North America: Market overview
Strong start to the year
We saw favourable market conditions across North America at the start of the year. Canada entered 2020 with growth in the real estate market, residential investment and household consumption. There was strong demand in the USA from both housing and non-residential construction starts, with low unemployment driving consumer confidence and spending.
COVID-related containment measures resulted in housing and non-residential construction starts falling in the USA, though the economy remained resilient in the first half.
Hurricanes and severe weather during the year caused significant disruption to our raw material supply in the USA’s Gulf Coast area. Two of the four major PVC resin producers had to declare force majeure, exacerbating the tight PVC pipe and fittings supply situation, which was already suffering due to COVID-related production slowdowns.
There was a dual impact on the Canadian economy, as alongside COVID-19, the global demand for oil plummeted. This led to a sudden, deep contraction in economic activity and rising unemployment in the country. Total construction starts fell, with demand for new buildings down sharply.
Recovery in the second half of the year
In Canada, the slowdown in construction eased in the second half of the year, with a rise in total building permits issued. There was an increase in housing starts and business fixed investment in the USA, leading to a strong second half in our markets.