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North America HVAC News
International Market Strategy
International strategic market research and consultancy on building product and related markets
World Order Your 2011 Heating and Cooling Reports Now! Canada ENERWORKS Enters Acquisition Agreement Canada Canadian Renovation Market Set to CoolUSA Producer Prices Up, Inflation Seen Muted USA Feinstein Says GOP Bill Would Halt Energy Projects USA EPA Issues Final Rules on Boilers USA Oil Briefly Hits $100 - Highest Since 2008! USA New-Home Sales Fall 12.6% in January
USA The Real Estate Washout That Wasn't
USA USA LENNOX's Revenue Up 9% in 2010
LOWE'S and HOME DEPOT Up in 2010
March 2011
Canada Canada Seen Back on Rate-Hike Path in May
1 Order Your 2011 Heating and Cooling Reports Now!
1 March 2011-- In just over 4 weeks, BRG will be publishing its updatedpreliminary reports on the 2010 heating and cooling markets in many countries ofthe world. To obtain a copy of these ‘product summaries and forecasts’ as soon asthese are made available, we welcome you to place your order now.
The following reports are being published by BRG CONSULT, both in pdf formatand in our new ENTERPRISE database system:
2011 Boiler Market Reports(countries covered: USA, Canada, China, France,Germany, the UK, Italy, Spain, Belgium, Netherlands, Austria, Sweden, Poland,Russia, Czech Republic, Turkey). Boiler types covered in the reports include:
- Wall-Hung Gas Condensing
- Wall-Hung Gas Non-Condensing
- Floor-Standing Gas Condensing
- Floor-Standing Gas Non-Condensing
- Oil Condensing
- Oil Non-Condensing
- Electric
- Solid Fuel
2011 Water Heater Market Reports(countries covered: USA, Canada, China,France, Germany, the UK, Italy, Spain, Belgium, Netherlands, Austria, Sweden,Poland, Russia, Czech Republic, Turkey). Water heaters covered in the NorthAmerican reports include:
- Tankless Gas Condensing
- Tankless Gas Non-Condensing
- Tank/Storage Residential Gas Condensing
- Tank/Storage Residential Gas Non-Condensing
- Tank/Storage Commercial Gas Condensing
- Tank/Storage Commercial Gas Non-Condensing
- Tankless Electric
- Tank/Storage Residential Electric
- Tank/Storage Commercial Electric
- Oil
- Indirect Cylinders Separate
- Solar Storage Tanks
- Hybrid Water Heaters
- Heat Pump Water Heaters
2011 Solar Thermal Market Reports(countries covered: USA, France, Germany,the UK, Italy, Spain, Belgium, Netherlands, Austria, Sweden, Poland, Russia,Czech Republic, Turkey). Products covered in the reports include:
- Flat Plate Collectors
- Vacuum Collectors
- Unglazed Collectors
- Solar Storage Tanks
2011 Heat Pump Market Reports(countries covered: USA, Canada, France,Germany, UK, Italy, Spain, Belgium, Netherlands, Austria, Sweden, Poland,Russia, Czech Republic, Turkey). Products covered in the reports include:
- Ground Source
- Exhaust Air-Water
- Outside Air-Water
- Heat Pump Water Heaters
- Air-to-Air Heat Pumps (where relevant)
2011 Furnace Market Reports(countries covered: USA, Canada) - Productscovered inthe reports include:
- Gas Condensing Furnaces
- Gas Non Condensing Furnaces
- Electric Furnaces
- Oil Furnaces
2011 Air Conditioner Market Reports(countries covered: USA, Canada) –Productcovered in the reports include:
- Condensing Units
- Air Handlers
- Air-Air Heat Pumps
- Residential Package Units
- PTACs
- Mini-Splits
- Window/Wall Units
- Portable Air Conditioners
- VRFs
2011 Radiator Market Reports(countries covered: China, France, Germany, UK,Italy, Spain, Belgium, Netherlands, Austria, Sweden, Poland, Russia, CzechRepublic, Turkey) –Products covered in the reports include:
- Steel Panel
- Towel Warmers
- Aluminium
- Cast Iron
- Decorative
- Other Steel
- Fixed Electric Heat Emitters
2011 Biomass Boiler Market Reports(countries covered: USA, Canada, France,Germany, UK, Italy, Spain, Belgium, Netherlands, Austria, Sweden, Poland,
Russia, Czech Republic, Turkey). Boilers covered in the reports include:
- Fossil Fuel/Universal
- Logwood/Bifuel
- Pellet
- Woochip
- Other
To obtain these product summaries and forecasts, a table of contents, or for moredetails about the report contents or our new Database, please contact us [email protected]
Other regions and countries that we are covering this year:
The Middle East:
- Saudi Arabia
- UAE
- Bahrain
- Qatar
- Kuwait
Other Countries in the Americas
- Mexico
- Brazil
- Argentina
- Chile
- Columbia
To receive more information about the products covered in the Middle East&American (or other country) reports, the publication dates on these, or for furtherquestions, please contact us at [email protected]
Source: BRG CONSULT NORTH AMERICA
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ENERWORKS Enters Acquisition Agreement
14 February 2011-- The board of directors at ENERWORKS, a solar thermaltechnology provider, has agreed to sell 100% of ENERWORKS' shares toPROTERRASOLAR, a solar thermal firm based in Woodstock, Ontario. Finalizing the deal is subject to due diligence and other typical closing matters.PROTERRASOLAR is part of a group of companies that includes TRIGON, aconstruction management firm that has expertise in the solar field. PROTERRASOLARhas already established itself in the solar thermal industry as adistributor and consultant for evacuated-tube solar thermal systems, includingCanada's largest solar cooling project at Oxford Gardens, the companies note. Thebringing together of ENERWORKS'flat-plate technology with ProterraSolar’sevacuated-tube solar thermal products is intended to allow the companies to offerthe best product for each application. The deal is targeted to close on or before March 31. The new company will operateunder the ENERWORKSname and will be based in Woodstock, Ontario.
Source: ENERWORKS
Canadian Renovation Market Set to Cool
19 January 2011 -- CALGARY - Canada's renovation market is set to cool thisyear and a slowdown in activity will reinforce a softer outlook for Canadianhousingmarkets in 2011 with important spillovers to employment, retail sales,manufacturing and credit demand.
A report by senior economist Adrienne Warren, with the Bank of Nova Scotia, saysmost of the contribution of the housing sector to Canadian output growth over thepast decade has come from renovation activity - not from the construction of newhomes or from the transfer costs and services associated with resale transactions.
Warren says expenditures on home improvements and alterations have expandedat close to an eight per cent inflation-adjusted annual rate over the past decade,"easily eclipsing the three per cent yearly rise in new construction or the four percent yearly direct contribution from resale transactions."
"The $44 billion renovation industry now accounts for a record share of housinginvestment - roughly 40 per cent - and overall GDP (of) 2.8 per cent," says Warren.
She says the renovation boom reflects in part the continuing high level of homesales as homeowners typically undertake their largest renovation expenditures inthe first three years following a resale home purchase.
"With home sales having peaked in 2007, the largest share of these new buyerrenovations should be winding down," she says. "At the same time, outlays inrecent years have been considerably higher than would be expected simply givenoverall sales. A return to more typical spending levels per household/resaletransaction would entail a dramatic slowdown in overall renovation expenditures."
Another factor is the end of the temporary federal home renovation tax credit inearly 2010.
But Allistair Elliott, business development manager for MIG Homes in Calgary, saidhe would probably argue against Warren's forecast.
"Certainly over the last two, three years as the economy has gone down therenovation market has gotten busier. We do not find anything slowing down at all,"he said.
"The tax credit certainly got people going. There was a lot of hoops to jump throughwith the tax credit and I don't think people who are doing renovations are going'well, I'm not going to do it because the tax credit is not there anymore'. Anythingfrom renovating bathrooms and kitchens and basements to knocking walls out andextending houses. We're one of those renovators that also build so we have takenon seven custom-builds starting this year. We're getting busier and busier."
According to Canada Mortgage and Housing Corp., the average expenditure byhouseholds undertaking home renovations in 2009 was just over $12,000 inCanada.
Lai Sing Louie, regional economist in Calgary with the CMHC, said the most recentdata for home alterations and improvements in Alberta is $1.039 billion in the thirdquarter of 2010 which is up 8.7 per cent from the third quarter of 2009.
Year-to-date to the third quarter of 2010, alterations and improvements reached$3.150 billion dollars an increase of 7.7 per cent from $2.925 billion during thesame period in 2009.
"Mortgage insurance rules are changing for 2011 in terms of your refinancing.Some people refinance and take out money to renovate their house. The maximumamount that you can take out has been reduced from 90 per cent to 85 per cent.That will probably have some impact on renovation spending," said Louie.
Warren says the economic and financial landscape is becoming less conducive tocontinued strong expansion in renovation spending because of moderating homesales and prices, a levelling off in home ownership rates, high household debtloads, (eventual) rising interest rates and more stringent mortgage financing rules.
She also says a recent survey from the Altus Group and Ipsos Reid indicatesrenovation intentions for 2011 have fallen to their lowest level in almost a decade.
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"Less than 10 per cent of households are planning a major renovation, defined ascosting $5,000 or more, in the coming year, compared with a peak of almost 18 percent in mid-2009," she adds.
Last fall, the RBC 2010 Home Renovation Survey said 58 per cent of Albertahomeowners plan to renovate within the next two years, slightly lower than thenational average (62 per cent) and down from 64 per cent last year and 74 per centin 2008.
And a report in June last year by the CMHC said the average expected cost of arenovation in Calgary in 2010 year was $13,256 - the highest in the country and$1,825 more than the national average.
It said Albertans spent close to $5.3 billion in renovations in 2009, up 2.1 per centthe year before.
Source: www.calgaryherald.com
Producer Prices Up, Inflation Still Seen Muted
16 February 2011-- Core wholesale prices rose in January at their fastest rate inmore than two years, raising some concerns about inflation, but economists saidthe recovery was too weak for a big spike in consumer prices.
The core producer price index, which excludes food and energy costs, increased0.5 percent, the biggest advance since October 2008, the Labor Department saidon Wednesday. Economists had expected a 0.2 percent gain.
Investors viewed the figures somewhat warily and bond prices slipped. Economists,however, said it was too soon to panic about inflation with stubbornly highunemployment keeping labor costs subdued.
"The question is whether we are seeing a limited pass-through of commodity pricehikes or the beginnings of an inflationary spiral," said Nigel Gault, chief U.S.economist at IHS Global Insight in Lexington, Massachusetts.
"Wages will be the thing to watch -- there won't be an inflationary spiral unlesswage inflation picks up."
The rise in core PPI reflected a jump in drug prices, which accounted for 40 percentof the increase.
Other reports on Wednesday indicated that while growth may be quickening, therecovery remains uneven. Industrial production edged down in January andhousing construction continued to bounce along the bottom. But bad weather mighthave distorted the industrial output data.
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Stocks gained on strong earningsfrom technology bellwether Dell and a deal forSanofi-Aventis SA to buy Genzyme Corp for $20.1 billion in cash.
NO PASS-THROUGH TO CONSUMERS
The rise in core PPI comes at a time when a surge in commodity prices has causedmany economies to raise red flags on inflation.
The U.S. Federal Reserve has so far shown little concern about price pressuresand officials have repeatedly said core consumer inflation remains too low. Thecentral bank is widely expected to complete its planned purchases of $600 billion ingovernment bonds to assist the recovery.
Minutes of the Fed's January 25-26 policy meeting released on Wednesdayshowed officials expected inflation to stay subdued and "measures of core inflationwould remain close to current levels in coming quarters.
Most economists agree with the Fed's stance on prices. The government isexpected to report on Thursday that core consumer prices rose 0.1 percent inJanuary from December.
"Yes, we are seeing input prices go up, companies are seeing those, but they arehaving a hard time passing them on. There is still a lot of slack in the economy,whether it's high unemployment or high office vacancies," said John Canally, aneconomist at LPL Financial in Boston.
"The economy is 80 percent services. Economy-wide, raw materials or commodityprices only account for something like 5 percent of input costs and labor is 70percent."
Source:www.reuters.com
Feinstein Says GOP Bill Would Halt Energy Projects
16 February 2011-- WASHINGTON - Dozens of renewable energy projects aroundthe country, mostly in the West, would be unable to get off the ground if HouseRepublicans are successful in scaling back a program that helps companies obtainfinancing for solar, wind and geothermal plants, critics of the proposal said.
California Sen. Dianne Feinstein told colleagues in a letter released Wednesdaythat the changes sought would essentially prevent the Department of Energy fromfinalizing all of the renewable energy applications under review for loan guarantees.The guarantees act as a promise by the government to back a loan if the companycan't make good on it and can also help the company obtain federal financing.
The Democratic lawmaker estimated that at least 31 projects around the countrywould likely be scuttled if the legislation became law.
"The firms have lined up $9 billion in equity investment from the private sector andhave spent hundreds of millions of dollars to date on application fees and projectdevelopment," Feinstein said. "Much of that would be lost."
While the GOP effort would save more than $1.4 billion, that money had thepotential to finance more than $36 billion worth of energy projects, her staff said.
The House is considering legislation to fund the federal government through Sept.30. As part of their budget proposal, GOP lawmakers want to cut the loan-guarantee program mostly by rescinding unspent stimulus dollars.
The legislation could have a difficult time in the Senate, where several powerfullawmakers, including Senate Majority Leader Harry Reid, are big proponents ofsolar power development.
A trade group representing solar energy producers told House Speaker JohnBoehner in a letter that the legislation "would likely kill all clean energy projects withpending DOE loan guarantee applications, causing the loss of tens of thousands ofjobs and many other benefits," said Rhone Resch, president and CEO of the SolarEnergy Industries Association.
Boehner's office did not respond immediately to a request for comment.
California has dozens of projects in the pipeline that are eligible to get loanguarantees, while Arizona and Nevada also have a large stake in the program.
Michael Whalen, chief financial officer for SolarReserve, a California-basedcompany, said the loan guarantees will be essential for his company to obtainfinancing for the construction of 2 solar energy plants - one in Riverside CountyCalifornia and the other in Nye County, Nev.
The two projects each would entail about 670 jobs during construction and 40 to 50workers for operating the plants. The company projects that the Nevada plantwould power up to 75,000 homes in peak electricity periods and the California plantwould power up to 68,000 homes.
"This is just now the point in which the Department of Energy program is reallybeginning to bear fruit," Whalen said. "At this late stage to say, `we're notinterested in doing this anymore' would be devastating."
Congress created the loan guarantee program in 2005. Industry officials havefrequently complained that the loan guarantee process has been excruciatinglyslow. Federal auditors also found last year that the Department of Energy was nottreating all applicants consistently."
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Source: www.8newsnow.com
US EPA Issues Final Rules on Boilers, Incinerators
23 February 2011-- WASHINGTON– In response to federal court orders requiringthe issuance of final standards, the U.S. Environmental Protection Agency (EPA) isissuing final Clean Air Act standards for boilers and certain incinerators thatachieve significant public health protections through reductions in toxic airemissions, including mercury and soot, but cut the cost of implementation by about50 percent from an earlier proposal issued last year. Mercury, soot, lead and other harmful pollutants released by boilers andincinerators can lead to developmental disabilities in children, as well as cancer,heart disease, aggravated asthma and premature death in Americans. Thesestandards will avoid between 2,600-6,600 premature deaths, prevent 4,100 heartattacks and avert 42,000 asthma attacks per year in 2014. In response to a September 2009 court order, EPA issued the proposed rules inApril 2010, prompting significant public input. The proposed rules followed a periodthat began in 2007, when a federal court vacated a set of industry specificstandards proposed during the Bush Administration. Based on the public inputreceived following the April 2010 proposal, EPA made extensive revisions, and inDecember 2010 requested additional time for review to ensure the public’s inputwas fully addressed. The court granted EPA 30 days, resulting in today’sannouncement. Based on input from key stakeholders including the public, industry and the publichealth communities, today’s announcement represents a dramatic cut in the cost ofimplementation, while maintaining maximum public health benefits. As a result,EPA estimates that for every dollar spent to cut these pollutants, the public will seebetween $10 to $24 in health benefits, including fewer premature deaths. The agency received more than 4,800 comments from businesses andcommunities across the country in response to the proposed rules. Public inputincluded a significant amount of information that industry had not provided prior tothe proposal. Based on this feedback, and in keeping with President Obama’sexecutive order on regulatory review, EPA revised the draft standards based on therequested input to provide additional flexibility and cost effective techniques–achieving significant pollution reduction and important health benefits, whilelowering the cost of pollution control installation and maintenance by about 50percent, or $1.8 billion. "The Clean Air Act standards we are issuing today are based on the best availablescience and have benefitted from significant public input," said Gina McCarthy,assistant administrator for EPA’s Office of Air and Radiation. “As a result, they putin place important public health safeguards to cut harmful toxic air emissions that
affect children’s development, aggravate asthma and cause heart attacks at costssubstantially lower than we had estimated under our original proposal." Because the final standards significantly differ from the proposals, EPA believesfurther public review is required. Therefore, EPA will reconsider the final standardsunder a Clean Air Act process that allows the agency to seek additional publicreview and comment to ensure full transparency. EPA’s reconsideration will coverthe emissions standards for large and small boilers and for solid waste incinerators.EPA will release additional details on the reconsideration process in the near futureto ensure the public, industry and stakeholders have an opportunity to participate. About 200,000 boilers are located at small and large sources of air toxic emissionsacross the country. The final standards require many types of boilers to followpractical, cost-effective work practice standards to reduce emissions. To ensuresmooth implementation, EPA is working with the departments of Energy (DOE) andAgriculture (USDA) to provide the diverse set of facilities impacted by the standardswith technical assistance that will help boilers burn cleaner and more efficiently.DOE will work with large coal and oil-burning sources to help them identify cleanenergy strategies that will reduce harmful emissions and make boilers run moreefficiently and cost-effectively. In addition, USDA will reach out to small sources tohelp owners and operators understand the standards and their cost and energysaving features. The types of boilers and incinerators covered by these updated standards include: · Boilers at large sources of air toxics emissions: There are about 13,800 boilerslocated at large sources of air pollutants, including refineries, chemical plants, andother industrial facilities. These standards will reduce emissions of harmfulpollutants including mercury, organic air toxics and dioxins at some of the largestpollution sources. EPA estimates that the costs of implementation have beenreduced by $1.5 billion from the proposed standard. Health benefits to children andthe public associated with reduced exposure to fine particles and ozone from theselarge source boilers are estimated to be $22 billion to $54 billion in 2014. · Boilers located at small sources of air toxics emissions: There are about 187,000boilers located at small sources of air pollutants, including universities, hospitals,hotels and commercial buildings that may be covered by these standards. Due tothe small amount of emissions these sources are responsible for, EPA has limitedthe impact of the final rule making on small entities. The original standards forthese have been dramatically refined and updated to ensure maximum flexibility forthese sources, including for some sources, revising the requirement from maximumachievable control technology to generally available control technology. The costreduction from the proposed standard to the final is estimated to be $209 million. · Solid waste incinerators: There are 88 solid waste incinerators that burn waste ata commercial or an industrial facility, including cement manufacturing facilities.These standards, which facilities will need to meet by 2016 at the latest, will reduceemissions of harmful pollutants including mercury, lead, cadmium, nitrogen dioxide
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and particle pollution. The cost reduction from the proposed standard to the final isestimated to be $12 million. In separate but related actions, EPA is finalizing emission standards for sewagesludge incinerators. While there are more than 200 sewage sludge incineratorsacross the country, EPA expects that over 150 are already in compliance. Thesestandards will reduce emissions of harmful pollutants including mercury, lead,cadmium, and hydrogen chloride from the remaining 50 that may need to leverageexisting technologies to meet the new standards. EPA has also identified which non-hazardous secondary materials are consideredsolid waste when burned in combustion units. This distinction determines whichClean Air Act standard is applied when the material is burned. The non-hazardoussecondary materials that can be burned as non-waste fuel include scrap tires managed under established tire collectionprograms. This step simplifies the rules and provides additional clarity and directionfor facilities. To determine that materials are non-hazardous secondary materialswhen burned under today’s rule, materials must not have been discarded and mustbe legitimately used as a fuel. The agency recognizes that secondary materials are widely used today as rawmaterials, as products, and as fuels in industrial processes. EPA believes that thefinal rule helps set protective emissions standards under the Clean Air Act. The emissions standards for sewage sludge incinerators and the definition of solidwaste are not part of today’s reconsideration.
Source: U.S. Environmental Protection Agency
Oil Briefly Hits $100 - Highest Since 2008
23 February 2011-- NEW YORK -- U.S. oil prices briefly hit the $100-a-barrel forthe first time in over two years Wednesday, as reports of Libyan oil productionshutdowns swirled.
Italian oil giant Eni said Wednesday that it had partially shut down its 150,000-barrel-per-day production in the North African country.
Andrew Lebow, an oil broker at MF Global in New York, said the unrest has alreadycut Libya's production by 300,000 barrels.
"But 300,000 barrels could be just the beginning," he said. "The situation is verychaotic and it's difficult to get good information, but the market is anticipating thatmore production will be lost."
Libyan oil production grinding to a halt
Oil industry executives told the Financial Times that half of Libya's production hasbeen shut down. But Eni said those reports couldn't be confirmed.
After hitting $100 a barrel earlier in the day, crude futures for April delivery endedthe day up $2.68, or 2.8%, to $98.10 a barrel.
Brent crude, the European benchmark oil price, rose $5.72, or 5%, to $111.50 abarrel in extended trading.
Oil prices have surged this week as violence spread in Libya, the latest country tobe swept up in a wave of anti-government protests that started earlier this year inTunisia.
The rally continued Tuesday, as investors in the United States returned to workfollowing the Presidents Day holiday and Libyan leader Moammar Gadhafi took ahard line -- insisting that he is still in power and cracking down on the opposition.
Why the oil market is nervous
Libya, which exports 1.6 million barrels of crude per day, is the first oil exportingnation to be affected by the unrest in the Arab world. While it is the third-largestproducer in Africa, Libya only provides 2% of the oil that the world consumes on agiven day.
Prices have been driven higher by speculation that the unrest in North Africa couldspread to oil rich nations in the Middle East.
"The market remains on edge that tensions will migrate across the Middle East,and toward major oil producer Saudi Arabia," said Tom Pawlicki, an energy analystat MF Global. "A spreading of potential revolution elsewhere in the Middle Eastmay continue to boost oil prices in the near-term."
The International Energy Agency, which was formed to protect against globalenergy supply disruptions, sought to ease those concerns Tuesday.
The agency said it has strategic stockpiles of 1.6 billion barrels of crude, addingthat the Organization of the Petroleum Exporting Countries could also pump moreoil if need be.
But analysts at Deutsche Bank said in a research report Wednesday that theamount of spare oil currently available in the world may not be enough to offset awidespread supply disruptions in the region.
"The market is rightly nervously watching the Gulf of Arabia situation," wroteDeutsche Bank analysts. "It now comprises the entirety of global oil productionspare capacity; depending on your view of Venezuela and Nigeria."
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Source: money.cnn.com
New-Home Sales Fall 12.6% in January
24 February 2011-- WASHINGTON — Sales of new U.S. homes fell in January,almost completely retracing the strong gain seen in December, the CommerceDepartment estimated Thursday.
Sales dropped 12.6% last month to a seasonally-adjusted annual rate of 284,000.Economists had been expecting a pace of 300,000.
For December, sales were up a revised 15.7% to a 325,000 level, compared withthe previous estimate of a 17.5% rise to 329,000.
Economists had been leery of the initially reported surge, attributing much ofDecember’s gain to home buyers who rushed to take advantage of a tax break inCalifornia that expired at the end of 2010.
The less volatile three-month average edged up to 297,000 from 295,000.
Regional Breakdown for January
In the West, sales pulled back in January, falling 36.5% to 66,000 units after a62.5% jump in December.
Sales also fell 12.8% in the South to a record low 143,000. Analysts wereexpecting weak sales in the region due to several severe winter storms during themonth.
Those declines were partially offset by a 54.5% rise in the Northeast and a 17.1%gain in the Midwest.
Compared with January 2010, last month’s sales were down 18.6%.
Economists say new-home sales have remained in a relatively narrow range formonths. Activity is expected to pick up this spring, but economists see no earlyhints of a pickup in activity.
In January, the number of unsold new homes on the market slipped 0.5% to188,000, the fewest since December 1967. That represented a 7.9-month supply atthe January sales pace, up from 7.0 in December.
The inventory of completed-but-unsold homes fell to 78,000, down about 21.2% inthe past year.
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The median sales price of $230,600 in January was up 5.7% compared with a yearearlier.
New-home sales are reported when a contract is signed, not at the closing of thesale.
The government cautions that its housing data are subject to large sampling andother statistical errors. Large revisions are common.
On Wednesday, the National Association of Realtors reported that sales of existingU.S. homes rose a seasonally adjusted 2.7% in January, the fifth rise in six months,as buyers snapped up cheaper homes.
In a separate report Thursday, the government said orders for durable goods rose2.7% in January, largely as a result of an increase in orders for civilian aircraft.
In addition, initial claims for state unemployment insurance fell 22,000 to 391,000 inthe latest week.
Source: MarketWatch.com
Canada Seen Back on Rate-Hike Path in May
24 February 2011 -- TORONTO - The Bank of Canada's first interest rate hike of2011 is widely expected in May as a pickup in the country's resource-rich economyoffsets the drag of a strong currency and risk from Libya's revolt and other globalevents. The central bank is expected to raise its key rate to 1.25 percent on May31 from 1 percent after holding it steady at its March 1 and April 12 policy-announcement dates, according to the median forecast of a Reuters poll ofeconomists and strategists released on Thursday.
"There are certainly signs that the U.S. is doing a bit better, so we think Canada isgoing to get a dividend from that early in 2011," said Peter Buchanan, senioreconomist at CIBC in Toronto. "The (central) bank does take a forward-lookingview. ... They do think they have to ward off the potential threat of inflation, not onein the next few months mind you, but over the next year or two."
The poll showed all 39 forecasters expect the bank to stand pat on rates at itsMarch 1 policy-setting date, giving a 90 percent median probability that the keypolicy rate will stay at 1 percent. That is still well above the zero to 0.25 percenttarget range for the U.S. federal funds rate. But 24 of 39 forecasters, more than 60percent, expect Canadian interest rates to rise by the end of the first half. Theresults were similar to a recent Reuters poll of Canada's 12 primary securitiesdealers.
The Bank of Canada, jumping ahead of its Group of Seven peers, began raisingrates from a record low 0.25 percent last June. It halted the campaign in
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September after three increases on concern about the durability of the U.S.economic recovery and debt troubles in Europe.
Lingering concerns about growth in developed economies, combined with theshock of recent revolts in North Africa, are expected to keep the central bank onthe sidelines for now. Optimism about the domestic economic outlook hasincreased, however, helped by data such as December's trade report. The reportshowed soaring exports of oil and other energy products tipped Canada's tradebalance into surplus after nine months of deficits. While surging exports suggeststrong economic growth in the fourth quarter and improving momentum, the tameinflation outlook will allow the Bank of Canada to move cautiously, said RobCarnell, chief international economist at ING.
"A rate hike at the May meeting, sitting nicely between the release of U.S. andCanadian (first-quarter) GDP reports in April/May, and the likely end to the Fed's(quantitative easing) policy in June looks appropriate," he said.
Canada's annual inflation rate slipped to a relatively tame 2.3 percent in January asa strong currency helped it buck a global trend that has seen several major nationsstruggle to control rising prices. Still, with the economy recovering and food andenergy prices on the rise globally, forecasters said the Bank of Canada will notwant to keep rates near record lows for much longer.
"Inflation is the major theme in FX markets this year, with most central banksforced to raise rates by year-end. The Canadian economy is strong enough toshoulder higher rates without a materially negative impact on exports and growth,"said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.
The median view of the poll shows forecasters expect the Bank of Canada to raiserates by another 25 basis points on September 7 and double rates from currentlevels to 2 percent by year-end. The key policy rate is seen reaching 3 percent bythe end of 2012.
"While they will step on the brakes, it's going to be a gradual push on the pedal,rather than abrupt deceleration," CIBC's Buchanan said
Source: www.reuters.com
The Real Estate Washout That Wasn't
10 February 2011-- From Manhattan office towers to Florida apartment buildings toretail properties in Washington, commercial real estate values are rising, defyingpredictions made as recently as February 2010 of a collapse that would drag theU.S. economy back into recession. Prices of commercial properties sold byinstitutional investors surged 19 percent in 2010, the second-biggest gain onrecord, according to an index developed by the MIT Center for Real Estate.
Near-record-low interest rates mean buyers can get cheap financing, whichimproves their returns. At the same time, rising earnings give banks a cushion toabsorb losses, enabling them to sell distressed properties rather than hang on tothem. Investors, convinced the worst is over, have pushed prices on bonds backedby commercial mortgages to the highest level in two years. Says Dan Fasulo,managing director at New York-based Real Capital Analytics: "Now that values areon the upswing, it's given owners and lenders more wiggle room to work out thesetroubled situations."
Those taking advantage of improving conditions include Vornado Realty Trust(VNO), which in December resolved a standoff with its lender by paying $115million to buy the $171.5 million loan on its Springfield Mall in a Virginia suburb ofWashington. The loan had been transferred to a special servicer a year earlierbecause the New York-based real estate investment trust was in danger of"imminent default" on the property, according to Fitch Ratings.
In downtown Fort Lauderdale, a market damaged by declining home values, USAAReal Estate bought Las Olas Centre, a 469,000-square-foot office complex thathad been seized by lender Wells Fargo (WFC). USAA Real Estate, based in SanAntonio, paid $170 million in September; the previous owner spent $231 millionnear the top of the market in July 2007, according to Real Capital.
In February 2010, the Congressional Oversight Panel of the Troubled Asset ReliefProgram warned that a deteriorating commercial real estate market had thepotential to wreck the U.S. economy. It estimated that almost half the $1.4 trillion incommercial property loans set to be paid off by 2014 were underwater, meaningthe borrower owed more than the property was worth. Unless refinanced, the debt"could threaten America's already weakened financial system," the panel said in areport.
New York, Washington, and Boston are among the cities leading the recovery asemployment growth and large inventories of properties with a lot of rent-payingtenants attract investors.
Market segments including hotels, apartments, and retail are also on the rise. Ahotel rebound started last year, with the average occupancy rate in the top 25 U.S.markets rising to 64 percent from 60 percent in 2009, according to Smith TravelResearch in Hendersonville, Tenn. Sales of apartment buildings nationwide rose inthe fourth quarter as homeownership remained at a 10-year low and demand forrentals pushed lease rates to the highest in four years, according to Axiometrics, aDallas-based research company. Of the $52 billion of retail properties to fall intodefault, just over half have completed workouts, "giving the retail sector thedistinction as the first property type to pass the halfway point in resolving itsdistress," Real Capital analysts wrote in a January report.
"That tsunami of distress that had been forecast has not really materialized," saysBrian Stoffers, co-president of CBRE Capital Markets, a financing and investment
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sales division of Los Angeles-based broker CB Richard Ellis Group. "The market'sgetting stronger."
Source:www.businessweek.com
LENNOX's Revenue Up 9% in 2010
11 February 2011-- HVAC producer LENNOX INTERNATIONAL INC. reportedfourth quarter 2010 revenue of $762 million, up 4% from fourth quarter 2009. Totalsegment profit margin was 6.4%, down from 7.1% in 4Q 2009, primarily due tohigher commodity costs.
For full year 2010 revenue was $3.1 billion, up 9% from 2009, while total segmentprofit margin was up 120 basis points to 7.0%.
"Each of our businesses returned to growth in 2010, and overall company revenuewas up 9% for the full year," said Todd Bluedorn, CEO of LENNOXINTERNATIONAL. "In the fourth quarter, revenue growth was led by ourResidential business, up 9% despite the tougher comparison against the fourthquarter a year ago."
Bluedorn said 4Q results were affectively negatively by higher commodity costs."For 2011, we now expect $40-45 million of commodity headwind, with the year-over-year comparison more difficult in the first half." He said LENNOX has takenpricing actions for 2011. "Looking at 2011 overall, we expect end market conditionsto continue to show improvement, and we reiterate our guidance range for organicrevenue growth of 5-8%," he said.
LENNOX said that, in addition to the expected organic revenue growth of 5-8% in2011, it expects an additional 6 points of growth from the acquisition ofKysor/Warren, which closed on Jan. 14, 2011, resulting in total revenue growthguidance of 11-14% for 2011.
LENNOX's Residential Heating and Cooling business reported 4Q 2010 revenue of$349 million, up 9% from $321 million in 4Q 2009, and reported profits of $34million, down 12% from $38 million in 4Q 2009. For full year 2010, ResidentialHeating and Cooling reported revenue of $1,417 million, up 10% from $1,293million in 2009, and reported 2010 segment profit of $132 million, up 18% from$112 million in 2009.
LENNOX's Commercial Heating and Cooling business reported 4Q 2010 revenueof $148 million, up 2% from $146 million in 4Q 2009, and reported segment profit of$13 million, up 20% from $11 million in 4Q 2009. For full year 2010, CommercialHeating and Cooling reported revenue of $620 million, up 4% from $595 million in2009, and reported segment profit of $69 million, up 41% from $49 million in 2009.
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LENNOX's Service Experts business reported 4Q 2010 revenue of $145 million,down 1% from $146 million in 4Q 2009, and reported segment profit of $5 million,down 28% from $7 million in 4Q 2009. Service Experts reported full year 2010revenue of $590 million, up 10% from $535 million in 2009, and reported segmentprofit of $19 million, up 16% from $17 million in 2009.
LENNOX's Refrigeration business reported 4Q 2010 revenue of $139 million, down3% from $143 million in 4Q 2009, and reported segment profit of $14 million, down13% from $16 million in 4Q 2009.
Refrigeration reported full year 2010 revenue of $551 million, up 7% from $513million in 2009, and reported 2010 segment profit of $61 million, up 26% from $49million in 2009.
Source:www.appliancemagazine.com
LOWE'S and HOME DEPOT Up in 2010
23 February 2011 -- LOWE'S Sales Up 3.4% in 2010
Home improvement retailer LOWE'S had net earnings of $285 million for thequarter ended January 28, 2011, a 39.0% increase from the same quarter a yearago. Sales for the quarter increased 3.1% to $10.5 billion, up from $10.2 billion inthe fourth quarter of 2009.
For the fiscal year ended Jan. 28, 2011, sales increased 3.4% to $48.8 billion.Comparable store sales increased 1.1% for the fourth quarter and increased 1.3%for fiscal 2010.
During the quarter, LOWE'S opened 17 stores and closed two. As of the end of thequarter LOWE'S operated 1,749 stores in the United States, Canada, and Mexicorepresenting 197.1 million square feet of retail selling space, a 2.0% increase overlast year.
23 February 2011 –HOME DEPOT Annual Sales Up 2.8%
Home improvement retailer THE HOME DEPOT reported sales of $15.1 billion forthe fourth quarter of fiscal 2010, a 3.8% increase from the fourth quarter of fiscal2009. Comparable store sales for 4Q2010 were up 3.9% and comp sales for U.S.stores were up 4.8%.
Net earnings in the fourth quarter from continuing operations were $587 million, upfrom $301 million in 4Q 2009.
Fiscal 2010
Sales for fiscal year 2010 were $68.0 billion, up 2.8% from fiscal 2009. Totalcompany comparable store sales for 2010 increased 2.9%, and comps for U.S.stores were up 2.5% for the year.
Consolidated 2010 net earnings were $3.3 billion, compared to $2.7 billion in fiscal2009.
HOME DEPOT updated its fiscal 2011 guidance and now expects sales to be upapproximately 2.5% for the year.
At the end of the fourth quarter HOME DEPOT operated 2,248 retail stores, whichincluded 1,976 stores in the United States, 179 in Canada, 85 in Mexico, and 8 inChina.
Source: www.appliancemagazine.com
