CANADA: Wool end-use demand reached an 8-year high

Clothing sales in November recorded the best month-on-month result since May. Momentum was lost rather quickly however, with disappointing sales for December, clothing stores among the worst sales performers.

Monthly sales by home furnishing stores were the second-highest sector performer in December.

A deteriorating economic picture for the US has affected Canada's GDP growth outlook. Current domestic demand continues to be underpinned by still positive retail sales, earnings and employment growth indicators.

Canada's wool usage in both domestic spinning and manufacturing continues its long-term decline as finished imports of both interiors and apparel gain share within the domestic market.

Canada's retail sales growth for 2007 was reflected in The Woolmark Company's wool demand estimates. Wool end-use demand reached an 8-year high in 2007. Throughout the whole of 2007 there was a surge in the import of wool carpets, destined in part due to re-stocking by wholesalers on the strength of a robust housing market and buoyant home furnishing sales.

Wool retail sales are expected to be marginally slower in 2008, as softer economic conditions start to impact upon personal expenditure.