Eagle Vision Quarterly Newsletter

September 2011

Richard L. Simms
President, Black Eagle Executive Search

The September employment figures released by Statistics Canada on October 7, 2011 indicate some interesting disparities in regards to the performance of various industry sectors as they relate to the home improvement sector:

Following two months of little change, employment rose by 61,000 in September, all in full time. This increase pushed the unemployment rate down 0.2 percentage points to 7.1%, the lowest rate since December 2008.

In the 12 months to September, employment has grown by 1.7% (+294,000), primarily in Ontario and Alberta. Over this period, full-time employment rose by 2.5% (+344,000), part-time work declined 1.5% (-50,000) and total actual hours worked increased 2.0%.


Following little change in the previous three months, employment in manufacturing was down 24,000 in September. This decline leaves employment slightly above its level of September 2010 (+0.8% or +13,000).

 

While employment in construction was little changed in September, it was up 4.1% (+50,000) from a year earlier, one of the highest growth rates of all industries.”

For the U.S. job market as reported on October 7, 2011:

Nonfarm payroll employment edged up by 103,000 in September, and the unemployment rate held at 9.1%, the U.S. Bureau of Statistics reported today.


And the following information indicates the state of the housing market in Canada as reported by CMHC on October 11, 2011:

The seasonally adjusted annual rate of housing starts was 205,900 units in September, according to Canada Mortgage and Housing Corporation (CMHC). This is up from 191,900 units in August 2011.

For the U.S. housing market as reported on September 20, 2011:

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for August 2011:

 

Building Permits - Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 620,000. This is 3.2% above the revised July rate of 601,000 and is 7.8% above the August 2010 estimate of 575,000.

Thus, despite nervous speculation in regards to the world economy moving towards recession again, Canada’s economic performance remains relatively good throughout the first 3 quarters of 2011. And as noted above, U.S. unemployment remains high at 9.1% in September and their housing market is still stagnant which, of course, affects Canadian exports (especially lumber) to our largest trading partner.

In Canada, however, there is much uncertainty in the market place, and most manufacturers and distributors in building materials products have experienced declines in sales in the 9 months ending September 30, 2011 caused by both economic and variable weather conditions. Thus from an employment point of view, hiring at present is largely on a replacement basis from retirements or dismissals. The housewares side of the home improvement business has done somewhat better as it is not as susceptible to weather variability and most housewares manufacturers have experienced flat or slightly increasing sales for the first ¾ of 2011. Companies that have experienced better than average growth in all home improvement sectors have achieved these gains primarily through either market share growth or aggressive new product innovation and introduction.

 

Contact Black Eagle

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