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Volume 15, Issue 38, October 14, 2015

Inside This Issue:

• Register Now for Industry Cocktail (December 10th) in Montreal
• CHHMA Looking for Volunteers to Join the Business Events Committee
• Still Time to Register for Hardlines Conference (Oct 21-22)
• Lowe’s to Meet Quebec Suppliers, Raising Speculation about Store Expansion
• Wal-Mart Expects $15-Billion Hit to Full-Year Revenue from Dollar
• Sears Canada Seeks New Credit Card Partner as End of JPMorgan Deal Looms
• RONA Completes Acquisition of Franchised Stores
• Business Leaders More Pessimistic on State of Canadian Economy
• Canada Adds 12,000 Jobs in September, But Unemployment Rate Ticks Up to 7.1%
• Housing Starts in Canada Surprisingly Strong in September
• Canadian New Home Prices Rise, Pushed Up by Ontario
• Value of Canadian Building Permits Drops 3.7% in August
• U.S. Retail Sales Barely Rise, Hit by Lower Gas Receipts

Association News

Register Now for Industry Cocktail (December 10th) in Montreal

This year’s Industry Cocktail is taking place on Thursday, December 10th from 5:30 p.m. to 8:30 p.m., at the Bar Dame de Coeur at the Casino de Montreal.

The location offers a fun and relaxing atmosphere where you can enjoy some wonderful food, drinks and conversation with friends from the industry while enjoying the festive season together.

Click here for further information and registration.  

CHHMA Looking for Volunteers to Join the Business Events Committee

We are looking for volunteers to join the CHHMA Business Events Committee.This committee meets 2 to 3 times a year in the west-end of the GTA for 2 hours.  It is charged with giving input and recommendations for topics of interest to the membership - from stand alone educational seminars, customer presentations and the annual Spring Conference.

If you would like to join this group please send an e-mail to Maureen Hizaka at or call 416-282-0022 ext 23. 

Industry News

Still Time to Register for Hardlines Conference (Oct 21-22)

The Hardlines 20th Anniversary Conference is taking place next Wednesday and Thursday (Oct 21-22) at the Westin Bristol Place Toronto Airport, 950 Dixon Road, Toronto, ON.

The Conference will feature prominent voices from across the hardware/home improvement industry. From Canada’s top home improvement retailers to upcoming technology trends, the 2015 Hardlines Conference will be a jam-packed two days of learning, insights and networking.

Speakers include:

Bernie Owens, President at TIM-BR Mart Group
Ken Jenkins, CEO at Castle Building Centre
Terry Davis, CEO at Home Hardware
Joe Scarlett, Retired CEO, Tractor Supply
Joseph Thompson, VP Marketing & Sales at BuildDirect
Ibrahim Ibrahim, Director at Portland Design
Liz Drayton, Retail at Google Canada
Aron Gampel, VP & Economist at Scotiabank
Jeff Lelond, Manager at Rocky Mountain House Co-op
Hugo Girard, World Champion Strongman

Click here for more information on the conference and to register.  

Also, consider attending the Outstanding Retailer Awards (ORAs) 2015 Gala Dinner which is being held on the Wednesday night (Oct 21) of the conference - 6:00 p.m. start time.The ORAs are the industry’s only independent awards program dedicated to celebrating the achievements of hardware, home improvement and building supply dealers in Canada.

Lowe’s to Meet Quebec Suppliers, Raising Speculation about Store Expansion

Lowe’s is meeting with potential Quebec suppliers next month, spurring speculation that the American home renovation retailer is preparing the groundwork to enter the home turf of rival RONA inc.

“We believe this could be a sign that they are preparing to enter the Quebec market in the near future,” Scotiabank analyst Anthony Zicha wrote in a report.

Mr. Zicha said competition remains fierce in the sector, with RONA facing challenging conditions even in its home province, which accounts for almost half its sales.

While RONA’s big box Reno Depot stores are experiencing 5% to 6% same-store sales growth, the smaller proximity stores face more difficult conditions in Quebec, he said.

Lowe’s spokeswoman Sandy Indig said the Nov. 5 meeting in Montreal with Quebec suppliers is to understand what products they can offer. The chain is seeking suppliers for a number of products, including doors, lighting and bathroom accessories.

“Development of the Canadian market creates major business opportunities for Quebec companies,” Lowe’s said in a notice of the meeting that has been organized in collaboration with Quebec’s export agency.

U.S.-based Lowe’s is preparing to expand in Canada by 14 locations to 54 stores over the next two years, so far all of them outside Quebec.

Most will be in 12 former Target locations, which the company recently acquired along with Target’s Milton, Ont., distribution centre for $147.75-million. It also plans to spend $50-million to build two new stores in Ontario.

Overall, there will be four new stores in British Columbia, two in Alberta, one in Saskatchewan and seven in Ontario.

Analyst Robin Diedrich of Edward Jones said the company has yet to confirm an expansion into Quebec but said it would make sense strategically as it focuses on urban centres and adds some smaller-sized stores.

Lining up suppliers is a precursor but finding store locations would be an “essential” first move, she said in an interview.

RONA spokesman Valerie Gonzalo declined to comment on Lowe’s strategy.

“We are focusing on our own business and the various initiatives we are putting in place in order to maintain our growth and development,” Ms. Gonzalo said.

Source: The Canadian Press

Wal-Mart Expects $15-Billion Hit to Full-Year Revenue from Dollar

Wal-Mart Stores Inc .Chief Executive Doug McMillon said on Wednesday that the strong dollar would likely reduce the company’s full-year revenue by $15-billion.

The world’s largest retailer, which McMillon said gets about a third of revenue and a quarter of profit from outside the United States, reported revenue of $485.7-billion last year.

The company is also adding 3,000 department managers in the U.S. this year to improve its curb-side grocery pickup service ahead of the holiday season, McMillon said.

“The opportunity to leverage stores for pickup is a huge one... we are announcing 11 more markets now and will be up to more 20 markets in the U.S. by end of this year,” he said.

Wal-Mart said last month it would expand free grocery pickup service as it seeks to capitalize on its network of physical stores amid growing competition with and others investing in home delivery.

Wal-Mart has been grappling with sluggish sales, leading investor to seek significant changes at the company. Last Friday, the company named a new chief financial officer and installed a chief merchant, marking the latest shuffling of its management ranks.

The retailer announced that 47-year-old Brett Biggs, who runs the finances of company's international division, would take over the CFO role from Charles Holley, 59, who will retire from the job at the end of the year.

In a separate release it said Steve Bratspies, who has been in charge of food, was appointed chief merchandising officer, a key role deciding what and how Wal-Mart will sell items at its 4,500 U.S. stores. Bratspies fills a position left vacant for a year following the departure of Duncan Mac Naughton before the holiday season last year. He starts on Oct. 19.

The moves mark the latest in a series of shuffles of top posts under Mr. McMillon, who has been reshaping the retailer since taking the helm 18 months ago. Last week McMillon unveiled plans to cut 450 jobs at its headquarters in Arkansas in an effort to "become a more nimble organization."

In a note to clients, Goldman Sachs noted that the CFO change followed "persistent declines in earnings estimates" and said "investors have been looking for significant changes at the company." McMillon and other top executives are scheduled to address analysts and investors at an annual meeting next week.

Wal-Mart faces tough competition on various fronts, from the relentless expansion of online leader Inc. to regional supermarkets fighting for a piece of Wal-Mart's grocery business, which accounts for more than half of its U.S. sales.

In August, Wal-Mart reported profit below estimates for the second quarter and cut its annual profit forecast, with margins weighed down by its $1 billion investment to boost workers' wages and other cost pressures.

The company also announced last month it had found a "material weakness" in its controls over accounting for leases, though it said any adjustments to its financial statements would be immaterial.

As CFO Holley has responsibility for accounting and control at Wal-Mart. The company did not mention the accounting issue in announcing the CFO change.

It said Holley, who has been CFO since December 2010, had elected to retire. McMillon said Holley oversaw "a period of immense company growth and change" and that he played a key role in "driving significant shareholder returns."

Mr. Biggs has worked in all of the retailer's three major divisions since joining the company in 2000. He has been international CFO since January 2014 and was previously CFO of the U.S. operations and held senior positions in the Sam's Club warehouse division before that.

One focus for investors will be whether Biggs looks to re-allocate capital from international operations, which are delivering much weaker returns than the U.S. business, said Edward Jones analyst Brian Yarbrough.

Yarbrough said he is also keen to see if Wal-Mart resumes a more active stance on share buybacks after scaling back significantly the past two years.

"It will be interesting to see how Brett navigates the ship. We are sailing in much different seas," Yarbrough said.

Wal-Mart named a new chief merchant - a vital position at any retailer involving oversight of product and promotional strategies - just in time for the holiday season, which kicks off in earnest later this month.

Bratspies joined Wal-Mart in 2005 and has held positions in marketing, grocery and general merchandise. Most recently he served as the executive vice president of food in which he was tasked by Greg Foran, the head of the U.S. operations, with improving the grocery operations with a focus on fresh food.

The company said Charles Redfield, a senior executive at Sam's Club, would assume the post of executive vice president of food at Wal-Mart.

Source: Reuters, BNN  

Sears Canada Seeks New Credit Card Partner as End of JPMorgan Deal Looms

Sears Canada Inc. has come down to the wire in finding a new partner to operate its lucrative credit card operations.

The retailer has been looking for a new financial services partner since last year when JPMorgan Chase & Co. said it wouldn’t renew its 10-year agreement, which expires on Nov. 15.

This month, JPMorgan Chase wrote to Sears cardholders warning them their store cards would no longer be valid after Nov. 15 if Sears has no alternative deal by then.

Sears’s search for a credit card operator is important for the retailer because it counts on getting fees from its financial services partner, helping bolster Sears’s challenged bottom line.

“It’s another headache to deal with,” said David Tawil, co-founder and portfolio manager at Maglan Capital, which follows distressed companies. “It increases the challenge for management.”

For years, Sears has been losing ground to rivals amid a successive array of corporate leaders to revive its fortunes. Now it needs to find a new operator or business model for its credit card program to ensure it can continue to benefit from the critical business.

Sears spokesman Vincent Power said the retailer continues “to work on a solution; we are committed to providing payment and financing options to our customers across Canada, and we look forward to making an announcement on this matter in the near future.”

Although Sears doesn’t reveal the profit it makes under its current contract with JPMorgan Chase, in the earlier years it generated more than $60-million of annual operating earnings, according to Keith Howlett, retail analyst at Desjardins Securities.

And while the operating profit has probably dipped along with Sears’s sales, “the relative importance of the profit contribution of credit has increased” relative to the retailer’s weak financial results, Mr. Howlett said in a report late last year.

JPMorgan Chase, which runs the Sears credit card and Sears MasterCard operation, has agreed to pay the retailer up to $174-million if a sale of the existing portfolio occurs under certain circumstances, which have not been disclosed.

In a letter to Sears card holders, dated Oct. 2 and marked “important information,” Derek Johnson, vice-president and general manager of Chase card services, says it and Sears are “engaged in discussions with third parties about the continuation of the Sears credit card program with a party other than Chase.”

“If the Sears credit card program does not continue with a party other than Chase, Sears cards will no longer be accepted at Sears” after Nov. 15, it says. “Therefore, Chase will be closing all of these accounts, including your Sears card account.” Chase noted in a separate letter to Sears MasterCard holders that they can continue to use the cards anywhere they’re accepted, including Sears.

At the same time, Sears is launching a separate rewards card on Nov. 16 to allow card holders to keep the reward points they have earned, the retailer announced on Sept. 14. “All of your current Sears Club points will be automatically transferred to the improved Sears Club rewards program,” it says on its website.

Jim Danahy, managing principal at retail consultancy CustomerLab, said Sears has left the decision to find another credit card partner “more 11th-hour than you would expect,” raising questions about whether there will be a deal.

He said Sears may now be looking at taking the credit card operation in-house to try to cash in on it, partly by eventually selling its valuable customer list. “Maybe something bigger is in the wind and it’s not just about the credit card,” said Mr. Danahy, who also is program director at York University’s Centre of Excellence for Retail Leadership.

Industry insiders say Sears had a very attractive deal with JPMorgan Chase, which was keen to come to Canada a decade ago. “No one will replicate those terms, so any deal made now will be much less lucrative,” one industry source said. “The ongoing profits will really shrink.”

Many major retailers team with financial services companies to run their credit card operations. Canadian banks have shown growing interest in the partnerships.

Sears’s credit card deadline looms as its new leader, executive chairman Brandon Stranzl, works on a turnaround plan for the retailer, including shaving expenses and selling non-core assets.

In past years, the retailer has raised money by selling some of its top store leases, sometimes making way for U.S. rival Nordstrom Inc. The retailer will even consider downsizing some stores, Mr. Stranzl said last month.

The stakes are high for Sears. Mr. Howlett predicted recently it has less than two years to prove itself. “The next seven quarters are ‘make it or break it’ for Sears Canada,” he said in late June.

Source: Article by Marina Strauss, The Globe and Mail   

RONA Completes Acquisition of Franchised Stores

RONA inc. announced last week that it has completed the acquisition of the 20 franchised stores in its network, following the announcement on July 16, 2015 that the company had signed a letter of intent to do so. The last of these transactions was completed last Wednesday morning, following satisfactory due diligence and the entering into of definitive purchase agreements.

RONA has acquired, through 15 individual transactions, substantially all of the assets of these 20 franchised stores, comprising 17 big box stores and three proximity stores, operating under the RONA, RONA L’entrepôt and RONA Home & Garden banners. Two of those transactions were closed on the last day of the third quarter and the remainder were closed in the fourth quarter.

These stores, 18 of which are located in Québec and two in Ontario, generate more than $500 million in retail sales annually. The overall consideration, prior to working capital adjustments, for the acquisition is $193 million. Under IFRS requirements, RONA will record a one-time pre-tax expense in the amount of $48.5 million forming part of the overall consideration for the acquisition to account for the settlement of a pre-existing relationship between the Corporation and the sellers. Simultaneously, RONA will receive $19 million for its economic interest in three legal entities that held the assets purchased.

“We are pleased to announce that this transaction has been finalized and we are proud to be able to count on the skills and experience of the 2,600 employees as they continue to provide our customers with excellent service,” said Robert Sawyer, President and Chief Executive Officer of RONA.

Source: RONA inc. 

Economic News

Business Leaders More Pessimistic on State of Canadian Economy

Just when some economists were starting to see a little bit of light, Canada’s business leaders are casting some dark shadows over their growth outlook.

In fact, about 40% of senior company managers say they have become less hopeful of a strong economic performance over the next 12 months, according to a third-quarter survey conducted for Chartered Professional Accountants (CPA) of Canada.

That’s up from just 20% of respondents who expressed pessimism in the previous three-month period, the results of the CPA Canada poll showed Tuesday, and a dramatic contrast to results in the third quarter of 2014 — when optimism stood at 48%.

“What a difference a year makes,” said Kevin Dancey, president and CEO of CPA Canada.

“So far this year, pessimism levels have been higher than usual,” he added. “However, more recently, there have been mixed indicators about where the Canadian economy is heading, including signals of growth, so it will be interesting to see what the next quarterly results reveal.”

The 12-month outlooks by those same business leaders for their own companies, however, have been little changed so far in 2015.

While an optimistic view among top CPA professionals hovered around only 46% in the third quarter, that’s still close to the average reading this year of 50%. At the same time, the outlook for improved revenues over the next 12 months remains at about 57%, even though prospects for increased profits now sit at 51% — down from 56% in the second quarter.

As for hiring, only 36% anticipate adding staff in the near future — basically unchanged from the previous quarter.

The CPA findings come just days after another closely watched survey pointed to a slightly more optimistic path being taken by Canadian companies.

Last Friday, the Bank of Canada said its third-quarter business outlook poll showed many senior managers are expecting sales to improve over the next two months — and, in turn, they plan to invest more to expand and take on additional staff.

The central bank’s survey “showed that more businesses are betting on an improving U.S. economy and a cheaper loonie to lift Canada’s economy out of its oil-induced slump,” said David Madani, Canadian economist at Capital Economics.

“(But) we think the Bank of Canada will take this optimism with a grain of salt, and would want stronger proof that the economy is on the road to recovery before ruling out the need for more interest rate cuts.”

Stephen Poloz, the central bank governor, has already cut his key lending rate twice this year — both times by 25 basis points — taking it to the current level of 0.5%.

Policymakers will announce their next rate decision on Oct. 21 — two days after the federal election — along with publishing their latest quarterly Monetary Policy Report, a document that will update economic forecasts and trends for Canada and globally.

After sinking into a technical recession in the first half of 2015 — contracting by an annual pace of 0.8% between January and March, followed by a 0.5% decline from April through June — the economy will likely post an annual increase of 1%, according to many forecasters, down from 2.4% last year.

By comparison, the U.S. is expected to post overall growth of 2.5% this year, after 2.4% in 2014.

“There was generally some improvement from the first half of the year,” said BMO Capital Markets chief economist Douglas Porter.

“It’s nice to see that things seem to have turned around a little bit, but they’re still sluggish by any metric,” he said. “It’s going to be a slow grind for the economy.”

Source: Article by Gordon Isfeld, The Financial Post

Canada Adds 12,000 Jobs in September, But Unemployment Rate Ticks Up to 7.1%

The Canadian economy added 12,000 net new jobs in September, but the unemployment rate climbed by one-tenth of a percentage point to 7.1% as more people entered the labour force, Statistics Canada said last Friday.

The gain in the overall number of jobs came due to a gain in part-time employment, offset by a drop in full-time jobs.

The number of part-time jobs increased by 74,000 in September, but full-time employment fell by 62,000.

Regionally, British Columbia and Alberta both posted gains of 12,000 jobs, while Manitoba increased by 4,000.

However, Ontario saw a drop of 34,000 jobs in September as losses in full-time employment were partly offset by gains in part-time work. Quebec added 11,000.

The biggest mover in the September jobs report was the educational services sector which posted a loss of 51,000 jobs for the month, mostly in Ontario and Quebec.

Statistics Canada noted there have been a number of changes in the sector which could affect employment, including recent contract negotiations. The agency noted that before its seasonal adjustment the number of people working in the sector increased, but less than typically observed, resulting in the decline in the seasonally adjusted result.

The information, culture and recreation sector added 33,000 jobs last month, while the “other services” group added 22,000 jobs.

The number of self-employed increased by 31,000 in September, while public sector employment fell 29,000. The number of private sector employees climbed by 10,000.

In the 12 months to September, overall employment increased by 161,000 (+0.9%), with all of the gains in full-time work. Over the same period, the total number of hours worked rose by 1.1%.

For the third quarter, the economy added 31,000 jobs compared with 33,000 in the second quarter and 63,000 in the first three months of the year.

“If I had to choose one indicator in this entire report to summarize it, I would probably focus on the unemployment rate, which has been slowly, but surely, grinding higher … consistent with an economy that’s growing below potential,” said Doug Porter, chief economist at BMO Capital Markets.

Source: Statistics Canada, The Canadian Press, Bloomberg News 

Housing Starts in Canada Surprisingly Strong in September

Canadian housing starts rose to a three-year high last month, a surprise gain led by multiple-unit projects.

Work on new homes advanced 7.7% to 230,701 units at an annual pace in September, the Canada Mortgage & Housing Corporation (CMHC) reported last Thursday from a downwardly revised 214,255 in August.

Economists surveyed by Bloomberg forecast a decline to 202,000 units.

That puts housing starts at the highest since August 2012, bucking forecasts for a slowing in construction to 200,000 starts, which economists have said is more in line with demographic demand.

“In the span of about three months, Canadian home building activity has gone from a controlled simmer to a rolling boil,” BMO Capital Markets senior economist Robert Kavcic said in a research note.

“We probably can’t sustain this level of home building activity for long before excess supply concerns start to build.”

CMHC’s six-month moving average trend of housing starts was 202,506 units in September, up 3.4% from 195,804 in August.

“The trend in housing starts is at its highest point since January 2013, as a result of the launch of some major rental housing projects as well as continued strength in condominium construction,” said Bob Dugan, CMHC’s chief economist. “As a result, trend activity is now above the projected annual pace of around 190,000 new households. This underscores the continuing need for inventory management to minimize the number of completed but unsold units.”

Urban multi-unit projects such as condominiums and apartments increased 10.5% to 157,919 units, and single-
family houses by 0.8% to 58,275 units.

In September, the seasonally adjusted annual rate of urban starts increased in Quebec, the Prairies, Atlantic Canada and British Columbia, but decreased in Ontario.

The number of housing starts in the Calgary region, particularly in the single-detached market dropped significantly from 2014 levels.

Rural starts were estimated at a seasonally adjusted annual rate of 14,507 units, up 7% from 13,559 units in August.

Source: CMHC, Bloomberg News

Canadian New Home Prices Rise, Pushed Up by Ontario

New home prices in Canada rose by 0.3% in August from July on continued strength in Ontario Statistics Canada reported last Thursday.

Market analysts polled by Reuters had expected a 0.2% increase. Compared with a year earlier, prices were up by 1.3%.

The combined region of Toronto and Oshawa was the top contributor to the increase, with prices up 0.6% over the previous month. Builders reported market conditions as the main reason for the gain.  This marks the seventh straight month of price increases in that region.

The census metropolitan area (CMA) of Hamilton recorded the largest price increase in August, up 0.8%. Builders cited market conditions as the primary reason for the advance, the largest in that CMA since April 2013.  Prices in Hamilton have been rising for four consecutive months.

Prices rose 0.7% in the CMA of St. Catharines–Niagara, following a 0.1% decrease the previous month. Builders reported higher material and labour costs and higher list prices as the main reasons for the increase—the largest in that CMA since February 2014.

New housing prices rose 0.2% in the CMAs of Montreal and London.  According to builders, market conditions attributed to the rise in Montreal, while builders in London reported higher construction costs.

Prices were unchanged in 8 of the 21 metropolitan areas surveyed.

The CMAs of Quebec and Regina recorded the largest price decreases in August as both fell 0.2%. Builders in the CMA of Quebec cited market conditions as the main reason for the decline. Builders in Regina reported lowered prices to stimulate sales.

New home prices declined 0.1% in both Charlottetown and Victoria.  Builders in Charlottetown lowered prices to encourage sales. In the CMA of Victoria, higher list prices were offset by lower negotiated selling prices. The decrease in Victoria follows three consecutive months of no price change.

As mentioned, on a year-over-year basis, Statistics Canada’s New Home Price Index (NHPI) rose 1.3% in August, following identical increases in June and July.

The combined metropolitan region of Toronto and Oshawa was the top contributor to the increase in August, with prices up 3.8% over the same month a year earlier. This was the largest year-over-year increase in that CMA since January 2013.

The CMA of Hamilton also recorded a 3.8% year-over-year increase—the largest in that CMA since March 2008.

Other notable increases were observed in Kitchener–Cambridge–Waterloo (+1.6%), London (+1.5%) and Vancouver (+1.4%).

The combined metropolitan region of Saint John, Fredericton and Moncton recorded a 0.2% increase in August, the first annual increase in that CMA since May 2014.

Among the 21 metropolitan areas surveyed, 5 posted year-over-year price declines in August: Regina (-1.8%), Victoria (-1.6%), Ottawa–Gatineau (-1.0%), Québec (-0.6%) and Calgary (-0.2%). This was the first annual decline in Calgary since January 2012.

Source: Statistics Canada, Reuters 

Value of Canadian Building Permits Drops 3.7% in August

The total value of Canadian building permits decreased 3.7% to $7.5 billion in August, following increases of 15.5% in June and 0.7% in July (revised data) Statistics Canada reported last Wednesday. The decline was attributable to lower construction intentions in most provinces, mainly British Columbia, Alberta, Quebec and Saskatchewan.

Market analysts had expected the value of permits to increase by 0.8%.

In the residential sector, municipalities issued $4.7 billion worth of building permits, down 5.1% from July. This was the first decline in three months. Decreases were posted in six provinces, with British Columbia posting the largest decline. Ontario registered the largest increase in the value of residential building permits.

Municipalities issued $2.3 billion worth of building permits for multi-family dwellings in August, down 8.3% from the previous month. The largest decrease was in British Columbia, where the value of building permits for multiple dwellings had reached a record high in July. Alberta and Nova Scotia were a distant second and third. Ontario posted the largest increase in construction intentions for multi-family dwellings.

Contractors took out $2.4 billion worth of building permits for single-family dwellings in August, down 1.9% from July.  This was the first decline in three months. The decrease at the national level was attributable to lower construction intentions for single-family dwellings mostly in Ontario and, to a lesser degree, in Alberta. Conversely, Quebec and Saskatchewan saw the largest increases.

The number of new dwellings approved by municipalities declined 4.6% to 18,709 units. The decrease was attributable to multi-family dwellings, which fell 5.6% to 12,675 units, and single-family dwellings, which declined 2.4% to 6,034 units.

Construction intentions for non-residential buildings declined 1.3% to $2.8 billion in August, a second consecutive monthly decrease. Decreases were recorded in six provinces, led by Alberta, followed by Quebec and Saskatchewan. Ontario registered the largest increase in non-residential construction intentions.

In the industrial component, the value of building permits declined for a second straight month, down 7.9% to $467 million in August. The decline in August was due to lower construction intentions for utilities and transportation buildings. Decreases in four provinces, led by Alberta and Quebec, offset the increases in the other provinces. Saskatchewan and Ontario recorded the largest gains.

Institutional construction intentions fell 4.3% from July to $631 million in August, following a 42.5% decrease the previous month. The decline at the national level in August resulted from lower construction intentions for medical buildings and children's treatment centres.  The largest declines were recorded in Quebec, Manitoba, Ontario and Saskatchewan. Alberta and British Columbia posted the largest increases.

The value of building permits for commercial buildings rose 1.8% to $1.7 billion in August. Higher construction intentions for office buildings and, to a lesser degree, warehouses and laboratories accounted for the growth at the national level. Increases in three provinces, led by Ontario, offset decreases in the other provinces. The largest declines were registered in Alberta, followed by Saskatchewan and Quebec.

Regionally, the total value of building permits fell in every province and territory in August except Ontario, Newfoundland and Labrador and the Northwest Territories. British Columbia, Alberta, Quebec and Saskatchewan saw the largest decreases.

After posting the largest increase the previous month, British Columbia recorded the biggest decrease in August, mostly attributable to lower construction intentions for multi-family dwellings. In Alberta, commercial, industrial and residential buildings were behind the decrease.

In Quebec, the decline was attributable to lower construction intentions for non-residential buildings, mainly commercial buildings. In Saskatchewan, the decrease was a result of lower construction intentions for commercial buildings and, to a lesser extent, institutional buildings.

Conversely, the increase in Ontario resulted from higher construction intentions for commercial buildings and multi-family dwellings.

The slight increase in Newfoundland and Labrador was attributable to institutional buildings, while commercial buildings accounted for the increase in the Northwest Territories.

Source: Statistics Canada, Reuters   

U.S. Retail Sales Barely Rise, Hit by Lower Gas Receipts       

U.S. retail sales barely rose in September as cheaper gasoline weighed on service station receipts, but gains in purchases of automobiles and other goods pointed to solid domestic demand that could shield the economy from slowing global growth.

The Commerce Department said on Wednesday that U.S. retail sales edged up 0.1% last month after being flat in August.

Economists polled by Reuters had forecast retail sales rising 0.2% in September after a previously reported 0.2% increase in August.

Retail sales excluding automobiles, gasoline, building materials and food services slipped 0.1% after a downwardly revised 0.2% gain in August. These so-called core retail sales correspond most closely with the consumer spending component of GDP.

Core retail sales previously were reported to have advanced 0.4% in August. Economists had forecast core retail sales rising 0.3% last month.

The mixed report suggests underlying strength in domestic demand despite a weakening global economy and a slowdown in job growth over the past two months, which have diminished expectations of a U.S. rate hike this year.

Most economists expect the Federal Reserve will raise its benchmark overnight interest rate in December, but financial markets are only pricing in an increase early next year. The
U.S. central bank has kept its short-term interest rate near zero since late 2008.

Economic growth has softened in recent months, mainly because of weak exports, declining capital spending in the energy sector due to lower oil prices and a so-called inventory correction, which have hurt manufacturing activity.

In September, receipts at service stations fell 3.2%, the largest fall since January, after falling 2.0% in August.  Excluding gasoline, U.S. retail sales increased 0.4% last month.

Sales at auto dealerships increased 1.7% after rising 0.4% in August. Clothing store sales rose 0.9% in September.  Receipts at building materials and garden equipment stores fell 0.3%, while sales at furniture stores rose 0.6%.

Receipts at sporting goods and hobby stores increased 0.9% and sales at restaurants and bars rose 0.7%. Sales at electronics and appliance stores slipped 0.2%. Sales at online stores fell 0.2%.

Source:  Reuters  


 Upcoming CHHMA Events 

Industry Cocktail
Thursday, December 10, 2015
Casino de Montreal, Montreal, Quebec

Canada Night
Held in Conjunction with the International Home+Housewares Show
Sunday, March 6, 2016
InterContinental Hotel, Chicago, Illinois

CHHMA Spring Conference & AGM
Tuesday, April 12, 2016
International Centre (Conference Facility), Mississauga, Ontario

CHHMA Maple Leaf Night
Held in Conjunction with the National Hardware Show
Wednesday, May 4, 2016
The Mirage Hotel & Casino, Las Vegas, Nevada

CHHMA Quebec Golf Classic
Thursday, May 26, 2016
Club de golf Le Fontainebleau, Blainville, Quebec

CHHMA Ontario Golf Tournament
Tuesday, May 31, 2016
Angus Glen Golf Club, Markham, Ontario

CHHMA Industry Calendar

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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Canadian Hardware & Housewares Manufacturers Association | 1335 Morningside Ave., Suite 101, Scarborough, ON M1B 5M4
Telephone: (416) 282-0022   Email: