Canadian Electrical Wholesaler

Aug 14, 2020

Manufacturing Sales - JuneManufacturing sales rose by a record 20.7% to $48.7 billion in June, following an 11.6% increase in May. Many factories operated at a much higher capacity in June, with the capacity utilization rate (not seasonally adjusted) for the total manufacturing sector increasing 10.9 percentage points to 73.3%. Consistent with the increase in sales and capacity utilization in June, the May reference month release of the Canadian Survey on Business Conditions indicated that almost one-fourth (23.9%) of manufacturers expected to increase their number of employees over the next three months. Still, the capacity utilization rate remained 8.0 percentage points below the June 2019 level (81.3%). 

Sales were up in all 21 industries, led by the motor vehicle and motor vehicle parts industries. Excluding these two industries, manufacturing sales increased 10.3%. Nevertheless, total manufacturing sales in June were 13.2% below their pre-pandemic level in February.

In real (or volume) terms, manufacturing sales increased 18.4%, indicating a higher volume of products sold in June.

Large quarterly decreases for manufacturing sales

Total manufacturing sales decreased from $162.4 billion in the first quarter to $125.3 billion in the second quarter, a record 22.8% decline. The value of sales in the second quarter was at its lowest since the third quarter of 2009. In volume terms, manufacturing sales decreased 20.5% in the second quarter, mostly because of lower volumes sold in the transportation equipment (-50.6%) and petroleum and coal product (-28.5%) industries. 

Manufacturers anticipated an 18.5% decrease in capital spending in 2020 (down to $18.1 billion from $22.1 billion) when compared with 2019, as reported in the revised intentions for non-residential capital and repair expenditures release. The decline in capital spending intentions may impact manufacturing capacity utilization in the future, as well as demand for machinery and equipment.

The impact of the pandemic on manufacturing sales

Based on respondent feedback, the largest estimated impacts of the pandemic on manufacturing sales in dollar terms were in the transportation equipment (-$1.1 billion), machinery (-$481 million), fabricated metal product (-$463 million), petroleum and coal product (-$385 million), food (-$319 million), and primary metal (-$260 million) industries. It should be noted that these estimates are on an unadjusted basis. However, they provide a snapshot of the magnitude with which the pandemic may have lowered sales.

Motor vehicles and motor vehicle parts account for more than half of the sales gain in June

Sales in the transportation equipment industry rose for the second consecutive month, more than doubling (+144.3%) to $8.8 billion in June. The largest increases were in the motor vehicle (+281.6%) and motor vehicle parts (+190.3%) industries, as most plants returned to full production following shutdowns earlier in the pandemic. Despite this monthly increase, sales of motor vehicles and motor vehicle parts were down by one-quarter (-24.4%) compared with June 2019. 

Sales rose for the second consecutive month in the petroleum and coal product industry, up by almost one-third (+31.5%) to $3.3 billion in June. This increase reflects higher prices and volumes—refineries ramped up production in response to greater fuel demand as provinces across Canada continued to ease physical distancing measures and implement their economic recovery plans in June. Nevertheless, total sales of petroleum and coal products were down by almost half (-46.9%) compared with June 2019.
Sales rose by two-thirds (+66.8%) in the aerospace product and parts industry and by over one-quarter (+27.3%) in the plastics and rubber products industry.

Manufacturing sales also increased in the fabricated metal product (+9.9%), primary metal (+8.4%), wood product (+11.7%) and food (+2.3%) industries.

Sales rise in Ontario and Quebec

Manufacturing sales were up in eight provinces in June, with Ontario and Quebec accounting for 92.4% of the national increase.

Sales in Ontario increased for the second consecutive month, up by more than one-third (+35.8%) to $22.5 billion in June. Sales increased in 18 of 21 industries, led by the motor vehicle (+288.9%), motor vehicle parts (+200.7%), plastics and rubber products (+33.8%), petroleum and coal product (+35.8%), fabricated metal product (+18.5%), and primary metal (+16.3%) industries. 

In Quebec, manufacturing sales were up for the second consecutive month, rising 16.9% to $12.5 billion in June. Sales increased in 19 of 21 industries, led by the transportation equipment, petroleum and coal product, plastics and rubber products, and primary metal industries.

Sales were down in Manitoba (-1.7%) and Prince Edward Island (-7.2%), mainly because of lower sales of durable goods.

Manufacturing sales increase in the census metropolitan areas of Toronto and Montréal

On an unadjusted basis, manufacturing sales rose in 10 of the 12 census metropolitan areas covered by the survey in June, led by Toronto (+37.6%) and Montréal (+32.0%).
In Toronto, the increase in the transportation equipment industry (+197.3%) was mostly attributable to motor vehicles and motor vehicle parts.

In Montréal, higher sales of transportation equipment (+88.5%) and primary metals (+63.3%) drove the growth in June.

Manufacturing sales in Regina were down 14.3%, mostly because of lower seasonal sales in the chemical industry.

Inventory levels decrease

Inventory levels declined for the third consecutive month, decreasing 0.3% to $87.1 billion in June. Inventories were down in 14 of 21 industries, led by the fabricated metal product (-7.4%), primary metal (-4.3%), transportation equipment (-1.4%) and wood product (-4.3%) industries. These decreases were partly offset by a 21.5% increase in petroleum and coal product inventories.

The inventory-to-sales ratio declined from 2.16 in May to 1.79 in June. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Unfilled orders decline

Total unfilled orders for the manufacturing sector declined 1.6% to $94.2 billion, the third consecutive monthly decrease. Overall, unfilled orders were down in 8 of 21 industries, with the largest decreases in the transportation equipment and fabricated metal product industries.

This was partially offset by higher unfilled orders in the primary metal, chemical, and plastics and rubber products industries.

New orders rose for the second straight month, up 23.6% to $47.2 billion in June—mostly on higher orders of transportation equipment.

Capacity utilization rate increases

The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector rose from 62.4% in May to 73.3% in June.

The capacity utilization rate for durable goods rose 17.0 percentage points to 70.8%, mostly attributable to higher production at motor vehicle assembly and motor vehicle parts plants after some of these plants were shut down as a result of the pandemic in May. 

The capacity utilization rate for non-durable goods rose 4.2 percentage points to 76.1% in June, partly reflecting ramped up production of plastics and rubber products.
Source: Statistics Canada, www150.statcan.gc.ca/n1/daily-quotidien/200814/dq200814a-eng.htm?HPA=1

David Gordon New 400Everyone is an expert in pricing. It’s either too high or too low based upon your role. Salespeople like it low. Management wants it high. The customer wants it “right” which, usually means “competitive” or “It’s reasonable for the value I am receiving.”

And the term “value” is intriguing as it infers that you understand
• the value that you bring
• the value that your product / service brings
• the competitive landscape (which also includes alternatives and inertia)

But I digress. 

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LDS Magiclite LS 400Magic Lite has announced the signing of Lightspec Canada Inc. as their Specification Sales Agent for the GTA.

As the Canadian Division of Lightspec, LLC, NY, this agency is headed by Steve Danzig as President and Neil Whiteford as Sales Manager. This talented sales team has over 150 years combined experience with Lighting Design, Applications, Lighting Controls, Distribution and Project Management. They are committed to bringing attentive service and expertise to their clients for their designs, projects, lighting requirements and acting as their trusted advisor and partner.

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Carol McGloganBy Carol McGlogan

EFC has just polled our members to determine the game changers that keep them up at night. Understandably, COVID-19 topped the list this year. However, talent remained the biggest issue outside of the pandemic. In September, members will have a chance to gather insights from EFC’s most recent research study: Talent for an Emerging Workforce. 

This is not intended as a spoiler alert, but “upskilling of current employees” is identified as one of the critical strategies that members need to employ...

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Manufacturing Sales - JuneManufacturing sales rose by a record 20.7% to $48.7 billion in June, following an 11.6% increase in May. Many factories operated at a much higher capacity in June, with the capacity utilization rate (not seasonally adjusted) for the total manufacturing sector increasing 10.9 percentage points to 73.3%.

Consistent with the increase in sales and capacity utilization in June, the May reference month release of the Canadian Survey on Business Conditions indicated that almost one-fourth (23.9%) of manufacturers expected to increase their number of employees over the next three months. Still, the capacity utilization rate remained 8.0 percentage points below the June 2019 level (81.3%). 

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WescoBy John Kerr

Last week Wesco held its first call detailing its results post merger with Anixter. This meeting followed Wesco’s agreement with Competition Bureau Canada to divest its legacy utility businesses (Trydor, Brews and Laprairie), along with its datacom business with annual revenues approaching CDN$200 million, according to the release of August 6.

Canadian Electrical Wholesaler estimates the merged group after divestitures will reach just under CDN$2 billion, making it the largest electrical distributor in Canada ahead of Sonepar and Rexel...

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Changing Scene

  • Prev
Late April 2020 ECM Industries acquired ILSCO. Since that time, they have been integrating the two ...
Since 1993, E.B. Horsman & Son(EBH) has been a proud supporter of BC Children’s Hospital ...
Southwire has aquired Construction Electrical Products (CEP) of Livermore, CA. Serving the ...
Salex has announced the expansion of its lighting agency to Southwestern Ontario.   ...
IDEA will be hosting a Webinar series that will feature a glimpse of the insight and valuable ...
On August 26th Sonepar Canada's divisions of Dixon, MGM, and Gescan Ontario launched their new web ...
Excellence in Manufacturing Consortium (EMC) recognizes the importance of maintaining high level ...
Stanpro have announced the retirement of Dennis O'Keefe, releasing the following statement ...
Mr. Steven Wright joins IMARK Electrical, Inc. as the Vice President of Supplier Relations and ...

CEW supplychain efc 400EFC’s 2nd Annual Supply Chain Summit will be held virtually. You won’t want to miss this event…where the electrical industry meets modern supply chain technologies and emerging trends.

Overview: Digital technologies have amplified the features and functionality of our electrical products and are fast-becoming mainstream in how we service our customers and partners. Learn how your organization can pivot its supply chain strategy towards a digitized and automated enterprise, optimizing supply chain management to reach new service levels, lower costs and improve overall operational effectiveness.

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EIN 55 AD NewCanadaWarehouse 400AD is announcing that its new Canada warehouse and meeting center, located in the greater Toronto area, is officially open for business. The new facility provides Canada-based AD members with redistribution of over 75 product lines of industrial, safety and janitorial items, including private-label brand Tuff Grade.

The original warehouse location came to AD as a part of its merger with IDI in 2019. Until now, it was available exclusively for use by members in the Industrial & Safety-Canada Division. The new facility, nearly double in size from the former location, broadens the scope of AD’s warehousing capabilities to all AD divisions in Canada, paving the way for growth and added services for members.

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Steven WrightMr. Steven Wright joins IMARK Electrical, Inc. as the Vice President of Supplier Relations and Development effective September 1, 2020.  Mr. Wright will report to Jerry Knight who is transitioning to President of IMARK Electrical as of November 1, 2020.

Mr. Wright comes to us with a varied background in wholesale distribution with Vallen / Sonepar, WESCO, Ace & True Value Hardware. 

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CEW Ricard Corinne 400The addition of a new member to Ricard Agency’s team is in line with the growth and development strategy the agency has envisioned for the province of Quebec and the Ottawa region.

As an outside sales representative, Corinne Galarneau will mainly cover the south shore of Montreal as well as the eastern side of the island. She will represent and support manufacturers in Ricard agency’s portfolio while developing strong, ongoing relationships with prospects and customers.

With over 12 years of experience in public relations and marketing, Galarneau excels in business development, more specifically in the sales of world-class products and services.

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Peers & Profiles

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Tim King, Southwire Canada’s new President and first Canadian to assume the role, has taken the ...
Mission Technical Solutions is a recently established sales agency founded by industry veteran ...
  Sonepar is excited to introduce Anju Uddin as the new Marketing Manager for their Ontario ...
Electro-Federation Canada’s Young Professional Network (YPN) is a fantastic tool for industry ...
Sean Bernard is the Intelligent Controls Manager, Canada for Ideal Industries. Sean resides in ...
Jenny Ng is a Business Development Manager for the Power Solutions Division of Schneider Electric. ...

CEW 18 PP TimKing 400By Line Goyette

Tim King, Southwire Canada’s new President and first Canadian to assume the role, has taken the helm in the midst of the midst of the COVID-19 health crisis.

Previously, Tim served as Southwire Canada’s Director of Finance, HR and Administration. He has a background in economics and finance from Wilfred Laurier University. As a student, he was convinced that having a solid understanding of finance and economics would be an essential foundation to build his professional future. Over the course of his career, he purposefully acquired a broad range of skills, experience and knowledge to succeed in his new role. “I’ve had the opportunity to have worked for two large Fortune 500 corporations and I was very fortunate to have been exposed to many areas of the business. In fact, I have held 9 different roles in 15 years, in finance, operations, marketing and sales.”

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Trevor ElliottBy CEW Editorial Team

Mission Technical Solutions is a recently established sales agency founded by industry veteran Trevor Elliott. Panduit announced it would move to an agent representation model across North America earlier this year and named MTS as its Canadian representative, outside of the Atlantic provinces.

In this role, Elliott brings a long history in both supply and electrical distribution in Canada and he and his team are experienced in the Panduit electrical product line. Joining Elliott are Jean Pierre La France, Dennis Wight, Keith McRobbie, Kevin Wilkinson and Paul Stoynich. 

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