Canadian Electrical Wholesaler

Feb 28, 2020

Q4 GDPGrowth in real gross domestic product (GDP) slowed to 0.1% in the fourth quarter, owing to a decrease in business investment and weak international trade. These declines were offset by increased household spending. Final domestic demand edged up 0.2%, after rising 0.8% in the third quarter.

The annual growth rate of Canada's real GDP was 1.6% for 2019, a deceleration from the 2.0% growth in 2018. By comparison, real GDP in the United States increased 2.3%.
The slowing of Canada's fourth quarter GDP was influenced by several factors, including pipeline shutdowns, unfavourable harvest conditions, rail transportation strikes, impacts on motor vehicle and parts manufacturing from the United Auto Workers' strike in the United States, and continued global trade tensions and market uncertainty.

A strong increase in household spending on services (+0.8%) pushed overall growth into positive territory. Businesses accumulated $10.5 billion of inventories, partly attributable to supply chain disruptions. The economy-wide stock-to-sales ratio increased from 0.850 in the third quarter to 0.862 in the fourth quarter.

Household spending remains strong

Growth in overall household spending (+0.5%) stemmed from household spending on services (+0.8%). Notable increases occurred in imputed rents of owner-occupied housing (+0.6%), paid rents (+0.7%), food and beverage services (+0.4%), air transport (+2.3%) and telecommunication services (+1.0%).

Terms of trade improve slightly

Import prices fell 0.5% in the fourth quarter, while export prices rose 0.3% largely because of a 2.5% increase in the prices of exported crude oil and crude bitumen. Consequently, the terms-of-trade—the ratio of the price of exports to the price of imports—rose 0.8%. Improved terms-of-trade contributed to growth in gross national income (+0.4%), which captures the real purchasing power of income earned by Canadian-owned factors of production.

The GDP implicit price index, which reflects the overall price of domestically produced goods and services, rose 1.0%.

Household disposable income increases

In nominal terms, a 1.2% rise in compensation of employees boosted household disposable income by 1.3% in the fourth quarter. Household final consumption expenditure grew 1.0%, and the household saving rate was 3.0%.

Annual GDP growth slows in 2019

The slowdown in annual growth from 2.0% in 2018 to 1.6% in 2019 was largely due to weaker international trade and investment declines.

Housing investment fell 0.6%, with a 3.4% decline in new construction partly offset by a 5.8% rise in ownership transfer costs. Business investment in non-residential structures was up 0.9%, while investment in machinery and equipment declined 1.4%, and investment in intellectual property products fell 4.7%. 

Growth in export volumes slowed from 3.1% in 2018 to 1.2% in 2019, while growth in import volumes slowed from 2.6% to 0.3%. GDP growth was driven by robust household spending on services (+2.1%). Household spending on durable goods grew 0.6% in 2019, the lowest rate since 2009 (-3.0%).

In nominal terms, growth in GDP slowed slightly—from 3.9% in 2018 to 3.6% in 2019. The labour market remained resilient in 2019, resulting in a 4.4% rise in compensation of employees. This rise outpaced the increase in household spending (+3.3%) and raised the household saving rate to 2.7% in 2019.

Terms of trade improve slightly

Import prices fell 0.5% in the fourth quarter, while export prices rose 0.3% largely because of a 2.5% increase in the prices of exported crude oil and crude bitumen. Consequently, the terms-of-trade—the ratio of the price of exports to the price of imports—rose 0.8%. Improved terms-of-trade contributed to growth in gross national income (+0.4%), which captures the real purchasing power of income earned by Canadian-owned factors of production.

The GDP implicit price index, which reflects the overall price of domestically produced goods and services, rose 1.0%.

Household disposable income increases

In nominal terms, a 1.2% rise in compensation of employees boosted household disposable income by 1.3% in the fourth quarter. Household final consumption expenditure grew 1.0%, and the household saving rate was 3.0%.

Annual GDP growth slows in 2019

The slowdown in annual growth from 2.0% in 2018 to 1.6% in 2019 was largely due to weaker international trade and investment declines.

Housing investment fell 0.6%, with a 3.4% decline in new construction partly offset by a 5.8% rise in ownership transfer costs. Business investment in non-residential structures was up 0.9%, while investment in machinery and equipment declined 1.4%, and investment in intellectual property products fell 4.7%. 

Growth in export volumes slowed from 3.1% in 2018 to 1.2% in 2019, while growth in import volumes slowed from 2.6% to 0.3%. GDP growth was driven by robust household spending on services (+2.1%). Household spending on durable goods grew 0.6% in 2019, the lowest rate since 2009 (-3.0%).

In nominal terms, growth in GDP slowed slightly—from 3.9% in 2018 to 3.6% in 2019. The labour market remained resilient in 2019, resulting in a 4.4% rise in compensation of employees. This rise outpaced the increase in household spending (+3.3%) and raised the household saving rate to 2.7% in 2019.

Source: Statistics Canada, www150.statcan.gc.ca/n1/daily-quotidien/200228/dq200228a-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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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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