GE Capital tends to the growing garden
At least one industry analyst thinks that the outlook for lawn and garden involves a lot of green, upward-pointing thumbs.
GE Capital’s Commercial Distribution Finance business, which provides financing to the industry, predicts good things ahead. Even though 2014 saw its fair share of weather disruptions, dealer financing volume is up 9% year-over-year in the United States and 12% in Canada, according to company data.
“The long winter and late spring this year contributed to strong snow-products sales but a slow start for lawncare products,” said Mike Horak, president of CDF’s outdoor products group. “I expect robust ordering of snow products for next year to replenish depleted inventories. And, since mower sales stabilized after that slow start, our outdoor products dealers are in good shape as we head into the end of the year.”
Other strong fundamentals, according to CDF outdoor products portfolio data, include an annual U.S. inventory turnover rate of over 2X and inventory-aging rates of 7% (reflecting inventory over 18 months old). In Canada, those numbers are 3X and 5%.
Both Horak and Jim Tokarski, owner of A-1 Repairs in Elgin, Illinois, can be heard discussing these trends in greater detail, as well as the increasing role of technology in the industry, in an audiocast.
PPG acquires Pittsburgh paint distributor
PPG Industries has agreed to acquire Westmoreland Supply, a Pittsburgh-based architectural paint distributor with 12 stores in Western Pennsylvania and West Virginia.
Upon completion of the deal, Westmoreland will be rebranded under the PPG Paints store brand.
“The acquisition of Westmoreland Supply further strengthens PPG’s company-owned stores network,” said Scott Sinetar, PPG’s VP architectural coatings, North America. “Customers who know Westmoreland Supply will continue to benefit from a great product selection and excellent customer service. Customers will also have access to the consistent, integrated experience PPG delivers through its network of PPG Paints stores.”
The deal is expected to close in the fourth quarter of this year, subject to customary closing conditions. The specific financial terms of the transaction were not disclosed.
Existing-home sales rise
Existing-home sales made a comeback in September after experiencing a slight decline in August. At their highest level in 2014 so far, sales clocked in at an adjusted annual rate of 5.17 million, according to the National Association of Realtors.
As for whether rising home prices are helping or hurting the housing market — it depends on how you look at it.
“Low interest rates and price gains holding steady led to September’s healthy increase, even with investor activity remaining on par with last month’s marked decline,” said NAR chief economist Lawrence Yun. “Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline in choices due to the fact that inventory generally falls heading into the winter.”
For Sterne Agee chief economist Lindsey Piegza, increases in median home price present a troubling picture for future demand, as prices are growing faster than wage growth.
"Particularly among the youngest generations, strapped with debt and minimal savings, first-time homebuyers are becoming an increasingly smaller portion of the market, a trend not going unnoticed by Washington," she commented in a September home sales report. "Already regulators are talking about new programs that will allow more homebuyers to get loans at lower rates and with much smaller down payments."
September’s rate represents a 2.4% increase from August’s figure of 5.05 million. However, they’re down 1.7% from last September’s 5.26 million-unit-level.
Single-family home sales were up 2.0% to a seasonally adjusted annual rate of 4.56 million, though they were also down on a year-ago basis (1.9%).
Gains were experienced across all regions with the exception of the Midwest, where they declined 5.6%.
As for home prices, the median for all housing types was $209,700, which is 5.6% above last year’s rate. Median prices have now gone up on a year-over-year basis for 31 consecutive months. For single-family homes, that number came in at $210,300.
Meanwhile, total housing inventory was down 1.3% to 2.30 million existing homes available for sale, representing a 5.3-month supply.