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Volume 13, Issue 20, May 30, 2013

Inside This Issue:
• Register Soon to Attend Night at the Races – June 12
• CHHMA Scholarship Program
• CHHMA Members Get Up Close with Home Hardware’s Terry Davis
• Fun Day Had at the 2013 Quebec Golf Classic
• BÉLANGER Announces New Appointments
• McMunn & Yates to Acquire McDiarmid Lumber Stores
• Sears Canada Posts Another Loss in the First Quarter
• Sales at Target Canada Better Than Expected in First Quarter but Overall Profits Down
• Home Depot Reports Higher Than Expected First Quarter Results
• Lowe’s Reports Weaker Than Expected First Quarter Profit
• Walmart First Quarter Profit Misses Expectations
• Bank of Canada Holds 1% Rate But Still Signalling Higher Rates Down the Road
• Consumer Confidence Rises in May
• Almost Half of Canadians Still Intend to Buy a Property
• Retail Sales Flat in March as Gasoline Prices Fall
• Canada’s Inflation Rate Falls to Its Lowest Level Since 2009

Association News

Register Soon to Attend Night at the Races – June 12
For the past 16 years, CHHMA members have used the Night at the Races as an opportunity to team build with their employees, thank their employees for a job well done and engage with customers and their spouses at a fun night of dining and thoroughbred horse racing at the Woodbine Racetrack in Toronto. The CHHMA in-house betting competition also offers an opportunity for attendees to showcase their handicapping (guessing) skills and win some prizes too.

Get your team together, invite your customers and enjoy a great evening in Favourites Dining Room, which offers a spectacular view of the track, at CHHMA's Night at the Races.
Click here for further details and to register.

CHHMA Scholarship Program     
The CHHMA is once again pleased to be able to offer the opportunity for children of employees of our member companies to apply for a scholarship to help offset the cost of post-secondary education. The Association recognizes the importance of education and therefore encourages children of our member companies to attend University or College. Five or six scholarships are awarded each year. Successful candidates receive $1,000 CDN per year for the first two years of study leading to a diploma or degree from an accredited community college or university.

The scholarship program is available to the dependents of any current full-time employees of the CHHMA or member companies. The program is only offered to Canadian companies or divisions of companies based in Canada which are members of the CHHMA. The member company must remain a member in good standing in order for the student to qualify for the second year of the scholarship. The student's parent or guardian must be an active full-time employee with at least one year seniority with the CHHMA or member company as of July 15th in the year of application. Applicants must be preparing to enter an accredited community college or university in the fall term, and attain a minimum average of 75% in the last year of high school (or CEGEP). The decision of the Selection Committee and the CHHMA is final and not open to appeals. The CHHMA reserves the right to withdraw a scholarship should the student's parent(s) or guardian(s) voluntarily leave the employment of the CHHMA or member company, or if employment is terminated for just cause prior to the start of the school year, or if the company terminates its membership in the Association.

Complete details and application forms can be found at

The CHHMA must receive applications from potential candidates no later than July 15th.

Since 2001, the CHHMA has awarded $130,000 towards scholarships and some 65 young people have benefited from the scholarship program.

CHHMA Members Get Up Close with Home Hardware’s Terry Davis        
On May 15th, Terry Davis, Executive Vice-President & Chief Operating Officer of Home Hardware Stores Limited was the guest speaker at our latest CHHMA breakfast meeting at the International Centre in Mississauga.

For those who didn’t make it out to the breakfast meeting, you missed a very insightful look into the history of Home Hardware and their corporate strategies from the inception of the company to present day.

Terry reviewed the founding business model which carried the organization through several decades and then key milestones which initiated new plans to be developed to move the company forward and expand its operations.

Terry discussed Home Hardware’s most recent business plan “Earnings & Expectations” and what the company will be focusing on over the next few years. He concluded by speaking about his experience on Undercover Boss.

We thank Mr. Davis for taking the time to talk so openly with our members and on his behalf, a donation will be made to Terry’s charity.


Fun Day Had at the 2013 Quebec Golf Classic
The 38th Annual CHHMA Golf Classic took place last Thursday, May 23, at Le Club de golf Le Fontainebleau in Blainville, Quebec.

Although it rained for a few holes, the rain soon stopped and the sun even broke out to make for a very enjoyable day on the course.

There was an excellent turn-out from the industry as always with CHHMA members spending time with colleagues and customers.

Beverages and a fine dinner followed the golfing and a number of lucky attendees walked off with some great prizes to close off the evening.

We would like to thank the members of the Quebec Committee for their hard work and organization in making this event a success: Christine Papineau, Robert Begin, Alain Bourdages, Mark Gagliardi, Richard Guindon, Richard Paradis, Pierre Vachon and Richard Lepine who took photos on the course.

Finally, we would also like to thank all the corporate sponsors who provide their support and contribute to the success of the event each year.
To see a full list of sponsors and photos from the day, please go to:  

Member News
BÉLANGER Announces New Appointments

On May 29th, BÉLANGER UPT announced the following appointments: Martin Frigon to Territory Manager, Quebec. In addition to continuing his regular activities, Martin will oversee the ProStar Marketing sales team. Also, Josée Coutu to Internal Sales Coordinator, Retail. “With her great knowledge and vast experience acquired at both the head office and field level, she will be the main link between the agency and the internal resources at Bélanger”, said Marc Gingras, Vice President of Sales and Marketing.

“With the experience and professionalism of the nominated individuals, this administrative reorganization provides Bélanger an additional striking force to initiate the strategic repositioning plan of our organization,” commented Jean Bérubé, Executive Vice President and General Manager of Bélanger UPT.

With over 45 years of existence, BÉLANGER UPT is a Canadian leader in the design and manufacture of faucets and plumbing accessories. Renowned for its excellent customer service, its enviable reputation has been built on the quality and durability of its products. BÉLANGER has three North American and Asian manufacturing plants, and markets its products under the BÉLANGER, ESSENTIAL, PLUMBPAK, QUIK and H2FLO brands.  

Industry News
McMunn & Yates to Acquire McDiarmid Lumber Stores
On Monday, it was reported by the Winnipeg Free Press that ILDC member McMunn & Yates Building Supplies has agreed to acquire most of the assets of the struggling McDiarmid Lumber Ltd.

The agreement includes all of McDiarmid's store locations except the Nairn Avenue location in Winnipeg and stores in Yorkton, Sask., and Sioux Lookout, Ont.

McMunn & Yates has also agreed to buy McDiarmid's contracting and farm and commercial divisions as well as Superior Truss. Its ready-to-move home division is not part of the agreement.

The deal is said to valued at around $30 million.

McDiarmid has been struggling for the past couple of years. The business challenges prompted a messy family dispute between original owner Tom Matthews and his son-in-law Vince Ryz, who had been running the business for the past five years.

The dispute ended up in court with family members suing each other. Ryz stepped down earlier this year and Matthews injected some additional capital and installed restructuring specialist Richard Hutchings to run the business and negotiate a deal.

Hutchings said his prime marching order was the preservation of as many jobs as possible.

"I think we've done a fair job salvaging most of the jobs," Hutchings said. "We had lots of offers. McMunn & Yates was not necessarily the top price but it represented the best opportunity for our employees. It will get those locations back on track."

McDiarmid has about 400 employees.

Jason Yates, the CEO of McMunn & Yates, was unavailable for comment. The deal is scheduled to close in early June.

McMunn & Yates, which used to be called McMunn & Yates Do-It Centres, started with one store in Dauphin. Through acquisitions and new store construction it now has 16 locations, mostly in small-town Manitoba - from Thompson and Flin Flon in the north to Roblin and Russell in western Manitoba to Steinbach in the south. It also has stores in Yorkton and Kamsack, Sask., and a store in Charleswood it acquired in 1988.

While McMunn & Yates has been growing steadily, McDiarmid had been heading in the other direction. McDiarmid closed stores in Brandon, Portage la Prairie and Prince Albert, Sask., last year as well as a distribution centre in Elie and a ready-to-move homes distribution operation in North Battleford, Sask. Its Western Window and Door division was shut down in March.

It has scheduled an auction of surplus trucks and other equipment from its discontinued operations for early June.

Hutchings said McDiarmid will continue to operate the ready-to-move homes division that has sites in Headingley and Yorkton, Sask., and is in negotiation with individual interested parties for the stores in Yorkton, Sioux Lookout and Nairn Avenue. Matthews owns the Nairn location, which will continue as a clearance centre.
A statement of claim was filed in Manitoba court last fall by Matthews against Ryz. In dispute was who actually controlled the company; Ryz, who orchestrated a disputed share issue last fall, or Matthews. Ryz hung on to his posts for a couple of months after being publicly lambasted by his father-in-law in a sworn affidavit. He stepped down earlier this year.

Hutchings said the contracting, farm and commercial and truss divisions have all produced double-digit growth since new management was put in place. However, McDiarmid's retail operations continued to decline this year. Hutchings said poor spring weather was at least partially to blame.

"But I think that's ready to pick up," Hutchings said.

Source: Winnipeg Free Press

Sears Canada Posts Another Loss in the First Quarter
On May 22, Sears Canada Inc. reported that it posted a $31.2 million loss as well as lower revenue for its first quarter but said it its transformation program is showing positive results that have improved margins and boosted some categories.

Calvin McDonald, Sear Canada’s president and chief executive officer, said the company had growth in its apparel and accessories segment for the second quarter in a row – the first time that has happened in more than six years.

In addition, there was an improvement in the bed and bath category but Sears had more trouble in its “hard goods” categories – usually an area of comparative strength for the company.

“Our major appliances business maintained market share but experienced sales declines, as did our furniture and mattress businesses all of which suffered in a very tough quarter of trading because of unfavourable economic conditions and low consumer confidence,” McDonald said.

“The unseasonable cool spring in most parts of the country had an adverse impact on sales of outdoor power equipment, patio, and other seasonal lines.”

Same-store sales fell by 2.6% while total revenue for the 13-weeks ended May 4, 2013, fell 6.6% to $867.1 million from $928.0 million during the same period last year. The company has seen seven straight years of falling revenue.

The net loss for the quarter amounted to 31 cents per share and contrasted with a year-earlier profit of $93.1 million or 91 cents per share. Excluding unusual items, however, Sears would have had a loss of $44.9 million in last year’s first quarter.

The national retailer’s bottom line was boosted a year earlier by an unusual gain due to the termination of leases for three stores, which have been closed.

“We are continuing to make progress in our transformation, and we believe the growth in apparel and accessories is an indicator that we are on the right track,” McDonald said. “At the same time our rate management initiatives have positively impacted gross margin by 50 basis points, while our focus on controlling costs has reduced expenses by 7.9 per cent compared to the same period last year.
Factoring out the gains from the return of the three leases to the landlord last year, we are seeing an overall improvement in our bottom line for the quarter as compared to the first quarter last year.”

Source: Sears Canada, The Canadian Press

Sales at Target Canada Better Than Expected in First Quarter but Overall Profits Down 
Sales at Target Corp.’s new Canadian stores were better than expected during the first quarter, even as the department store chain reported its overall profits dropped 26%.

“Whenever we open a new store in the U.S., there is a rush of traffic and sales as curious guests shop it for the first time,” chief financial officer John Mulligan told investors during a conference call last week.

“But the rush in Canada exceeded our expectations.”  

The results at Target’s Canadian operations were dominated by start-up expenses, but the company said they should improve overall earnings by the fourth quarter.

The Canadian stores generated $86 million (U.S.) in sales even though they were, on average, open for just over half of the quarter which ended May 4, 2013.

Sales were strongest in home and clothing, categories the company said that shoppers tend to hit on their first trip to a Target.

In March, Target opened its first 24 Canadian stores in southern Ontario — the company’s first foray outside the U.S.

“We experienced an unexpectedly strong surge in sales as guests were eager to see their newly opened Target store,” said Gregg Steinhafel, Target’s chairman, president and chief executive officer.

Two weeks ago, the chain opened its second wave of 24 Canadian stores in Alberta, Manitoba and British Columbia.

Target plans to open 20 more stores in Canada later this quarter. If all goes according to plan, by the end of the year Target will have opened a total of 124 stores.

“This means we expect to open more Target stores in our first year in Canada than we opened in our first 10 years in the United States,” said Mr. Steinhafel.

Despite the excitement in Canada, cool temperatures and financial pressures curbed customers’ appetites for spending, and the company’s overall operations saw first-quarter profits drop 26%.

The Minneapolis-based company also cut its annual profit outlook.

Target is the latest in a string of companies that commented how weather and other pressures on lower- to middle-income shoppers hurt business in the first couple months of the year.

This year, shoppers held off buying spring merchandise such as clothing, fans and garden supplies as a chilly start to the season left them little reason to splurge.

Still, Target, whose sales growth has been uneven since the recession, remains confident in its strategies to attract shoppers.

Target has reached out to customers with two big growth initiatives. It has been offering a larger selection of food and also a program, started in 2010, that gives shoppers a 5% discount when they pay with Target-branded credit and debit cards.

At the same time, Target continues to team up with new designers for limited-time partnerships. This month, Target announced its latest designer collaboration, with Phillip Lim. The collection is due out in September.

Last year, Target expanded into urban markets using smaller versions of its big-box stores in Seattle, Los Angeles and Chicago.

“Target’s first- quarter earnings were below expectations as a result of softer-than-expected sales, particularly in apparel and other seasonal and weather-sensitive categories,” Mr. Steinhafel said in a statement.

“While we are disappointed in our first-quarter performance, we remain confident in our strategy, and we continue to invest in initiatives, including Canada, our digital channels, and CityTarget, that will drive Target’s long-term growth.”

Target earned $498 million, or 77 cents per share, in the first quarter ended on May 4, compared with a profit of $697 million, or $1.04 per share, a year earlier.

Including the effects from opening Canadian stores, but excluding losses related to the early retirement of debt and gains from the sale of its credit card business, Target earned 82 cents per share.

Total sales rose 1% to $16.71 billion, while analysts expected $16.78 billion in revenue.

The number of transactions in stores open at least a year fell 1.9%. Shoppers spent more overall and bought more items, but the selling price per unit was down, suggesting lower-priced items like groceries were selling well.

Also, more shoppers took advantage of the 5% discount offered to Target's REDcard holders. It said 17.1% of sales in its stores were paid for with REDcard credit and debit cards, versus 11.6% a year ago.

Target now expects adjusted earnings of $4.70 to $4.90 per share this year, down from its April forecast of $4.85 to $5.05.

Source: The Canadian Press, The Associated Press

Home Depot Reports Higher Than Expected First Quarter Results

The Home Depot, Inc. reported higher-than-expected first quarter results and raised its sales and profit outlook for the year last week as the world's largest home improvement chain benefited from a growing U.S. housing market recovery.

The news pushed the retailer's shares up as much as 3.4% to an all-time high and gave fresh evidence that theU.S. housing market was improving after years of weakness.

For the first time since 2008, sales to contractors and professional customers grew at a faster pace than those to regular homeowners and other shoppers, Chief Executive Officer Frank Blake said on a conference call.

"This quarter's outperformance from the pro segment is a positive sign" of a housing recovery, Blake said.

A bubble in the U.S. housing market was at the core of the 2007-2009 financial crisis. During the downturn, Home Depot's sales at established stores fell more than 20% in such markets as Florida and California. In recent quarters, the company has gotten a boost as housing markets have rebounded in regions where it has a heavy presence.

"In the first quarter, we saw less favorable weather compared to last year, but we continue to see benefit from a recovering housing market that drove a stronger-than-expected start to the year for our business," Blake said.

Recent U.S. government data showed permits for single-family homes rose 3% to 617,000 in April, the highest since May 2008, while newly issued building permits, a gauge of future construction, rose 14.3%.

Despite cooler-than-usual weather in many parts of the U.S. at the start of the spring selling season, Home Depot's sales rose 7.4 % to $19.12 billion in the first quarter ended on May 5, 2013. That topped the analysts' average estimate of $18.68 billion.

Better pricing and customer service have helped Home Depot take market share from smaller rival Lowe's. The industry leader has also gained from tailoring its marketing to local areas, centralizing distribution centers and shifting more workers to jobs where they serve customers directly.

Same-store sales rose 4.3%, including a 4.8% increase in the United States.

At the end of 2012, Home Depot had 19% of the U.S. home improvement retail market and Lowe's had 16.7%, data from Euromonitor International showed.

Net income in the first quarter rose to $1.2 billion, or 83 cents a share, from $1 billion, or 68 cents a share, a year earlier. Analysts on average had forecast a profit of 77 cents a share, according to Thomson Reuters.

For the year, the company now expects earnings of $3.52 a share, up from its prior outlook of $3.37. It forecast a sales increase of about 2.8%, up from previous expectations of a 2% rise.

Source: Home Depot, Reuters

Lowe’s Reports Weaker Than Expected First Quarter Profit
Lowe’s Companies, Inc. reported a weaker-than-expected quarterly profit last week, hurt by colder than usual weather at the start of the spring selling season and strong competition from rival Home Depot Inc.

The results contrasted sharply with those of Home Depot and signalled that Lowe’s, the world’s #2 home improvement chain, was still struggling to narrow the performance gap with the industry leader.

Lowe’s sales fell 0.5% to $13.09 billion in the first quarter ended on May 3, 2013, missing the analysts’ average estimate of $13.45 billion.

Same-store sales dipped 0.7%. It was the 16th straight quarter that Lowe’s posted weaker same-store sales than Home Depot.

“Results for indoor categories were solid for the quarter, a testament to the team’s continued focus on improving our core business through cross-functional collaboration and consistent execution in stores and across other selling channels,” commented Robert A. Niblock, Lowe’s chairman, president and CEO.

“Cooler than normal temperatures and greater precipitation resulted in a delayed spring selling season which impacted our results in exterior categories,” Niblock added. “While overall performance in the month of March was particularly soft, April improved significantly and we have maintained that positive momentum through the first few weeks of May.”

Lowe’s stocked more lawn and garden products than Home Depot and therefore suffered more from the unfavourable weather, analysts said. At the same time, Home Depot had more of a presence in California, where housing has made a strong comeback.

While Lowe’s has been working to improve product selection and customer service, it has yet to turn around its business.

As part of its makeover, the company has started offering everyday low prices and products targeted to specific geographic markets. It made its stores more appealing with improved signs, television displays that stream videos on how-to-do projects, and lower racks to make items easier to reach.

Lowe’s has also increased its assortment of products available online and started, a site that allows shoppers to save their room dimensions, create a shopping list and set reminders to buy items such as air filters and batteries for smoke alarms.

Lowe’s, which was also slower than Home Depot to cut costs in the years after the housing collapse, said its first-quarter net earnings rose 2.5% to $540 million, or 49 cents a share, from $527 million, or 43 cents a share, a year earlier.

Analysts on average expected a profit of 51 cents a share, according to Reuters.

Source: Lowe’s, Reuters

Walmart First Quarter Profit Misses Expectations    
Wal-Mart Stores Inc. ‘s quarterly profit just missed Wall Street expectations last week, with sales down 1.4% at its Walmart U.S. stores open at least a year.

The world’s largest retailer said U.S. sales suffered from a delay in income tax refund checks, cool weather, less grocery inflation than expected, and the payroll tax increase.

Wal-Mart earned $3.78 billion, or $1.14 per share, in the first quarter ended on April 30, up from $3.74 billion, or $1.09 per share, a year earlier.

The analysts’ average forecast was $1.15 per share, according to Thomson Reuters. In February, Wal-Mart had forecast a profit of $1.11 to $1.16 per share.

First-quarter revenue rose 1% to $114.19 billion.

Same-store sales at Walmart U.S. fell 1.4% as mentioned, while the company had earlier expected such sales to be about flat. Visits to Walmart U.S. stores open at least a year fell 1.8%, while the average amount spent per visit rose 0.4%.

Walmart International grew net sales 2.9% to $33.0 billion during the quarter and gained market share in a majority of the countries in which they operate.

Wal-Mart forecast earnings of $1.22 to $1.27 per share for the current second quarter, up from $1.18 a year earlier.

The company said it expected second-quarter same-store sales, excluding those of fuel, to be flat to up 2% at Walmart U.S. and up 1% to 3% at its Sam’s Club warehouse store chain.

Source: Walmart, Reuters

Economic News

Bank of Canada Holds 1% Rate But Still Signalling Higher Rates Down the Road  

On Wednesday, Bank of Canada policy makers changed little at their last meeting under Governor Mark Carney, as they opted to leave the benchmark interest rate at 1% for the 32nd consecutive meeting.
The central bank also repeated that its next interest-rate move – whenever that may be – most likely will be to take borrowing costs higher, a nod to concerns that ultra-low interest rates threaten financial stability by creating the conditions for runaway inflation and asset-price bubbles.

Mr. Carney steps down on Saturday to take up his new job heading the Bank of England on July 1. Stephen Poloz, who has been leading Export Development Canada, replaces Mr. Carney has Governor of the Bank of Canada.

Meanwhile, Canada’s economy is growing faster than policy makers had expected, the central bank acknowledged in their statement Wednesday.

That’s a switch, as the Bank of Canada’s tendency lately has been to overestimate the economy’s strength. According to Goldman Sachs, Canada’s GDP likely grew at an annual rate of 2.5% in the first quarter, compared with the central bank’s April estimate of 1.5%.

Even with faster economic growth, policy makers believe Canada’s economy has considerable room to run. For months, output has been well below what the economy is capable of producing without triggering inflation.

As a result of that weakness, there is little reason to worry about inflation over the short term. The consumer price index is “slightly weaker” than forecast, the Bank of Canada said, giving officials reason to leave the benchmark interest rate unchanged. The central bank’s mandate is to keep prices advancing at a pace of about 2% a year.

“With continued slack in the Canadian economy, the muted outlook for inflation, and the constructive evolution of imbalances in the household sector, the considerable monetary policy stimulus currently in the place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required,” the Bank of Canada said.

Bank of Canada data published this week show household credit posted its slowest annual growth in 17 years in April. “The bank continues to expect that the household debt-to-income ratio will stabilize near current levels,” policy makers reiterated Wednesday.
An easing of Canadians’ debt burden is good for financial stability, as it reduces the risks of a wave of foreclosures and bankruptcies. But it comes as a cost to economic growth.

The debt build of recent years fuelled domestic spending that offset weak exports and lacklustre business investment. The central bank is counting on investment on international demand to take over from households. However, the central bank’s ability to influence either is limited.

Over the next couple of years, “consumer spending is expected to grow at a moderate pace, business investment to grow solidly, and residential investment to decline for historically high levels,” the Bank of Canada said. “Exports are expected to recover, but to be restrained by subdued foreign demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar.”

The central bank noted that Japan’s economy is “beginning to respond to significant policy stimulus.” However, Europe remains in recession; the U.S. recovery is being “partially offset” by government budget restraint; and China’s economic growth is easing, “weighing somewhat” on commodity prices, the Bank of Canada said.

Those factors suggest only “modest” global economic growth in 2013, the central bank said.

Source: The Globe & Mail

Consumer Confidence Rises in May
Canadians are feeling a little more positive about the economy and their personal prospects, a new consumer confidence survey from the Conference Board suggests.

The think-tank's monthly index rose 5.1% in May, more than offsetting the previous month's decline, as respondents said they were less pessimistic about the job market and saw the potential for improvement in their own personal finances.

While a good result, the index reading of 80.7 remains well below its base value of 100.

That indicates "confidence is still low by historical standards," said the Conference Board in an analysis of the results.

"Regional values also indicate that this month's increase was not evenly distributed. Confidence increased in Central Canada, offsetting declines registered in the West. Confidence in Atlantic Canada was little changed."

Responses on the jobs question was less negative, but not necessarily more positive, giving a confusing picture, said the report.

While just 16% of respondents said they expected more jobs to be available six months from now, a half-point drop from April, there were fewer respondents in May that said job prospects would worsen -- 22.9% compared to 27.2 for the previous month.

Still, the balance of opinion on jobs remained negative, only less so.

As well, Canadians were marginally more positive about their future finances, with more saying they expected their personal situation to improve and fewer saying they expected a deterioration in their finances.

Meanwhile, Americans’ confidence in the economy jumped in May to a five-year high, lifted by a better outlook for hiring and business conditions. The increase suggests consumers may keep boosting economic growth this year.

The Conference Board said Tuesday that its consumer confidence index rose in May to 76.2. That’s up from a reading of 69.0 in April and the highest since February 2008.

The jump in confidence followed a separate report showing the housing recovery is strengthening.

Home prices jumped 10.9 per cent in March compared with a year ago, the most since April 2006, according to the Standard & Poor’s/Case Shiller 20-city index. All 20 cities showed year-over-year gains.

Consumers’ confidence in the economy is watched closely because their spending accounts for about 70 per cent of U.S. economic activity.

Conference Board economist Lynn Franco said Americans are more optimistic after worrying earlier in the year about higher taxes and federal spending cuts.

Still, higher home prices and stocks gains are making Americans feel wealthier. That could offset some of the pinch from the tax increase and keep consumers spending.

And the job market has improved steadily over the past six months. The economy has added an average of 208,000 a month since November. That’s well above the monthly average of 138,000 during the previous six months.

The unemployment has fallen to a four-year low of 7.5%. Some of the decrease is because many people have given up looking for work. The government counts people as unemployed only if they are actively searching for a job.

The overall U.S. economy grew at an annual rate of 2.5% in the January-March quarter, up from a rate of just 0.4% in the October-December quarter. The fastest expansion in consumer spending in more than two years drove economic growth in the first quarter.
Many economists expect growth is slowing slightly in the current April-June quarter to a rate of between 2% and 2.5%. But there is hope among some economists that growth will strengthen in the second half of this year, boosted by the gains in housing and employment.

Source: The Canadian Press, The Associated Press

Almost Half of Canadians Still Intend to Buy a Property                

A new report from last week suggests nearly half of Canadian homeowners intend to buy a property in the next five years, despite a cooling off in the housing market.

The BMO Housing Confidence Report says the 48% figure is mostly unchanged from late 2012, suggesting continued confidence in the housing market.

Among major cities, the report found a five-point gain in buying intentions in Vancouver while Calgary was down by 13 points.

Buying intentions in the Greater Toronto Area and Montreal have held steady, while Atlantic Canada has seen a 15% jump in buying intentions.

The bank‘s report further suggests close to half of all homeowners under 40 intend to purchase a larger home within the next five years.

Ten percent of homeowners plan to buy a recreational property in the next five years, down two points from last fall.

Here are some other findings: 16% of those polled plan to buy a larger home as their primary residence while 21% plan to buy a smaller home; 15% plan to move within their current neighbourhood while 12% intend to move to a more expensive one and 7% to a less expensive one; 10% plan to buy a recreation property like a cottage; 10% plan to buy an income property to rent to tenants and
6% intend to buy an investment property to flip.

Among those surveyed, 7% expect house prices will fall over the next year, 32% said they will stay the same and 53% said they expect them to rise. The remainder said they did not know.

The BMO survey also asked homeowners if they have cut back their spending or dipped into their savings to make their monthly mortgage payments. It found that the number of people who needed to do so has fallen 10 points from last fall to 45 per cent this spring.

“The relative strength of the Canadian housing market continues to bolster homeowners confidence, said Martin Nel, BMO‘s vice president of lending and investments.

The BMO report by Pollara was based on online interviews with a random sample of 1,008 Canadian homeowners between Feb. 21-27.

Source: The Canadian Press

Retail Sales Flat in March as Gasoline Prices Fall

Statistics Canada reported on May 22nd that retail sales were flat in March, holding at $39.5 billion. After removing the effects of price changes, particularly lower gasoline prices, retail sales in volume terms rose 0.7%. Year-over-year, retail sales are up 1.1% from March 2012.

Higher sales were reported in 6 of 11 subsectors, representing 47% of total retail sales.

The largest increase in sales among all subsectors was a 3.1% rise at clothing and clothing accessories stores. Higher sales at clothing stores led the gain, rising 3.5%, the third increase in four months. Sales at shoe stores (+0.9%) advanced for a fourth straight month. Following three consecutive monthly declines, gains were reported by jewellery, luggage and leather goods stores (+2.3%).

Sales at motor vehicle and parts dealers rose 0.7%, a third consecutive monthly gain. Higher receipts at other motor vehicle dealers (+6.1%) and at new car dealers (+0.3%) accounted for most of the gain. The advance in sales in the "other motor vehicle dealers" industry did not offset the decline in February. This industry includes retailers of recreational vehicles, motorcycles and boats.

Furniture and home furnishings stores posted a 0.3% monthly increase in sales (+1.7% y/y), reflecting stronger sales at furniture stores (+1.2%). Home furnishings stores (-1.0%) declined for a fourth month in a row.

Sales at building material and garden equipment and supplies dealers edged up 0.1%. Sales in this subsector have been relatively flat since the middle of 2012 and are down 2.9% year-over-year.

Gasoline station sales decreased 1.3% in March, mainly reflecting lower prices at the pump.

Following two consecutive monthly gains, sales at general merchandise stores declined 0.6% in March but are still up 0.3% from a year ago. Weaker sales were reported by department stores (-0.6%) and other general merchandise stores (-0.6%).

The 0.9% decrease in receipts at electronics and appliance stores did not offset the sales gain in February.

Retail sales rose in six provinces in March. Ontario (+0.4%) reported the largest increase in dollar terms and a third consecutive monthly sales gain. This increase was in part the result of higher sales at new car dealers.

The 0.9% rise in sales in British Columbia was led by gains at motor vehicle and parts dealers.

Receipts in Quebec (+0.4%) and New Brunswick (+1.2%) both increased for a third straight month.

Retail sales in Nova Scotia (+0.6%) increased in March after three consecutive monthly declines.

Following two consecutive monthly gains, retailers in Alberta registered a 1.8% sales decline.

Retail sales in Saskatchewan (-1.7%) fell for a fourth straight month in March, with widespread declines across subsectors.

Source: Statistics Canada

Canada’s Inflation Rate Falls to Its Lowest Level Since 2009
Canada’s annual inflation rate in April slowed to 0.4% on a sharp decline in the price of gasoline and lower prices for passenger vehicles.

That’s the lowest level since October 2009 and was below most economists’ expectations.

Statistics Canada said on May 17th that its Consumer Price Index (CPI) rose 0.4% in the 12 months to April, following a 1.0% increase in March. Declining gasoline prices were largely responsible for the 0.6 percentage point difference in the 12-month change in the CPI. Price decreases for the purchase of passenger vehicles were also a factor.

Gasoline prices decreased 6.0% on a year-over-year basis in April, after falling 0.3% in March. The decrease in April was the largest year-over-year decline in gasoline prices since October 2009.

Excluding gasoline, the CPI rose 0.8% in the 12 months to April, following a 1.1% increase in March.

The shelter and food components were the main upward contributors to the rise in the CPI, while the transportation component was the main downward contributor.

Shelter costs increased 1.3% in the 12 months to April, following a 1.1% rise in March. Electricity prices and rent advanced year over year, while mortgage interest cost decreased 4.3%.

Food prices increased 1.5% on a year-over-year basis in April, after increasing 1.8% in March. Consumers paid more for food purchased from stores, as prices for meat rose 3.2%. In contrast, prices for sugar and confectionery declined 2.8%.

Consumers paid 1.2% more for food purchased from restaurants in the 12 months to April, following a 2.2% increase in March. The smaller increase in April compared with March was largely attributable to price declines in British Columbia.

Transportation costs declined 2.1% in the 12 months to April, after posting no change the previous month. In addition to price decreases for gasoline, prices for the purchase of passenger vehicles declined 0.7% year over year in April, after rising 0.8% in March.

Consumer prices rose in eight provinces in the 12 months to April. The exceptions were New Brunswick and British Columbia, where consumer prices declined. The largest increases were registered in Prince Edward Island and Manitoba.

The decline in gasoline prices was a factor in the year-over-year change in all provincial CPIs. The largest gasoline price decreases were posted in Newfoundland and Labrador and Nova Scotia (both -9.3%), while the smallest were recorded in Manitoba (-0.4%) and Prince Edward Island (-2.7%).

On April 1, 2013, the Harmonized Sales Tax came into effect in Prince Edward Island, while British Columbia returned to the Provincial Sales Tax and the Goods and Services Tax.

In Prince Edward Island, consumer prices rose 1.8% in the 12 months to April, after registering a 1.2% advance in March. Prince Edward Island posted the largest year-over-year price increase among the provinces for clothing.

Prices in British Columbia fell 0.8% in the 12 months to April, after rising 0.5% in March. Consumers paid 4.3% less for food purchased from restaurants.

Consumer prices in Manitoba rose 1.8% on a year-over-year basis in April, following a 2.3% increase in March. Manitoba had the smallest year-over-year decrease in gasoline prices among the provinces.

In New Brunswick, consumer prices decreased 0.2% year over year in April, following a 0.8% increase the previous month. Gasoline prices fell 8.6% year over year in April. In addition, prices for clothing decreased 2.8% in the 12 months to April, after increasing 4.4% in March.

On a seasonally adjusted monthly basis, the CPI decreased 0.4% in April, after posting no change in March. The decrease in April was the largest decline since October 2008.

Of the eight major components, five posted decreases in April. The seasonally adjusted index for transportation decreased 1.1% in April, following a 1.5% decrease in March. The food index decreased 0.4% in April, while the shelter index increased 0.2%.

The Bank of Canada's core index rose 1.1% in the 12 months to April, following a 1.4% increase in March. On a monthly basis, the seasonally adjusted core index posted no change in April, after rising 0.2% in March.

Source: Statistics Canada

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CHHMA Night at the Races
Wednesday, June 12, 2013
Woodbine Racetrack, Toronto, Ontario

Industry Memorial Golf Classic
Tuesday, October 1, 2013
Blue Springs Golf Club, Acton, Ontario

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To register for all events visit our website at or call Pam Winter at (416) 282-0022 ext.21.


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"Eye On Our Industry" is published by the CHHMA as an information resource for our members. Member input regarding content and format is welcomed. Please contact Michael Jorgenson by email:, or call at (416) 282-0022, ext. 34. CHHMA is located at 1335 Morningside Ave., Suite 101, Scarborough, ON, M1B 5M4

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