As our friends south of the border prepare to celebrate their Thanksgiving holiday, we in Canada also have a lot to be grateful for. Despite global trade concerns, the Canadian economy has proved to be resilient. The unemployment rate sits at a historical low of 5.5 per cent, wages are showing moderate increases, and the retail market continues to post growth.
The Canadian technology distribution market is also showing continued strength. When we look at overall growth, the market posted an increase of +7 per cent in Q3’19 vs. the same period in 2018. This is on top of +6 per cent growth the prior year. In other words, the market is not only growing, but the pace of growth is accelerating.
When it comes to distribution sales out to the B2B destination channels, we are seeing double-digit growth in Value-Added Resellers. The Small VAR channel is particularly important as it accounts for little over 40 per cent of total revenue and is a key supplier of products and services to small and medium-sized businesses.
The growth in the market has been fueled by PCs, tablets, workstations, printers and large format commercial displays. After a long period of decline, the printer category has posted growth driven by laser and inkjet multi-function printers which combined make up 2/3rd of total printer revenue.
Large format commercial display (LFCD) sales continue to grow as businesses focus on updating out of date technology in meeting rooms. In most cases, this involves moving from traditional projection systems to LFCD units. Another factor driving growth in LFCD is wider use of these screens in multiple businesses including airports, hotels, clinics or grocery stores. VARs serving this space are benefiting from this growth.
Digital transformation is a major driver of growth, and a key topic of discussion in commercial circles. It touches on various categories including PCs, monitors, storage, networking, and most of all software. The market will continue to see investment in this area, as the stage each SMB is in could vary. Software tracked by NPD’s Distributor Track service has shown healthy double digit-growth, with Database & App Development and Cloud Infrastructure & PaaS categories showing the highest growth.
In conclusion, with the investments we are seeing across the hardware and software categories, we expect the Canadian technology distribution market to have a positive finish to the year with single-digit growth.