Eagle Vision Quarterly Newsletter

June 2012

Richard L. Simms
President, Black Eagle Executive Search

As we enter the second half of 2012, the primary words to describe the employment situation in Canada would be “uncertainty and caution”. Even though corporate earnings are relatively good, companies are reluctant to increase employment until economic conditions are more certain.

In June 2012, Statistics Canada reported virtually no change in employment figures from the previous month but the employment rate dropped 0.1% to 7.2% as fewer individuals were looking for work. In the United States, 80,000 jobs were added, far less than expected, and the unemployment rate remained at 8.2%.

New mortgage eligibility rules for new home buyers effective July 1, 2012 in Canada making it more difficult to qualify for home mortgages have already had a cooling effect on both demand and pricing particularly in the previously hot real estate markets in Vancouver and Toronto. Vancouver condo and new home sales and prices have been dropping for the last quarter, and condo demand was down considerably in June 2012 in Toronto from the previous year.

For those of us in the home improvement industry, none of the above trends is positive in terms of the economic outlook for the balance of 2012.

Adding to this uncertainty is the continuing deficit problems in European countries especially Greece, Spain, Italy, and Ireland. Recent moves by the European Central Bank to provide loan guarantees to European banks have helped to ease some international concerns. However, austerity measures by the countries noted above are dashing hopes for economic recovery, and resulting economic slowdowns are affecting the export sales of major producing countries such as China and the U.S.

Back in our domestic markets, Canadians appear to be taking their Conservative Government’s message to reduce their household debt seriously which has had a dampening effect on consumer demand.

Thus the overall effect of all this economic news on the Canadian home improvement employment market sector is continuing hiring to replace dismissed or retiring workers, but very little hiring for new and additional employment that would be created by economic growth.

At the recent National Hardware Show in Las Vegas May 1-3, 2012, an informal tour of sales results for exhibiting Canadian firms for the first 4 months of 2012 indicated the following: 36 of 37 firms advised that sales were either flat or slightly down for 2012, and only one firm indicated that sales were up about 10% but this was because of market share gains.

Contact Black Eagle

Telephone: (416) 458-9969
Email: info@blackeagle.ca