north america bathroom news may 2008 - brg building solutions amer… · international market...

Canada 2008 Canadian Market Research Update: All Bathroom ProductsBrazil DECA acquires AMERICAN STANDARD’s Brazilian plantsUSA Star-Studded 2008 K/BIS Took Windy City By StormUSA 1 in 4 Homeowners To Spend Their Tax Rebate on Home ImprovementUSA PRICE PFISTER Partners With EPA WaterSenseCanada ELKAY Sells Canadian OperationsUSA HD SUPPLY Launches Exclusive Proprietary BrandsUSA AS AMERICAST� Celebrates 20 Years of Lighter LoadsUSA World Record Holder Tom Stoddard Retires from the SPEAKMAN CO.USA HOME DEPOT Cuts Back on Expansion PlansUSA The National Kitchen & Bath Association Names Don Sciolaro CEOUSA FOREMOST GROUPS INC. Introduces New HET Water-Saving ToiletsUSA U.S. Housing Starts Slide to Lowest Level in 17 YearsCanada Condo Boom Drives Canadian Housing Starts

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North America Bathroom NewsMay 2008

International Market Strategy

International strategic market research and consultancy on building product and related markets

BRG Consult NewsletterNorth America Bathroom News May 2008

Canada: 2008 Canadian Market Research Update: All BathroomProductsBRG CONSULT has just completed its 2008 report update on the Canadian bathroom market.

Products covered in this report include:

- Baths (cast iron, steel, synthetic)- Shower Systems (shower modules, gel coat and acrylic integrated baths/showers)- Ceramic Sanitary ware (vitreous china and fireclay products) and alternatives (plastic cisterns)- Faucets, Taps and Mixers- Shower Wall Products (shower enclosures and shower kits)- Hydrotherapy Products (whirlpools, air massage baths, combined systems, hydrotherapy cubiclesand shower towers/panels)

The report analyses the following:

- Market Trends and Forecasts- 2007 Market- Average Prices and Values- Product Segmentation- Distribution Analysis- End Use Segment- Manufacturers Market Shares

as well as covers:

- Background Information on Canada- Distribution Section- Canadian Manufacturers Profiles- Canadian Distributors Profiles

For more information please contact Victor Post or Marie Vermeulen at BRG CONSULT NORTHAMERICA ([email protected], [email protected])

Source: BRG CONSULT NORTH AMERICA

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Brazil: DECA acquires AMERICAN STANDARD’s Brazilian plantsDURATEX, the owner of DECA, announced the acquisition of both AMERICAN STANDARDoperations in Brazil, with plants in S�o Paulo and Rio de Janeiro. A supply agreement has beensigned between DURATEX (DECA DIVISION) and AMERICAN STANDARD. The total productioncapacity of these two industrial units is 1.8 million pieces per year, which increases DECA’s Divisionto 5.6 million pieces per year.

“With the additions of these plants, we will be able to continue to develop our vision making an evengreater contribution to the American marketplace,” said Marcelo Carioni, general manager forDURATEX NORTH AMERICA." This will allow DECA to be even more aggressive in the U.S. market,as well as in its other 40 foreign markets.”

DECA is a leader in metal fittings, high-end sanitary ware, showers and accessories to the Brazlianmarkets. As an important supplier of bathroom fixtures for building construction in Brazil and onforeign markets, DECA competes with the world’s finest manufacturers.

DECA, a division of DURATEX, specializes in developing products with water-saving features andinnovative designs. The company is committed to ensuring that each customer receives not only finedecorative hardware products but also exceptional service. DECA is renowned for its qualityproducts, high technology and design. The company has won important national awards, such as theBrazilian Home Museum Award, as well as foreign awards, like the iF Design Award. It has furtherobtained the ISO 9000 Standard Certification — in its 9002 version — at the Sanitary Ceramics Unitin S�o Leopoldo (RS), as well as at Metais S�o Paulo for Basic Control Taps and at Metais Planidilfor Hydra Valves.

DURATEX is a member of the ITAUSA GROUP, which is ranked among the 500 largest companies inthe world by FORTUNE MAGAZINE and has been exporting its products to Europe and NorthAmerica for more than 40 years.

Source: The Wholesaler

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USA: Star-Studded 2008 K/BIS Took Windy City By StormHACKETTSTOWN, NJ (April 29, 2008) – Filling three halls of McCormick Place for the first time, theannual Kitchen/Bath Industry Show & Conference (K/BIS) brought some of the biggest names in thekitchen and bath industry to Chicago from April 10-13, 2008 for its annual showcase of the newestproducts, appliances, design trends, and cutting-edge industry information. As the largest yearlygathering of kitchen and bath professionals from around the world, K/BIS is the leading destination forthe latest advancements in the kitchen and bath industry.

Owned by the National Kitchen & Bath Association (NKBA), the four-day conference and expofeatured must-see new products, innovative design ideas and the latest trends in kitchens and baths.K/BIS brought together nearly a thousand exhibitors and more than 45,000 attendees, the show’slargest-ever turnout.

“Attendance at this year’s K/BIS continued to be strong,” said Sara Ann Busby, CKD, President of theNKBA. “The increase in attendance supports what we have been saying all year – kitchen and bathprofessionals are still thriving, and the optimism and strength of the industry was tangible in Chicago.”

A complete range of professionals representing the kitchen and bath industry visited the show,including dealers, designers, architects, distributors, and retailers, helping to make this the largestK/BIS yet, and attendees packed the show floor to get a preview of this year’s product and designinnovations. Big-name exhibitors included SEARS, KOHLER, BSH (BOSCH, SIEMENS,THERMADOR, and GAGGENAU), LG ELECTRONICS, SUB-ZERO/WOLF, MOEN, GEAPPLIANCES, VIKING RANGE, BROAN-NUTONE, GROHE, DACOR, HAIER AMERICA,ELECTROLUX, and many other well-known brands in the kitchen and bath industry.

“We came to K/BIS to showcase the latest innovations from all top eight brands available at SEARS,”said Larry Costello, PR Director at SEARS HOLDINGS. “The approach we took is ‘this is the autoshow for appliances, so let’s treat it as such,’ and the response was terrific.”

“This has been an extraordinary year for the kitchen and bath industry,” said Brian Pagel, VicePresident of the Kitchen and Bath Group, the unit within the Nielsen Company that produces K/BIS.“Exhibitors and attendees all come to K/BIS to be in the thick of what’s new and exciting in kitchensand baths, and the show continuously delivers the latest information, trends and products.”

Each year, exhibitors from around the world come to K/BIS to debut the latest in kitchen and bathinnovations, and attendees flock to the show floor to preview the newest products for the homes andprojects of tomorrow. From green and high-end to futuristic and budget-friendly, K/BIS is the ultimatedestination for the latest product introductions and advancements.

Source: www.kbis.com

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USA: 1 in 4 Homeowners To Spend Their Tax Rebate on HomeImprovement ProjectsApril 29th 2008 - Resilient American homeowners intend to shake off concerns about the slumpingreal estate market and plant the money they receive as part of the federal economic stimulus packageinto what for many is their most important financial asset: their homes.

A national consumer opinion survey released today found that 24 percent of U.S. homeowners are"considering using" the money they will receive as part of the federal economic stimulus package toupgrade or improve their homes. In addition, roughly one in five respondents, or 19 percent, said theywould "definitely use" their rebate money for a home improvement project. The survey wasconducted in April by JOHNS MANVILLE (JM), a building and specialty products manufacturer, andOPINION RESEARCH CORP., a market research firm.

"The federal government is hoping that Americans will spend these checks and help stimulate thenation's economy, and this survey confirms that many Americans are prepared to do that, at leastwhen it comes to their homes," said Wayne Russum, senior vice president of OPINION RESEARCHCORP. Among respondents who said they are not considering using their rebate check for a homeimprovement, the most common intended uses were saving it (45 percent), paying down debt (40percent), taking a vacation (14 percent), purchasing a luxury item (9 percent), or something else (5percent).

The tax rebates were created earlier this year by a Congressional bill aimed at encouraging consumerspending in the face of a slumping economy and a weak housing market. The checks started arrivingin taxpayers' bank accounts on Monday. Single taxpayers with annual adjusted gross income of lessthan $75,000 qualify, as do joint filers making less than $150,000.

The telephone survey of 751 American homeowners was conducted from April 11-14 by OPINIONRESEARCH CORP., a national market research firm based in New Jersey, on behalf of JOHNSMANVILLE, an international building materials manufacturer based in Denver. The survey's samplingerror was plus or minus four percentage points.

The survey found that the most popular projects for respondents considering using their rebatechecks for a home improvement project included: household upgrades, including landscaping (23percent) or an upgrade of the bathroom (13 percent) or kitchen (12 percent); improving their homes'energy efficiency, including adding attic insulation (9 percent), caulking or sealing (4 percent), orinstalling energy efficient light bulbs (4 percent); or painting a room (10 percent).

The survey's other key findings included:-- Homeowners between the ages of 25 and 34 were most likely to consider using the rebate checksfor a home improvement (33 percent); homeowners older than 65 were least likely (20 percent).-- Homeowners in the West were most likely to use their rebate check for a home improvement (27percent); homeowners in the South were least likely (22 percent).-- The most common reasons cited for pursuing a home improvement project with the rebate moneywere comfort (34 percent), aesthetics (17 percent), environmental impact (15 percent), resale (13percent), and return on investment (8 percent).-- Among all respondents, 31 percent of homeowners said they are planning to start a homeimprovement project during May, which is National Home Improvement Month.

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"Clearly, many homeowners agree that investing in their homes can improve their quality of life andprovide a solid return on investment," said Mark Ziegert, JM's senior brand manager for buildinginsulation products. "People who use their rebate check to improve their home's energy efficiency notonly enhance the comfort of their home, they will achieve cost saving in both the winter and summerthrough improved energy efficiency, and they may increase the resale value of the home."

Source: www.marketwatch.com

USA: PRICE PFISTER Partners With EPA WaterSenseKitchen and bath fixture manufacturer PRICE PFISTER announced its new partnership with the U.S.Environmental Protection Agency’s WaterSense� program to help consumers save water for futuregenerations and reduce costs on their utility bills.

The company’s ASHFIELD™ collection of lavatory trough faucets is the first in a new lineup of PRICEPFISTER product families ― ECO-PFRIENDLY™ ― designed to wear the EPA’s WaterSense label.ASHFIELD lav faucets flow at a rate of 1.5 gpm, and are designed to reduce water consumption by 30percent without compromising the consumers’ water experience. According to the company, theadoption of water-efficient products can save the average household approximately 30,000 gallons ofwater per year.

“PRICE PFISTER proudly supports initiatives like the WaterSense program that promote eco-friendlypractices to help in water conservation,” said Greg Williamson, PRICE PFISTER’S vice president ofmarketing. “It is important for our company to implement change and raise awareness of water-related environmental issues, and we hope that our partnership with the EPA will help educateconsumers on choosing earth-friendly products.”

The goal of WaterSense is to decrease consumers’ indoor and outdoor water use by promoting high-efficiency products and simple water-saving practices.

Source: Supply House Times

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Canada: ELKAY Sells Canadian OperationsELKAY PLUMBING PRODUCTS DIVISION (PPD) president Steve Rogers announced that thecompany has completed the sale of its ELKAY CANADA LTD. operations to NOVANNI STAINLESSINC. NOVANNI STAINLESS INC. is a newly formed company owned by OAKVILLE STAMPINGAND BENDING LTD. (OS&B), founded in 1975, and SUPREME METAL PRODUCTS INC., foundedin 1985. OS&B, a privately held company, is one of Canada’s largest manufacturers of overflows,traps, lavatory drains, tubular brass fittings and flexible supply hoses. SUPREME METALPRODUCTS INC., also a privately held company, is one of Canada’s largest manufacturers of sinkstrainers.

NOVANNI STAINLESS INC. will continue to serve ELKAY CANADA LTD.’s Canadian customers bymanufacturing WESSAN, AMI and other ELKAY branded products in the Coldwater, Ont., facility anddistributing ELKAY branded products throughout Canada as ELKAY’s exclusive distributor.

“We clearly see this move as the best strategy for ELKAY to continue to grow in the Canadianmarketplace. This sale enables ELKAY to continue to distribute high-quality products to our Canadiancustomers,” noted Rogers. “We are also pleased that NOVANNI STAINLESS INC. shares one ofELKAY's core values — employees are a company’s most important asset. We are thrilled we wereable to ensure the jobs of our Canadian employees.”

Source: The Wholesaler

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USA: HD SUPPLY Launches Exclusive Proprietary BrandsSEASONS&BRIGADEHD SUPPLY, a wholesale distributor focusing solely on serving the supply needs of professionalcustomers in the infrastructure & energy, maintenance, repair & improvement and specialtyconstruction markets, today announced the launch of its two new proprietary brands, SEASONS andBRIGADE. The SEASONS brand will be carried on products such as kitchen and bath fixtures andceiling fans, ultimately used by consumers, while BRIGADE will be carried on heavy duty products,such as tools and hardware, ultimately used by professional contractors and trades people on the job.

“As a large, market-leading company, we are constantly looking for ways to create value for ourprofessional customers,” said Arleen Qui�ones, HD SUPPLY VP of Marketing and Communications.“Through the SEASONS and BRIGADE brands, we are able to offer our customers additional productoptions with the same level of quality, reliability and performance they are accustomed to receiving.”

SEASONS branded products are positioned in the “better” quality tier; products with elevated featuresand functionality in the “best” quality tier carry the SEASONS Gold brand. BRIGADE is used withbetter quality professional-grade products, and BRIGADE 5-Star is reserved for best quality products.Currently, SEASONS and BRIGADE branded products are primarily being sold through HDSUPPLY’s Facilities Maintenance, Plumbing and White Cap businesses.

“The launch of these new proprietary brands is a cornerstone to HD SUPPLY’s long-term growth andvalue creation story and clearly differentiates us in the marketplace,” continued Qui�ones. “Weprovide added value to our customers by filling a product assortment gap and expanding productselection.“

To ensure the integrity of proprietary branded products, HD SUPPLY has implemented rigorousscreening processes to ensure both the supplier and product meet specific requirements.Independent third-party audits of suppliers are conducted to confirm business practices are sociallyand environmentally responsible, and that production capacity, process capabilities and qualityassurance systems dependably deliver a consistent product. Thorough product testing, conducted byexpert third parties, assesses safety, performance and adherence to exact specifications. HDSUPPLY also carries extensive liability and warranty coverage on all its proprietary branded products.

“We take quality extremely seriously,” said Qui�ones. “We want to instill the utmost confidence in ourcustomers that they are receiving top-performing, reliable products that HD SUPPLY stands firmlybehind.”

Source: www.hdsuppply.com

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USA: AS AMERICAST� Celebrates 20 Years of Lighter LoadsCHICAGO, KITCHEN/BATH INDUSTRY SHOW April 11, 2008 - AMERICAST, AMERICANSTANDARD’s beautifully durable lightweight alternative to cast iron, turns 20 this year, still goingstrong in bathtubs, kitchen sinks, and making installation a whole lot easier. AMERICAST is half theweight of cast iron with the same structural thickness and rich enamel colors, and offers superior heatretention and sound absorption. Pioneered following seven years of research and development,AMERICAST’s unique three-layer construction consists of a smooth porcelain-enamel finish on high-quality alloy, backed by an injection-molded structural composite. The composite material helpsprotect the porcelain finish from surface chipping and crazing caused by reverse impact damage.AMERICAST’s composition gives products a tight radius at corners for maximum useable space intubs and sinks. AMERICAST debuted in 1988 with the continually popular PRINCETON Bathtub,now available in six models accented with such details as a 6-inch-wide Luxury Ledge opposite theapron for holding toiletries. AMERICAST is also the ingredient behind AMERICAN STANDARD'spopular line of SILHOUETTE Kitchen Sinks. A range of fashion colors completes the design andinstallation flexibility. AMERICAST is manufactured exclusively at AMERICAN STANDARD’smanufacturing plant in Salem, OH.

Source: www.americanstandard-us.com

USA: World Record Holder Tom Stoddard Retires from theSPEAKMAN CO.SPEAKMAN CO. announced that Tom Stoddard, aged 96, has announced his retirement after 80years of working for the company. Stoddard received a certificate from the Guinness Book of WorldRecords for his employment record. He started working at SPEAKMAN CO. on Feb. 16, 1928, as anerrand boy and timekeeper, and retired Feb. 15, 2008. Stoddard will continue to serve on the boardof directors for the company.

When asked (in 2003) how he achieved his historic accomplishment (75 years then), Stoddardanswered: “It’s easy. You start work at 16 and retire at 91.”

The SPEAKMAN COMPANY was founded in 1869 as a plumbing pipefitting company. Retaining itsindependent and privately held status, SPEAKMAN has forged a reputation for continuous productinnovation and quality leadership. An acknowledged leader in specification quality plumbing fittingsand electronic faucets, SPEAKMAN pioneered water bearing safety equipment more than 50 yearsago, and led the market transformation into modern-day showering over 75 years ago. The ShowerProducts Business Unit offers a wide range of showerheads, hand held showers and accessories forresidential, hotel and commercial markets.

Source: Supply House Times and www.speakmancompany.com

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USA: HOME DEPOT Cuts Back on Expansion Plans30th April 2008 - With its sales and profit battered by the declining U.S. housing market, HOMEDEPOT INC. said Thursday that it will slow new-store growth, abandoning plans to add about 50 U.S.stores in its pipeline to save cash for existing stores.

The Atlanta-based company also will close 15 U.S. locations, less than 1% of its store count, deemednot performing up to expectations. The world's largest home-improvement retailer will take chargestotaling $586 million, most of which will be recognized in the first quarter of fiscal 2008.

Excluding the charges, HOME DEPOT said full-year profit per share from continuing operations isexpected to drop 19% to 24%, in line with the company's prior forecast. Analysts have beenexpecting HOME DEPOT's profit for fiscal 2008 -- ending Feb. 1, 2009 -- to decline to $1.77 a sharefrom $2.27 a share last year, according to an average of estimates compiled by FACTSETRESEARCH.

The reiteration of the forecast "is a modest positive, given the challenging backdrop," saidGOLDMAN, SACHS & CO. analyst Matthew Fassler.

HOME DEPOT and rival LOWE's COS. have been hurt by the weakening credit and housing marketsthat has cut into demand for their building and home-good supplies. In addition to scaling back storegrowth, HOME DEPOT has said it would slow the pace of buybacks under its $22.5 billion stock-repurchase plan amid market uncertainties.

Source: MarketWatch

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USA: The National Kitchen & Bath Association Names Don SciolaroCEO

CHICAGO (April 11, 2008) - The National Kitchen & Bath Association (NKBA) has announced at theNKBA's annual Kitchen/Bath Industry Show & Conference (K/BIS�) that after a thorough and involvedprocess, Don Sciolaro has been unanimously approved by the Board of Directors to be theAssociation's Chief Executive Officer.

Sciolaro joined the NKBA in 2006 as Director of Member Services, where he excelled in increasingmembership and strengthening the NKBA's local chapter programs. He oversaw the recruiting,retention, and recognition of NKBA members worldwide.

"Don has been a terrific leader for the Association over the past two years, so appointing him as theNKBA's CEO was a clear decision," said 2008 NKBA President Sara Ann Busby, CKD. "With Don'svision and ability to meet lofty goals, I'm sure he's going to take the Association to places we've neverdreamed of. With Don as CEO, I'm very excited about the future of the NKBA."

Prior to his service to the NKBA, Sciolaro spent 15 years with America's largest industry tradeassociation, the National Association of Manufacturers, most recently as Senior Regional Manager forthe group's largest division, the New York/New Jersey region. He was responsible for membershipand organizing grassroots public affairs efforts. Sciolaro arranged sessions with members ofCongress and association members to educate lawmakers on key issues.

Source: www.nkba.org

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USA: FOREMOST GROUPS INC. Introduces New HET Water-Saving ToiletsFOREMOST GROUPS, INC, a manufacturer of home furnishing products, has released a line ofHigh-Efficiency toilets designed to conserve water amidst anticipated widespread droughts in the nearfuture.

According to a recent U.S. Government Accountability Office survey, 36 states anticipate watershortages by the year 2013. FOREMOST GROUPS INC. realizes the severity of this problem andhas been focusing on producing products that aid in water conservation. In response to theseexpected water shortages, FOREMOST is producing new low-consumption and Dual Flush water-saving toilets. The company believes that creating and maintaining a healthy and strong environmentshould be a priority.

A standard toilet can account for 25% of water usage within the average home, and a leaky fixturecan waste up to 200 gallons of water a day. By replacing a toilet that dates from before 1993 with alow-consumption or Dual Flush model, you can conserve up to 80% of the water that was beingflushed away.

FOREMOST's new HETs (High-Efficiency Toilets) are manufactured to be a proactive tool in waterconservation. The All-in-One 1,000 series toilets feature Dual Flush, with a 1.1 gpf flush for liquidsand another 1.6 gpf flush for solids. These Dual Flush models, along with other FOREMOST HETmodels, save water and meet EPA WaterSense standards.

Source: FOREMOST GROUPS, INC

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USA: U.S. Housing Starts Slide to Lowest Level in 17 YearsApril 16 (Bloomberg) -- Housing starts in the U.S. dropped more than twice as much as forecast inMarch to a 17-year low, signaling that declining construction will keep eroding economic growth thisyear.

Work began on 947,000 homes at an annual rate, down 11.9 percent from February and the fewestsince March 1991, the Commerce Department said today in Washington. Building permits, a gaugeof future construction, fell to a 927,000 rate from 984,000 the prior month. Foreclosures are pushingdown property values by adding to the glut of unsold homes, prompting buyers to hold out for betterbargains and undermining new construction. The Federal Reserve will probably lower the benchmarkrate again at its meeting this month to cushion the economy against the housing- led slowdown.

``Home construction is probably going to continue to fall right through this year,'' Mark Vitner, a senioreconomist at Wachovia Corp. in Charlotte, North Carolina, said in a Bloomberg Television interview.``While we see a bottoming in sales in 2008, we really don't see an improvement until later 2009,early 2010.''

A separate report today showed that consumer prices rose 0.3 percent in March from the previousmonth, matching economists' forecasts. Excluding food and energy costs, prices increased 0.2percent, the Labor Department said. Starts were projected to fall 5.2 percent to a 1.01 million pacefrom an originally reported 1.065 million rate in February, according to the median forecast in aBloomberg survey of 72 economists. Estimates ranged from 950,000 to 1.1 million.

Permits were forecast to drop to a 970,000 pace, according to the survey median. The yield on thebenchmark 10-year note dropped to 3.58 percent at 9:47 a.m. in New York following the reports, from3.60 percent late yesterday. The Standard & Poor's homebuilder index rose 1.5 percent to 397.2.

Work on single-family homes decreased 5.7 percent to a 680,000 pace, Commerce said.Construction of multifamily homes, such as townhouses and apartment buildings, fell 25 percent to anannual rate of 267,000 in March. Starts dropped in all four regions, led by a 21 percent slump in theMidwest. Residential building has subtracted from economic growth since the first three months of2006, culminating in a 25 percent decline last year that was the biggest since 1980.

The National Association of Home Builders yesterday forecast housing starts would fall 30 percentthis year, compared with a previously estimated 27 percent drop, as the credit crisis persists. ``It'snow clear that we have entered what we anticipate will be a mild recession,'' David Seiders, chiefeconomist for the homebuilders' group, said in a statement. As property values tumble andadjustable-rate mortgages reset, more Americans are walking away from their homes. Foreclosurefilings jumped 57 percent and bank repossessions more than doubled in March from a year earlier,Irvine, California-based RealtyTrac Inc., a seller of default data, said April 14 in a statement.

JPMorgan Chase & Co., the third-biggest U.S. bank, said today that profit fell 50 percent in the firstquarter after $5.1 billion of writedowns and provisions linked to subprime mortgages, bad home-equityloans and financing for leveraged buyouts. The company set aside $1.1 billion for future home- equityloan defaults, almost three times as much as in the fourth quarter.

The construction slump is causing job losses to mount and sales of building materials and appliancesto drop. Falling home prices undermine consumer confidence and spending, which accounts for two-

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thirds of the economy.

Homebuilders are also pessimistic. The National Association of Homebuilders said yesterday itsconfidence index held near a record low this month. KB Home, the fifth-largest U.S. homebuilder, lastmonth reported a wider loss than analysts projected as the housing recession cut sales and led toland writedowns. "Many potential buyers either cannot or will not make a purchase commitmenttoday,'' Chief Executive Officer Jeffrey Mezger said on a conference call March 28. "Many are simplyunable to qualify for financing given the more restrictive lending environment.'' Economists surveyedby Bloomberg this month forecast the economy will not grow at all in the first half of the year, theweakest performance since the 2001 downturn.

Fed policy makers are more focused on the threat of recession than inflation, believing that theeconomic slowdown already under way will help tame prices. "Many participants thought somecontraction in economic activity in the first half of 2008 now appeared likely,'' according to the minutesof Fed's March 18 meeting released last week. While "uncertainties about the outlook for inflation hadrisen,'' the minutes said, "the Committee expected inflation to moderate in coming quarters.''Investors project the central bank will lower the benchmark rate by at least a quarter point later thismonth.

Source: www.bloomberg.com

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Canada: Condo Boom Drives Canadian Housing StartsConstruction began on more new homes than expected in February, according to data from theCanada Mortgage and Housing Corp. The seasonally adjusted annual rate of housing starts came inat 256,900 units in February, a 15% jump from 222,700 units in January, the CMHC said on Monday.The strong results from February are due to increased condominium starts, which reflect strong salesover the past two years, said CMHC chief economist Bob Dugan in a telephone interview.

"I wouldn't want to read too much into it as being a new direction for the housing market," he said.Construction of multiple family dwellings, which include condo towers, rose 30% in urban areas inFebruary. The multiple starts category is prone to fluctuations, said Mr. Dugan, because when thefoundation is laid for one condo tower it bumps up the starts number by several hundred units.

Despite February's strong results, Mr. Dugan said growth in new home construction is still expected toturn downward throughout the rest of the year. RBC assistant chief economist described the surprisejump in housing starts as phenomenal, but noted that much of the growth came in the condo market."Tempering the impression of strength in the overall gain was the fact that most of the increase camefrom the volatile urban multiples component," wrote RBC assistant chief economist Paul Ferley in amorning commentary.

He said that a host of factors -- including a strong Canadian dollar, a weak U.S. economy andongoing problems in global credit markets -- will likely cool the housing sector as the year progresses.

Although the CMHC expects housing starts to slow this year, 2008 will likely mark the seventhconsecutive year of more than 200,000 starts. The last time Canada saw such a sustained boom inhousing construction was the period from 1971 to 1978.

The CMHC adjusts monthly housing starts to remove seasonal variation and multiplies the figures by12 to reflect annual levels.

Source: Financial Post

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