Aktrin: Canadian spending to rise 5.3%
By Michael J. Knell -- Furniture Today, April 27, 2006
Oakville, Ontario — Canadian consumer spending on household furniture should climb 5.3% in 2006, according to the latest forecast published by the Aktrin Furniture Information Centre.
Stefan Wille, president of the private industry think tank, said the market should grow to C$10.7 billion this year, up from C$10.1 billion in 2005.
"The economy in Canada has been progressing at a rate of 2.9% last year, and we believe that the performance will be only marginally slower in 2006 and 2007," he said.
Personal income growth advanced at a healthy pace of 5.1% in 2005. It is likely that growth will be again at a similar pace during the next two years, Aktrin projects.
But if the effects of inflation and taxes are eliminated, the performance is a more modest 2.4%. If income taxes are lowered as promised by the new government, real disposable income growth may rise to 3.8% this year, according to Aktrin.
"The Canadian residential housing market was still healthy in 2005," Wille said. "It advanced by 3.7%, down from 8.3% the year before. However, the market is saturated now and demand is waning. We predict a growth rate of only 2.8% in 2006. It may be even lower in 2007 if mortgage rates continue to climb."
Housing starts are likely to fall from 224,000 in 2005 to about 207,000 this year and 185,000 in 2007, he said.
Canadian consumer spending is an important force contributing to the economy's growth, rising at a rate of 3.9% in 2005. Because of rising interest rates, Aktrin forecasts a growth of about 2.9% this year.
Expenditures for durable consumer goods were buoyant last year, growing at 6.2% from 2004.
"However, consumer confidence is declining again. If interest rates continue to climb, we expect durable consumer good sales to advance by only 3.6% this year," Wille said.
The Canadian furniture market — at retail prices and including sales taxes that average 15% across the country — had been on a steady growth track from the third quarter of 2002 until the first quarter of 2005. "Growth during the remainder of last year was flat," he said.
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Aktrin: Canadian spending to grow 4.4% in ?07
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Aktrin: Canadian furniture sales to slow in '07
Jul 29, 2007 -
Aktrin projects slower growth in Canada
Jun 1, 2007 -
Moderating Canadian growth forecast
Jul 16, 2006 -
Moderating Canadian growth forecast
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