Canadian Electrical Wholesaler

June 18, 2018

Economy 3Real gross domestic product (GDP) grew 0.3% in the first quarter, following an increase of 0.4% in each of the previous two quarters. Final domestic demand rose by 0.5%.

Growth was moderated by a deceleration in household spending, lower exports of non-energy products, and a decline in housing investment (-1.9%).

Household spending grew 0.3%, the slowest pace since the first quarter of 2015. Growth was driven by increased outlays on services (+0.5%). Household spending on goods was unchanged, following 11 consecutive quarterly increases.

Export volumes rose 0.4% after increasing 1.0% in the fourth quarter of 2017. Exports of crude oil and crude bitumen (+9.9%) largely contributed to the gains. Exports of services grew 1.7% in the first quarter, following a 1.3% increase in the previous quarter.

Business investment in machinery and equipment (+4.2%) and intellectual property products (+3.3%) increased at a faster pace than in the fourth quarter of 2017.

Expressed at an annualized rate, real GDP was up 1.3% in the first quarter. In comparison, real GDP in the United States grew 2.2%.

Housing investment falls

Investment in housing fell 1.9% in the first quarter, the largest decline since the first quarter of 2009, due to a drop in ownership transfer costs (-13.5%). Lower resale activity coincided with new mortgage stress measures introduced nationwide in January. Business outlays on new construction slowed to 1.2% growth, while renovations increased 1.4%.

Consumer spending decelerates

Household final consumption expenditure decelerated for a third consecutive quarter, slowing to 0.3% in the first quarter. Outlays on goods were virtually unchanged, while outlays on services grew 0.5%.

Housing-related expenses (housing, water, electricity, gas and other fuels) increased 0.8% and outlays on insurance and financial services grew 1.5%. Purchases of vehicles were flat in the first quarter, following strong growth in 2017.

Non-residential investment increases

Investment in machinery and equipment rose 4.2% in the first quarter, with medium and heavy trucks, buses and other motor vehicles (+12.5%) and industrial machinery and equipment (+3.9%) contributing to the growth. Intellectual property products rose 3.3%, as mineral exploration and evaluation (+8.0%) rebounded and software (+3.2%) accelerated. Investment in non-residential structures increased 1.5%.

Export growth slows

Growth in export volumes slowed to 0.4% in the first quarter, following a 1.0% gain in the previous quarter. The first quarter growth was driven by exports of services (+1.7%), including commercial (+2.2%) and travel (+1.7%) services.

Exports of goods edged up 0.2%, as growth in crude oil and crude bitumen (+9.9%) and motor vehicles and parts (+2.0%) was partially offset by lower exports of refined petroleum energy products (-18.8%).

Imports rose by 1.2% in the first quarter, with similar increases in goods and services.

Growth in imports of goods was led by passenger cars and light trucks (+5.9%), tires, motor vehicle engines and parts (+6.0%) and basic chemicals and industrial chemical products (+8.6%).

Imports of services rose 1.1%, as those of commercial (+1.3%), transportation (+1.4%) and travel (+0.6%) services all increased.

Inventories continue to accumulate

Businesses added $15.2 billion to their inventories in the first quarter, following an accumulation of $15.9 billion in the previous quarter. Wholesalers (+$5.4 billion), manufacturers (+$4.0 billion) and retailers (+$2.6 billion) all added to their stocks. Farm inventories grew by $567 million, compared with an accumulation of $2.7 billion in the fourth quarter of 2017. The economy-wide stock-to-sales ratio increased from 0.760 to 0.765 in the first quarter.

Economy-wide income increases

Real gross national income (the real purchasing power of income earned by Canadian-owned factors of production) increased 0.5% in the first quarter, outpacing real GDP growth for a third consecutive quarter.

The GDP implicit price index, representing the price of goods and services produced in Canada, rose 0.3%. Export prices (+1.0%) increased at a faster pace than import prices (+0.7%), leading to slightly improved terms of trade.

Gross operating surplus (in nominal terms) grew 0.7%, led by increased earnings of energy producers.

Household disposable income rose by 0.8%, as compensation of employees was up 1.0%. The household saving rate edged down to 4.4%, with household spending slightly outpacing disposable income in the first quarter.

Source: Statistics Canada, www150.statcan.gc.ca/n1/daily-quotidien/180531/dq180531a-eng.htm

 

 

David GordonBy David Gordon

We’ve gone from looking at the coronavirus from afar to being in the middle of the coronavirus storm. It’s obviously changed the business and outlook for the year. While tragic, and disruptive, the phrase “this to shall pass” should be kept in mind.

Some thoughts regarding doing business in the coronavirus era:

1. Take care of your people.  If they are concerned about family, they are less focused on business. 

 

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Wholesale Sales - JanuaryWholesale sales increased for a second consecutive month, up 1.8% to $65.2 billion in January. While all subsectors reported higher sales, gains were concentrated in the motor vehicle and motor vehicle parts and accessories and the miscellaneous subsectors.

In volume terms, sales grew 1.7%.

Motor vehicle and agricultural supplies industries drive higher sales in January 

Sales in the motor vehicle and motor vehicle parts subsector grew 3.0% to $11.3 billion in January. 

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Dawn WerryBy Dawn Werry


It’s no surprise that the coronavirus is impacting manufacturing, with production site shutdowns and travel and meeting restrictions. In fact, last month, IHS Markit estimated that manufacturing was the third most impacted industry, behind wholesale and services.

This has hit manufacturers in various ways. Some companies, even those whose primary products or components are manufactured in the hardest hit regions, have seen little or no impact on their ability to meet customer demand. 

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LedvanceLEDVANCE has announced the closure of their Eastern Distribution centre located in Bethlehem, Pennsylvania and move its operations to their Versailles, Kentucky facility. Matt McCarron, Vice President of US and Canada Salesreleased the following statement:

In order to better serve our customers, LEDVANCE continuously looks at maximizing our business processes. As part of that effort, we have recently reviewed our supply chain in order to find synergies that will better service our customers.  Working with industry leading experts and distribution network is in the best interest of our customers, and our ability to maintain or improve our service levels.

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SouthwireOn March 23, 1950 Southwire was founded by Roy Richards Sr. Our organization, which would revolutionize the industry, started making wire and cable with just 12 employees and three machines.

Today, we celebrate 70 years of successful business, quality and service. From our humble beginnings, we have grown from 12 to approximately 7,500 employees and a footprint that has maintained its roots but grown into an internationally recognized organization with employees located in more than 40 cities in the United States and seven countries around the world.

 

 

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Peers & Profiles

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Sean Bernard is the Intelligent Controls Manager, Canada for Ideal Industries. Sean resides in ...
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Omid NadiOmid Nadi, Trade Marketing Manager with Ledvance, is a Ryerson University grad coming out of their Marketing management program.

“During my education I had a big interest in innovation, disruption, and data analytics,” he noted, which has influenced his career direction.

While he was in school, he spent four years in appliance sales, “that really gave me a foundation and an understanding of sales and communication.”

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