smart home products through special signage, their Housewares Connect 365 profiles, the mobile app and Show directories.
The 2017 Show will feature more than 2,200 exhibitors from around the globe showcasing their new products throughout five expos and 62,000 total attendees. Show badge registration is now available at http://www.housewares.org/show/register-plan.
For further information and the exhibitor application for the IHA Smart Home Pavilion, click here or contact Alyssa Fulton, manager, trade show sales, at afulton@housewares.org or 1-847-692-0125.
For more detailed information on the show itself and the city of Chicago including:
– Exhibitor Information
– 2017 Show Events Information
– Suggestions for Things to See and Do in Chicago
– Chicago Restaurant Suggestions
Click here for the home + housewares SMart Guide magazine.
Sears’ Craftsman Said to Draw Interest from Black & Decker, TTI
Sears Holdings Corp.’s sale of its Craftsman tool business has attracted bidders including Stanley Black & Decker Inc. and Hong Kong’s Techtronic Industries Co., people with knowledge of the matter said.
Other companies such as U.S.-based Apex Tool Group and Sweden’s Husqvarna have also explored possible offers for Craftsman, according to the people. Final bids, which may value the brand at about $2 billion (U.S.), are due at the end of the month, said the people, who asked not to be identified because the information is private.
There’s no guarantee that the potential suitors will decide to proceed with a formal proposal, the people said.
Sears announced plans in May to consider options for its Craftsman, Kenmore and DieHard brands as well as its Sears Home Services repair business, signalling the unprofitable retailer may again be turning to asset sales amid continued losses. The company said at the time it hired Citigroup and LionTree Advisors and would “aggressively” evaluate all alternatives for the businesses.
Stanley Black & Decker, which traces its roots to 1843, calls itself the world’s largest tools and storage company. It employs more than 52,000 people in 50 countries, according to its website.
Shares of Techtronic Industries have fallen 4.4% in Hong Kong trading this year, giving it a market value of about $7.1 billion. The company, known as TTI, makes Dirt Devil and Hoover vacuum cleaners as well as Milwaukee power tools, Stiletto hammers and Homelite chainsaws.
Representatives for Hoffman Estates, Illinois-based Sears, TTI, Apex Tool of Sparks, Maryland, and Husqvarna declined to comment. A representative for Stanley Black & Decker, based in New Britain, Conn., didn’t respond to requests for comment.
The brands being reviewed by Sears — Craftsman tools, Kenmore appliances, and DieHard auto batteries — are staples found in many American households and key assets inside the company. Yet their sales have been slipping, even after Sears hired a licensing agent in 2012 to offer them outside of Sears and Kmart stores.
With Sears stores showing little sign of a revival, chief executive officer Edward Lampert has been considering selling off parts of the company to bring in cash. Lampert — a hedge fund manager who’s also the retailer’s chairman and largest shareholder — already has hived off the Sears Hometown and Outlet Stores business and Land’s End clothing brand, while also selling off store locations and moving others into a real estate investment trust.
Source: Article by Bloomberg News
Costco to Expand Aggressively in Canada Over the Next Year, Adding Seven Stores in Fiscal 2017
Costco is aggressively stepping up its expansion in Canada after years of strong success in this market, a move likely to put even more of a squeeze on traditional grocers such as Loblaw and Sobeys.
The U.S. warehouse club giant, which has annual sales of close to $21 billion in Canada and 91 stores across the country, will open seven new stores in fiscal 2017, the company revealed on its fourth quarter conference call with analysts last Friday — about double its most robust annual rate.
“I think the fact that we are opening so many right now has to do with very strong sales over the last few years,” said Richard Galanti, the retailer’s executive vice-president and chief financial officer, said during the call last week.
“We have been enjoying 5% to 9% (same-store sales) in local currency in each of the last few years up there, and so it keeps getting stronger.”
In Canada’s mature markets, there might sometimes be cannibalization to older outlets when Costco adds new stores, Galanti said, but “the business that’s added net of cannibalization, we’ll find that existing members will then be shopping more frequently, because they are closer.”
Costco, whose Canadian members pay a $55 annual membership fee in order to shop there, said about 90% of its members in the U.S. and Canada renew memberships annually. Galanti gave no update on the growth ceiling for the company’s warehouses, though Canadian executives had earlier pegged the number at about 110.
Typically, Costco opens one to three warehouses a year in Canada, notes analyst Keith Howlett of Desjardins Securities, who said the latest news bodes ill for traditional grocery companies, in particular Empire Co., owner of the struggling Safeway business in Western Canada and Sobeys in the East.
“Costco Canada has been an outstanding success and dominates the wholesale club segment,” Howlett wrote in a note to clients.
“The membership warehouse club format remains primarily a threat to conventional supermarkets rather than to the hard discount channel (such as No Frills). Empire, as the largest operator of conventional supermarkets in Canada, would appear to have the greatest exposure to Costco.”
The analyst estimated opening a Costco Canada is equivalent to opening four to five conventional supermarkets.
“Our estimate is that Costco Canada, Walmart Canada and Metro are clustered together with similar national market shares,” the analyst said. Metro operates only in Quebec and Ontario.
An August report from Kevin Grier Market Analysis and Consulting noted Canadian grocers have seen their market share threatened by general merchants such as Walmart and Costco in recent years: In 2015, grocery retailers’ share of Canadian food sales was about 78%, a steady drop from 84% in 2010.
Between 2004 and 2015, the general merchandise channel’s rate of growth for food sales increased at a compound annual rate of 11.6%, according to Statistics Canada. In the same period, the grocery channel’s food sales increased at a compound rate of just over 3%.
Howlett notes that Costco Canada’s same-store sales growth appeared to be been moderating in the fourth quarter, which ended Aug. 28. Its same-store sales rose 4% in August, below the 5% rate of the entire fourth quarter and the full fiscal year same-store sales rate of 8%.
Last Friday, Costco Wholesale Corp. reported fourth-quarter earnings that beat analysts’ estimates, even as falling grocery prices cut into its sales growth. Profit amounted to $1.77 (U.S.) a share in the period. Analysts had estimated $1.73 a share, according to data compiled by Bloomberg.
Overall, the chain’s same-store sales rose 3% when gas and foreign-exchange fluctuations were excluded. U.S. sales were hurt in part by the company switching its store credit card to Visa from American Express in June. Credit cardholders complained they hadn’t received the new card or faced long wait times to activate it.
Total revenue amounted to $36.6 billion, just shy of the $36.9 billion that analysts estimated.
Source: The Financial Post, Bloomberg News
Government & Legislative News
Federal Government Closes Tax Loophole Used by Foreign Home Buyers, Hikes Mortgage Scrutiny
The federal government is taking aim at slowing Canada’s overheated housing market with new measures, including closing a tax loophole used by foreign buyers and stress testing more domestic mortgages.
Finance Minister Bill Morneau announced the changes during a conference Monday, describing them as a way to ensure that the country’s housing market remains stable and affordable for Canadian buyers.
Morneau also said that the federal government is now in consultation with “market participants” about finding ways for lenders to take on more of the risk in the current mortgage market.
“Currently, lenders are able to transfer virtually all of the risk of insured mortgages to mortgage insurers, and indirectly to taxpayers through the government guarantee,” the government said in a news release.
In a press conference, Morneau avoided referring directly to foreign buyers, but a tax loophole that had allowed some to avoid paying capital gains taxes as their homes appreciated in value is also being closed.
Morneau said that foreign buyers who were not residents at the time a home was bought will no longer be able to claim a principal residence exemption, and that families will only be able to designate “one property as the family’s principal residence for any given year.”
The principal residence exemption means homeowners in Canada who designate a property as their principal residence do not have to announce the sale of that property, nor do they have to pay capital gains taxes if the value of the home has increased from the time of purchase to the time of sale.
Capital gains must be paid on homes that are owned, but used as a rental property to generate income, when they are sold.
The federal government will also be implementing “mortgage stress tests” for all insured borrowers starting Oct. 17. Morneau said that low-ratio insured mortgages — homebuyers who make a downpayment of at least 20% of the property purchase price — will begin facing the same stricter eligibility requirements as homebuyers with lower down payments.
The changes will not affect Canadians with existing mortgages.
Morneau said that while he believes the overall housing market is “sound,” he wants to ensure Canadians are taking on mortgages they can afford.
“Some buyers are taking on high risk in a rush to buy their homes,” he said.
The federal intervention comes on the heels of a property tax on foreign buyers in Vancouver, which went into effect on Aug. 2.
The levy applies to buyers who are not Canadian citizens or permanent residents, and corporations that are either not registered in Canada or are controlled by foreigners, and adds $300,000 to the purchase of a $2-million home.
Soaring housing prices, especially in the red-hot markets of Vancouver and Toronto, have triggered a debate about the role of foreign money.
A number of economists have voiced support for the idea of taxing foreign home buyers. Last month, CIBC World Markets said that Ontario has “no choice” but to soon announce a similar tax on overseas buyers given the B.C. tax.
Last week, Bank of America Merrill Lynch warned that there was plenty of signs that foreign buyers were warping the Canadian housing market and that it would likely lead to increased policy action.
“Evidence of a large foreign presence is abundant,” the economists wrote. “For example, resale house prices fell by 19% mom in Vancouver in August, the first month of a new foreign real estate transaction tax.”
Ottawa has been preoccupied with the issue, with Mr. Morneau creating a working group to conduct a “deep dive” into the state of the housing market and make recommendations on policy.
Mr. Morneau’s announcement follows a Globe and Mail investigation that revealed a network of speculators flipping homes for profit and avoiding taxes by classifying them as principal residences.
Under the Canadian tax code, homeowners do not have to report the sale of any property that they designate their principal residence, and do not pay tax on the increased value – or capital gains – of that home. In order to make that designation, a homeowner, their current or former spouse or any of their children must have lived in it at some time during the year for which the designation is claimed.
However, there has been widespread abuse of the exemption by foreign buyers who claim residency either for themselves or their spouses or children simply in order to avoid paying taxes on real estate speculation. Non-resident investors must pay capital gains tax at the time of a sale.
Mr. Morneau announced in June that the government was studying developments in the housing sector, with his department working with Canada Mortgage and Housing Corp. and the Office of the Superintendent of Financial Institutions while consulting with provincial and municipal officials.
Source: The Financial Post, The Globe and Mail
Economic News
Construction Jobs to Soar in Toronto by 2031
Over the next 15 years, the Toronto area will need almost double the number of construction workers it currently has in order to accommodate new infrastructure projects along with an aging workforce, says a new report by the Toronto Region Board of Trade.
The study released Tuesday, says the GTA will see an estimated jump of about 147,000 construction-related jobs – both part-time and full-time – by 2031 to work on everything from transit and roads to shopping centres, hospitals, schools and housing. There are currently about 175,000 construction-related jobs in the GTA.
For instance, the number of new residential dwellings required in the region will likely exceed 800,000 units, the report says, worth $230 billion in construction investment.
Over the next 15 years, approximately 118,000 workers are needed for $214 billion worth of planned construction activity, and another 29,000 workers are needed to replace those expected to retire.
“Truly, this is a generation of jobs,” said board president and CEO Janet De Silva.
“While job creation will flow broadly across the economy, it will create a huge demand for skilled and professional workers in the construction industry in particular,” the report says.
It estimates that over the next four years, the Toronto area will require about 9,000 new workers per year – with that number growing to 11,000 workers per year by 2028.
“To build tomorrow’s infrastructure, we must build a pipeline of talent today,” said De Silva.
“The business community knows that if we don’t pay attention to this issue, we run a real risk of not delivering our planned infrastructure on time and on budget,” she noted.
The board is calling on employers, policy makers and education providers to set up a task force to “connect the dots” to attract enough talent to tackle all the upcoming construction projects — including Metrolinx’s ambitious transit plans — in the coming years.
The demand is not just for general labourers but also carpenters, bricklayers, roofers, heavy equipment operators and truck drivers, civil engineers and gas fitters, to name a few. The board report lists positions needed in related fields such as administrative, finance and retail sales.
The study says that 62% of the top 50 construction-related occupations the GTA needs would require some form of diploma, certificate or apprenticeship rather than an extensive university education.
It is “important to inform students and workers alike of the skills and education these occupations require,” says the “Building Infrastructure, Building Talent” document.
Jobs needed from 2017-2031
Labourers -- 16,964
Electricians -- 9,818
Plasterers and drywall installers -- 4,185
Bricklayers – 2,729
Financial auditors and accountants -- 1,175
Crane operators -- 601
Source: Toronto Region Board of Trade, Article by the Toronto Star
IMF Trims Canada’s Growth Forecast Due to the U.S.
The International Monetary Fund (IMF) has lowered its estimates for Canadian growth in 2016 and 2017, pointing to a weaker U.S. economy than projected earlier this year.
The IMF is now forecasting Canada’s GDP will grow by 1.2% this year and 1.9% next year.
Both estimates are 0.2 percentage points lower than an IMF outlook issued in July.
Among other things, it says Canada has been negatively affected by unexpected weakness in the United States.
Economic growth in Canada, the IMF said Tuesday, will be “held back by the severe impact of wildfires in Alberta on oil output in the second quarter.”
There are other factors, of course, such as a weaker-than-expected showing in the United States, which is “compounding the setbacks” from one-time issues such as the wildfires.
“Canada’s oil production is strong, but new investment in oil sand fields is limited,” the IMF added.
The IMF also noted the projected impact of fiscal stimulus around the world, to the tune of over a percentage point in Canada.
The IMF’s revised estimate for the U.S. economy has been lowered by 0.6 percentage points to 1.6%. It’s also lowering the 2017 estimate for the United States by 0.3 percentage points to 2.2%.
The Washington-based organization says the global economy faces subdued economic growth in the short and long term. But it left its estimate for world economic output unchanged at 3.1% this year and 3.4% next year.
“Taken as a whole, the world economy has moved sideways,” IMF chief economist Maurice Obstfeld said in a statement.
“Without determined policy action to support economic activity over the short and longer terms, sub-par growth at recent levels risks perpetuating itself.”
Source: The Canadian Press, The Globe and Mail
Canada’s Economy Surges for Second Month, Bolsters Outlook
Canada’s GDP surged for the second straight month in July, bolstering confidence that the economy is back on track after a slumping spring marred by the Alberta wildfires.
Statistics Canada reported last Friday that real (inflation-adjusted) GDP rose 0.5% per cent in July, adding to June’s 0.6% gain – marking the strongest two-month run for GDP growth in nearly five years. The strong July result was driven chiefly by a continued recovery in oil production and petroleum-product manufacturing, following the devastating wildfires that crippled Alberta’s huge oil sands region throughout May and into early June.
Economists had anticipated that the economy would benefit from the bounce back in the Alberta energy sector, but the July GDP gain nevertheless exceeded their consensus estimate of 0.3%.
“Basically, all the pieces are starting to fall in place to get Canada on a somewhat stronger growth track in the year ahead,” said Sal Guatueri, senior economist at BMO Capital Markets. “It does suggest that Canada’s economy is moving forward.”
While the post-wildfire return of oil sands production was a big part of the story (up a whopping 19% month over month, returning to levels seen in the months leading up to the fires), July’s growth was actually broadly based, with 18 of 21 sectors showing growth. Economists estimated that the gains in oil and gas production accounted for roughly 0.3 percentage points of the GDP gain, meaning the rest of the economy generated month-over-month growth of a healthy 0.2%.
Economists said the strength in June and July reaffirms their expectation that the Canadian economy probably grew at a pace of more than 3%, annualized, in the third quarter that ended Friday – a strong recovery from the second quarter’s bleak 1.6% contraction. But they also noted that the year-over-year growth for real GDP in July was a decidedly modest 1.3%, probably a better indicator of the economy’s unspectacular trend when looking past the sharp shorter-term effects from the wildfire.
“The 1.3% growth pace indicates that the worst is indeed behind us for the Canadian economy, but that there’s only a small margin to cushion us against the chance of another slowdown,” said CIBC economist Nick Exarhos in a research report. “Although it was an easy call to forecast a drop in second quarter and a rebound in activity in the third, given what happened in the oil sands through the summer, the fourth quarter outlook and beyond remains more challenging.”
In addition to the 3.9% increase in mining, quarrying and oil and gas extraction (the segment that includes oil sands production), the manufacturing sector grew 0.4%, led by an 8% rebound in the making of petroleum and coal products, as refineries returned to normal. Retail trade rose 0.3% and wholesale trade advanced 0.1%. Transportation and warehousing rose 1.1% while the accommodation and food services sector rose 1.4%, reflecting strong tourism demand supported by a relatively low Canadian dollar.
Among major industries, only construction suffered a decline, slipping 0.8% month over month – possibly reflecting the slowing momentum in the booming Vancouver market. Government administrative services also declined 0.6%, reflecting the drop-off in work related to the spring’s federal census.
The Canadian dollar initially surged nearly half a cent against its U.S. counterpart on the news, as traders took the strong GDP result as affirmation that the economy is rebounding as the Bank of Canada anticipated, meaning the central bank probably won’t need another rate cut to keep its growth outlook on track. However, the gains faded as the market absorbed the details, which, while generally positive, were a reminder that beyond the wildfire rebound, the near-term outlook for the Canadian economy remains uncertain.
In particular, observers are still awaiting more definitive evidence that Canada’s exports are picking up, after what has largely been a disappointing year so far. Most economists, including those at the Bank of Canada, consider export growth to be critical if Canada’s economy is going to establish a stronger and more stable growth pace.
“[However] federal stimulus infrastructure spending and the enhanced child-care benefits program could add a good 0.5% to GDP growth this year and again next year,” said BMO’s Guatieri.
“As long as the U.S. economy comes back a bit and as long as the Canadian dollar remains cheap and interest rates stay low — and, of course, if oil prices continue to grind higher . . . (those are the) meaningful parts of the growth story.”
Source: Statistics Canada, The Globe and Mail, The Financial Post
Canadian Retail Sales Cool Off
Total Canadian retail sales were up only 0.2% in July 2016 from the same month a year ago, according to the latest numbers from Statistics Canada and on a not seasonally adjusted basis. This was the lowest such gain for any month so far this year, and well off the 4.5% overall retail sales increase for the first half of 2016. It appears that the bloom is off the rose going into the back half of the year.
The 3 month trend softened appreciably in July. As a result, the underlying 12 month trend has now flattened and is in danger of heading down.
Many different store types experienced this reversal of fortune in July. The same pattern also occurred in every province and region. Such widespread effects imply that overall Canadian economic conditions are to blame, which does not portend well for the rest of 2016.
Food & Drug
After a strong start to the year, retail sales growth in the Food & Drug sector has come down to more normal levels. In July, sales were up just 2.1%, somewhat off the 2.8% gain recorded for Q2 2016. Both the 3 month and 12 month trends have now entered unremarkable territory.
Health & personal care stores continue to lead this sector, with 4.7% year-over-year retail sales growth in July. This is way ahead of the overall retail average, but still down from their 8.0% year-to-date increase for the first 6 months of the year.
At the other extreme, specialty food stores are struggling, with sales down 0.2% year-to-date and down 2.6% in July alone.
Supermarkets & other grocery stores had a modest but "okay" 1.4% retail sales gain in July, and are now up just 0.9% year-to-date in 2016.
Store Merchandise
The Store Merchandise sector also cooled in July, recording a 3.1% retail sales increase after being up 5.4% in the first 6 months of the year. The 3 month trend has weakened considerably in the last few months. The underlying 12 month trend has now flattened out and is poised to soften further.
Many retailer types had a downturn in sales growth in July, including general merchandise stores, furniture stores, home furnishings stores, electronics & appliance stores, and building material & garden equipment/supplies dealers. Clothing stores and shoe stores led the sector with 5.2% and 8.0% retail sales gains respectively in July, but both these results were below their previous year-to-date gains.
Automotive & Related
After clocking in industry high retail sales gains for about the last 2 years, new car dealer sales appeared to fall off a cliff in July. Sales for the month declined 1.4% year-over-year, compared to a gain of 10.1% in the first half of 2016.
At the same time, gasoline stations, whose sales had been in recovery mode, experienced a setback. July retail sales at gas stations were down 8.8%.
At one time, it was the Automotive & Related sector that was driving (apologies) sales growth in the Canadian retail industry. Now it's becoming the other way around.
To read the full article, click here.
Source: Ed Strapagiel, Consultant
Latest U.S. Economic News
Drop in U.S. Consumer Spending Clouds Fed Rate Hike Outlook
U.S. consumer spending unexpectedly fell in August for the first time in seven months while inflation showed signs of accelerating, mixed signals that could keep the Federal Reserve cautious about raising interest rates.
The Commerce Department said last Friday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, fell 0.1% last month after accounting for inflation.
Analysts polled by Reuters had expected a 0.1% gain.
Yields on U.S. government debt fell after the data and the dollar weakened against a basket of currencies, signalling investor doubts about the prospect of a near-term Fed rate increase. U.S. stock futures trimmed gains.
Fed Chair Janet Yellen said last week she expected the U.S. central bank would raise rates once this year to keep the economy from eventually overheating.
Prices for fed funds futures suggest investors see almost no chance of a hike at the Fed’s next policy meeting in early November and roughly even odds of an increase at its mid-December meeting, according to CME Group.
Consumer spending, which has been robust in recent months, partially offset the drag from weak business investment and falling inventories in the second quarter when the U.S. economy expanded at a lackluster 1.4% annual rate.
While overall economic growth could still accelerate in the current quarter even with August’s slight decline in consumer spending, households appear to be spending with less gusto than in prior months.
Consumer spending has been driven by a tightening labour market, which Yellen said this week might be lifting incomes.
Personal income rose 0.2% in August, in line with expectations.
Consumer prices also rose about as much expected in August, with the price index excluding food and energy increasing 0.2% from the prior month. That left inflation excluding food and energy at 1.7% in the 12 months through August, up a tenth of a percentage point from the prior month and closer to the Fed’s 2% inflation target.
Source: Reuters
U.S. Economy Less Sluggish in Second Quarter; Companies Investing More
U.S. economic growth was less sluggish than previously thought in the second quarter as exports grew more than imports and businesses raised their investments, hopeful signs for the economic outlook.
GDP expanded at a 1.4% annual rate, the Commerce Department said last Thursday in its third estimate of GDP. That was up from the 1.1% rate it reported last month and higher than analysts’ expectations.
The revision incorporated data that showed businesses cut investments in buildings and equipment less than the government previously estimated, while they sank more money into research and development.
That left growth in overall business investment at a 1% annual rate, its first gain since the third quarter, and suggests the worst of an energy-sector-led slump in business investment might be over.
The slump, fuelled by a sharp drop in oil prices that hit America’s energy industry, has worried policy makers at the Federal Reserve because less investment could hurt economic growth over the longer term.
The U.S. economy has struggled to regain momentum since output started slowing in the last six months of 2015 and the overall growth rate for GDP in the second quarter remained below historically normal rates. That could give grist to Republican Presidential candidate Donald Trump’s argument that the economy has sickened under the Obama administration.
At the same time, consumer spending, which makes up more than two-thirds of U.S. economic activity, was robust in the second quarter, rising at a 4.3% annual rate, while growth in exports outstripped that of imports enough to boost GDP by the most since the third quarter of 2014.
But companies continued to run down their inventories aggressively, reducing stocks by $50.2-billion and subtracting from GDP growth, while home building also sank.
The GDP data is unlikely to have much impact on the near-term outlook for monetary policy although it could make Fed policy makers more confident the U.S. economy is resisting weaker growth abroad.
Federal Reserve Chair Janet Yellen repeated last week that Fed policy makers expect to raise interest rates by the end of the year because they worry that gathering steam in the U.S. labour market could fuel inflation.
New claims for unemployment benefits rose slightly last week but remained at levels consistent with a healthy job market, according to a separate report from the Labor Department.
The government also reported that after-tax corporate profits fell at a 0.6% rate in the second quarter, a smaller drop than initially estimated.
With profits declining, an alternative measure of growth, gross domestic income, or GDI, dropped at a 0.2% rate in the second quarter. GDI measures the economy’s performance from the income side.
Source: Reuters
U.S. Pending Home Sales Drop as Inventory Remains Weak
Contracts to buy previously owned U.S. homes dropped in August to their lowest level since January, a warning sign for the economy as the industry struggles to boost supply.
The National Association of Realtors (NAR) reported last Thursday that its pending home sales index, based on contracts signed last month, decreased 2.4% to 108.5 following a jump in July. The index was 0.2% lower than in August 2015.
Economists polled by Reuters had forecast pending home sales would be unchanged last month.
Contracts were up 1.3% in the Northeast but down in the Midwest, West and South last month. Pending home sales for July were also revised marginally lower to a reading of 111.2.
Housing inventory has declined for 15 straight months on a year-on-year basis, the NAR said. This dearth in supply has periodically dampened sales, although the overall housing market has continued to strengthen amid historically low mortgage rates and a robust labour market.
Source: Reuters
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