Aktrin Predicts Growth in Canadian Furniture Business

September 17, 2006  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on September 2006 The Canadian economy is performing a bit better than the U.S. economy, and posted a 2.9 percent increase last year.

According to Aktrin’s monitor of Canadian consumer spending on furniture and bedding, the rate will continue this year only a slow a bit in 2007.

Growth in personal income climbed 5 percent in 2005, and Aktrin predicts that growth this year will be at a slightly faster pace of 5.7 percent. Next year, however, personal income will slow to below 5 percent.

The Canadian residential housing market remained healthy in 2005. It advanced by 3.2 percent, down from 7.8 percent the year before. However, Aktrin said the market is saturated now and demand is waning.

“We predict a growth rate of only 3.6 percent in 2006,” the report said. “If mortgage rates continue to climb it may even fall below 2 percent in 2007. In unit terms, this represents a drop from 225,000 in 2006 to less than 200,000 next year.

The report said expenditures for durable consumer goods, which includes furniture, are even more buoyant. Growth stood at a healthy 5.8 percent in 2005, up from 2.5 percent in 2004. This year’s rate will be similar. However, if consumer confidence declines and interest rates continue to climb, we expect durable consumer good sales to advance by only 3.5 percent next year.

The Canadian furniture market has been plowing ahead without interruption since the third quarter of 2002. Growth stood at 6.2 percent in 2005. Indications are that growth will continue this year at a similar pace. For 2007, we predict a slowdown to 4.4 percent. The size of the Canadian furniture market in 2005 stood at C$ 10.2 billion retail and Aktrin predicts the market valuation will reach C$ 10.8 billion this year.