Canadian Electrical Wholesaler

Aug 28, 2019

Wholesale SalesWholesale sales rose 0.6% to $64.1 billion in June, partly offsetting the 1.9% decline in May. Sales were up in four of seven subsectors, representing 54% of total wholesale sales.

In dollar terms, two subsectors — miscellaneous, and machinery, equipment and supplies — contributed the most to the increase in June, while the motor vehicle and motor vehicle parts and accessories subsector posted the largest decline.

In volume terms, wholesale sales increased 0.6%.

During the second quarter, current dollar sales rose 1.3%, the 13th consecutive quarterly gain. Quarterly sales increased in five of seven subsectors, led by the machinery, equipment and supplies subsector, and the personal and household goods subsector. Constant dollar sales were up 1.2% in the quarter.

Increase in June attributable to higher sales in four of seven subsectors

In dollar terms, the miscellaneous subsector reported the largest increase in June, as sales rose 3.5% to $8.2 billion. Sales were up in three of five of its component industries, led by the other miscellaneous (+7.2%) and the agricultural supplies (+6.7%) industries. The other miscellaneous industry comprises establishments primarily engaged in wholesaling logs, wood chips, minerals, ores and concentrates, precious metals, second-hand goods and other products.

Sales in the machinery, equipment and supplies subsector rose 1.5% to $13.9 billion in June.

In the food, beverage and tobacco subsector, sales increased for the third time in four months, up 1.3% to $12.1 billion, almost entirely offsetting the 1.4% decline reported in May. While gains were recorded in all three industries, the food industry contributed the most to the rise. On a quarterly basis, this subsector was up 0.9%, the fourth consecutive increase.

Sales in the motor vehicle and motor vehicle parts and accessories subsector decreased 1.9% to $10.9 billion. Lower sales in the motor vehicle and parts industry (-2.4%) contributed the most to the decline. In the second quarter, sales in this subsector increased 0.5%, the second consecutive gain.

Sales rise in every province in June

In June, higher sales were recorded in each province, led by increases in Alberta, Manitoba and Saskatchewan. The last time every province recorded higher month-over-month sales was in October 2017.

Sales in Alberta increased 1.3% in June to $6.9 billion, following an 8.3% decline in May. Higher sales were recorded in four of seven subsectors, led by the machinery, equipment and supplies subsector, and the motor vehicle and motor vehicle parts and accessories subsector.

Sales in Manitoba rose 4.8% to $1.6 billion, with increases in six of seven subsectors. The machinery, equipment and supplies subsector (+7.7%) led the gains, followed by the food, beverage and tobacco subsector (+5.0%). The miscellaneous subsector (-1.8%) recorded the sole decline in June, with sales reaching their lowest value since January 2015.

In Saskatchewan, sales increased for the first time in four months, up 2.2% to $2.3 billion, on higher sales in three subsectors. The advance was largely due to higher sales in the miscellaneous subsector (+5.2%), mainly in the agricultural supplies industry.

Inventories increase for a 10th consecutive month

Wholesale inventories rose 1.5% to $93.3 billion in June, the 10th consecutive monthly gain. Increases were recorded in six of seven subsectors, representing 83% of total wholesale inventories. Inventories rose 3.2% in the second quarter of 2019, the 12th consecutive quarterly increase.

Inventories in the motor vehicle and motor vehicle parts and accessories subsector increased for the second consecutive month, up 3.6% to $13.4 billion, the highest level on record. Almost 90% of the rise in the subsector was attributable to higher inventory levels in the motor vehicle industry.

In the miscellaneous subsector, inventories rose 3.3% to $11.7 billion. Increases were recorded in four of five industries, led by the other miscellaneous and the agricultural supplies industries.
Following three consecutive monthly increases, inventories in the building material and supplies subsector declined 0.9% to $15.4 billion in June. In dollar terms, the metal service centres industry contributed the most to the decline in inventory.

The inventory-to-sales ratio increased from 1.44 in May to 1.45 in June. For more than a year, this ratio has generally been on the rise, having increased from 1.36 in June 2018 to 1.45 in June 2019. Prior to 2019, the last time this ratio was 1.40 or at a higher level for more than two consecutive months was in the beginning of 2009. An increase was also observed in the manufacturing sector, where the ratio rose from 1.41 to 1.51 during the same period. A similar gain was also recorded in the United States wholesale sector, according to the United States Census Bureau. 

The inventory-to-sales ratio is a measure of the time (in months) required to exhaust inventories if sales were to remain at their current level.

Source: Statistics Canada, www150.statcan.gc.ca/n1/daily-quotidien/190822/dq190822b-eng.htm?CMP=mstatcan

CEW market research 400By John Kerr

The past nine weeks have been to say the least a challenge across the electrical industry. From agents to suppliers, from end users to the electrical channel, all have been affected, all have been forced to think differently and all have begun the journey to retooling the way we operate.

This is the third report in our series quantifying and exploring how electrical wholesalers have had to adapt and how they are looking to find a way forward. For this we have taken a different approach from our previous reports in that we have incorporated the results from our recent survey alongside personal interviews and discussions with electrical distributor teams across Canada

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arkest Before the Dawn, Part 2

CEW 9 JK Figure 1 700By John Kerr

I spoke in my previous article about my father’s quote darkest before the dawn. Well, he had another saying clearly brought forward by his growing up in the depression. He would say, “Money is not everything. It just helps,” and at a time like this when there are so many storylines of effort above and beyond the call, and so many initiatives underway by electrical distributors, there will be a rallying right across the country. The electrical distributors are moving, reacting, and more adaptable than ever before. 

The current situation we find ourselves in is to say the least fluid, dynamic and somewhat disconcerting for many, but underlying it is a focused, disciplined approach to addressing the new norm and new reality. Some branches remain closed, some open with minimal staff, and others rotating staff and working differently than ever before.

Recent public reports by Wesco and Rexel have indicated drops approaching 23% through mid April and clearly ones that demonstrated a slowdown from mid March. Our discussions with both distributors and end users/contractors alike confirm their buying and purchasing activity were curtailed more aggressively in early April.

Over 106 electrical distributors responded to our recent survey with 73% from corporate and branch management. 

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Gurvinder ChopraBy Gurvinder Chopra

This June, Canadians will commemorate Electrical Safety Month; June also marks the fourth month of the COVID-19 pandemic national lockdown. For many Canadians, working from home has become the new normal. As confinement continues, the demand for constant power feed to connect to the world we now live, work, and play in at home has grown substantially. Homes are being equipped with new technologies that offer plenty of benefits, but they also place high demand on electrical systems at home, potentially causing serious safety risks. 

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David GordonBy David Gordon

In talking with distributors and manufacturers it is clear that many are actively in the planning and pivoting mode, moving from survivability to thriveability. They’ve stabilized their business financially, emotionally (from a staff viewpoint) and operationally. Now they are looking at “doing business,” and more financially secure ones are identifying ways to take share.

This doesn’t mean that others are not planning and pivoting. Some didn’t miss a beat; others typically don’t do much planning and live in the moment. 

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Building Permits - MarchThe total value of building permits issued by Canadian municipalities decreased 13.2% to $7.4 billion in March, with declines reported in seven provinces and two territories. The $1.1 billion national decrease was the largest since August 2014. This reflected notable drops in Ontario (-12.9%), Quebec (-18.1%) and British Columbia (-19.4%), which coincided with efforts to slow the spread of COVID-19.

 Value of residential permits down

The total value of residential permits decreased 13.1% to $4.6 billion in March.

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Changing Scene

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EIN evolve 400As we continue to respond to the changing status with the COVID-19 outbreak, EFC is taking preventative measures to protect conference delegates from any further risks associated with this virus. After much consideration and consultation, the EFC Board has decided to cancel EFC’s Industry Conference in Banff which was rescheduled from late May to September 1 - 3, 2020. This decision was difficult but necessary for the safety of our members, employees, and the community.

One of EFC's key mandates, is to deliver a premier national thought-leadership conference for industry members, partners, and affiliates. 

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Sonepar's Gaurav SharmaA new video featuring Sonepar’s Vice President of eCommerce and Digitalization, Gaurav Sharma, answers COVID-19 related questions regarding Sonepar Canada’s digital solutions, his team, and the future of eCommerce in the electrical wholesale industry.

Among new solutions introduced by Sonepar: customers can now create an online account through a simple text message. Traffic on Sonepar’s website has tripled since the pandemic began, and the number of new accounts has doubled. Many Sonepar locations also feature curbside pick-up.

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Schneider ElectricThe Continental Automated Buildings Association (CABA) is pleased to announce the appointment of Hugo Lafontaine, Vice-President Digital Energy at Schneider Electric Canada. CABA is an international nonprofit industry association that provides information, education and networking to help promote advanced technologies for the automation of homes and buildings.

“We are delighted to welcome Hugo Lafontaine to CABA's Board,” said Ron Zimmer, CABA President & CEO “He brings a stellar background in building systems integration and the building automation market, and a wealth of insight into the digital platforms and solutions that will define smart-building innovations now and into the future.”

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Harold HayesHarold Hayes, a stalwart of the electrical industry, passed away peacefully in Scarborough, Ontario at the age of 90 on May 9, 2020.

Harold joined the industry as an apprentice at age 18, working first for his father’s business, Power Cable Installations, and then for Comstock. Among his later accomplishments, he formed Federal Pioneer Electric’s electric heating division, served as president of the Ontario Electric League in 1985, and while in his 80s consulted for Intellimeter Canada Inc.

 

 

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Sarah SilversteinBlake Marchand

Sarah Silverstein is a principal with Liteline along side her two brothers Mark and Daniel. Together, they lead the company founded by their father, Steve Silverstein, who retired in 2018.

Although she initially pursued a career in outdoor education, Sarah was instrumental in the company’s expansion into architectural lighting and the U.S. market. She joined Liteline as a project manager in between stints working in outdoor education. Now she leads Liteline’s U.S. distribution arm and marketing department.

 

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