SB Authority: Discretionary Consumer Spending Slowed Down in May

The index issued by the SB Authority reveals that economic activity of small businesses increased a mere 0.35 percent in May compared to the previous month. The index for May reached 104.89 points. The small increase was driven mostly by the creation of new businesses and the Russel microcap.

The index registers monthly results on six other components – the prime rate, default loan rate of small business, processing volumes of merchants, reports on national employment, retail sales, and loan origination.

The chief executive officer and president of Newtech Business Solutions, Barry Sloane, said that the US economy was slowing down despite federal efforts. He explained that the slow-down trend continued despite the fact that the Federal Reserve purchased assets worth trillions of dollars from financial institutions, and the 600 million dollars invested in long-term government obligations. Also, budgetary stimulus does not appear to have any positive impact yet. Barry Sloane added that rising employment and the discretionary spending of consumers are the two main factors on which small businesses rely on to increase their economic activity.

As consumers increase their savings to protect themselves from loss of income in a climate characterized by job insecurity, their spending decreases, they pay less and less of their debt and they have to face rising energy and food costs. This consumer behavior also prompts small businesses to put a hold on their investments and employment for future growth.

Newtech provides business services to more than 100,000 companies. The US is estimated to have some 27.5 million small and medium-sized companies, which account for almost 99.7 percent of American employers.

 

USCM: Pre-Crisis Job Levels Hard to Reach in Metro Areas

The conference of US mayors, USCM, revealed that metropolitan mayors expect to see double digit joblessness in 75 metro areas before year-end and 27 areas dropping to single digit unemployment. The USCM also projected a growth of the gross domestic product of 3.5 percent for the rest of this year, up from 1.9 percent in the first half.

Employment levels like those before the economic downturn will be slow to emerge, reveals a USCM report. However, USCM estimates that, by the end of 2014, many of the metropolitan areas will see employment bloom, with half of the 363 metro areas reaching pre-crisis levels of employment. Forty-eight areas are forecast to remain behind in employment levels and to reach their pre-crisis employment peak only after 2020.

The USCM annual meeting brought together the mayors in US to discuss the challenges that their cities face in the current economic climate. Given some of the less optimistic outlooks, the USCM participants launched a call to the White House and the Congress to intensify their efforts to stimulate the economy. Among other things, they called for an end of the wars in Iraq and Afghanistan. They also asked that military spending be directed towards stimulation of the national economy and domestic jobs.

Metropolitan areas are expected to generate 86.4 percent of payroll additions by the end of 2015. Unemployment predictions are not very optimistic, with 69 metros at more than 10 percent, 100 with at least 9 percent, 173 with 8 percent by the end of next year.

Turner Construction: Second Quarter Index Forecasts Rising Construction Costs

The index of Building Cost released by the Turner Construction Company for the second quarter of this year showed a 0.62 percent increase from the figures of the previous quarter, reaching a value of 811. Year-over-year, the index increased by 1.63 percent.

The index reflects the evolution of the nonresidential building sector of the US construction market.

The rising costs of building materials get balanced by lower pressure of commodity pricing and market activity levels.

According to Turner’s vice president, Karl Almstead, who is in charge of the Building Cost index, two crucial impact factors on the evolution of construction costs were the rising costs of materials and the still constrained demand. These factors exerted significant influence over construction costs over the last three quarters, including the second quarter of 2011.

At the end of this year’s first quarter, commodity prices appeared to decrease. Nonetheless, the rising costs of construction materials continued to exert their influence on construction costs, added Karl Almstead.

Turner Construction performs 90 percent of its business based on contract arrangements. The company also offers pre-construction planning, followed by establishing the contract price. Thorough pre-construction planning, combined with advanced procurement techniques, the company effectively manages the risks derived from cost evolutions.

The Turner index is not necessarily in line with other construction cost indices in the country, as it incorporates a wide range of factors, including market competitiveness, material prices, labor productivity and labor rates nationwide.

Deloitte: Outlook on Consumer Spending Less Optimistic and Index Continues to Slip

As inflation and unemployment claims continue to rise, the consumer spending outlook gets weaker. The Consumer Spending Index from Deloitte continued its decline in May, driven down by a sharp increase of jobless claims last month.

The monthly index for May fell by 2.66 percent while only a month ago it was revised upward for an increase of 3.29 percent.

The consumer spending index tracks the evolution of the consumers’ cash flow, which is an indicator of future spending.

According to the chief economist of Deloitte, Carl Steidtmann, the Index’s author, the main causes for the weakness in consumer spending are the job market indicators. He added that the economy will also have to face other challenges, which will keep the economic growth low for the short term.

Consumer spending is under pressure from negative effects on real wages caused by rising energy and food prices, combined with labor market insecurities.

The index is comprised of four elements – real home prices, real wages, initial unemployment claims, and the tax burden.

The tax burden went up to 10.5 percent, from 9.1 percent last year, while the initial number of jobless claims increased by 32,500. The labor market is showing signs of decline, and its recovery is put at risk. The growth of real wages contracted by approximately 0.8 percent compared to the same period last year. Real wages continue to suffer the effects of growing food and energy prices.

Real prices of homes have continued to decline, but at a slower pace than previously reported. Compared to last year, the prices are 3.3 percent lower.

 

Manpower: Third Quarter Employment Outlooks for Major Countries Improve, Uncertainty Fades

Indian and Brazilian employers report the strongest intentions to hire worldwide, while German employers have revealed their most ambitious hiring projects in the past four years, reveals the Employment Outlook released by Manpower Groups.

Employers from major economies report the most optimistic hiring plans in the years since the onset of the financial crisis and year-on-year prospects are showing modest improvement.

While employment plans in UK and Italy remain cautious, France and Canada show results above the historical averages. The US and Japan showed levels below pre-recession ones, but they are slightly more optimistic than in recent years.

Manpower polled employers from 13 US industry sectors and the results show that companies foresee an equal or slightly increased hiring activity from the levels of the previous quarter.

Employers in Brazil and India have the strongest hiring plans worldwide, with high demand in Real Estate, Insurance and Finance.

ManpowerGroup’s Chairman and Chief Executive Officer, Jeffrey Joerres, underscored the fact that employers all over the world, despite showing some optimism, are still cautious.

Joerres added that developed markets are also feeling a talent gap, as the old employees retire, while, in emerging markets, there is a surplus of workers that lack the education, experience and skills required by the employer. This shortage of skill appears to increase gradually in all countries and sectors.

Manpower indicates that governments, educators and governments will need to coordinate their efforts in order to find solutions that will fill the skill gap.

According to the Manpower report, 35 countries out of 39 presented positive hiring expectations for the third quarter. Twenty countries had improved hiring prospects from the previous quarter, while 24 countries showed improvements on an annual basis.

The strongest employment plans were presented in Singapore, Turkey, Taiwan, Brazil, and India. At the opposite end are the European countries that had serious financial difficulties – Ireland, Italy, Greece and Spain.

US April Exports Up Nearly 16 Percent, Reach New Historic High

United States exports posted a new record, increasing by nearly 16 percent in April, from 172.7 billion dollars to 175.6 billion dollars, reveals the US Commerce Department through its Bureau of Economic Analysis.

Official figures show that the export of goods increased by two billion dollars, to 126.4 billion, while exports of services reached 49.1 billion dollars, after an increase of 0.2 billion dollars. The Bureau of Economic analysis also reported that the country’s trade deficit went down by 3.1 billion dollars, from 46.8 billion to 43.7 billion.

Export growth has received financial support from the US Export-Import Bank, which authorized some 14.8 billion dollars for the first seven months of the current fiscal year. Ex-Im Bank reported that guarantees for long-term loans have increased by nearly 34 percent for this fiscal year, reaching 7.6 billion dollars, while guarantees for the medium-term loans reached 612 million dollars, an increase of 27 percent. Guarantees for working capital, generally used by small businesses, also increased by nearly 12 percent this year and reached 834 million dollars.

For the past 12 months, US exports amounted to 1.935 trillion dollars, up 22.9 percent compared to the 2009 levels.

The annualized growth rate over the last 12 months was 16.7 percent. The current export policy of the US targets the doubling of exports by 2014. The required annualized growth rate for achieving this objective was estimated at 15 percent.

The market with the largest annual growth was Turkey, with an increase of 54.9 percent. Other markets that have posted annual growth rates of more than 30 percent are Indonesia, Hong Kong, Malaysia, Argentina, Brazil, Peru, Taiwan, Panama and South Africa (nearly 40 percent).

SFN Group: Confidence Index for US Employees Posts Slight Increase in May

Harris Poll LogoWorkers appear to have increased confidence in their ability to find new jobs, as well as in the economic prospects of the country.

The Employee Confidence Index, issued by the SFN Group, posted a 0.5 points increase in May, to 53.9. The index measures the optimism workers manifest towards the country’s economic climate and the confidence employees have in their employment situation.

The current situation of the index reveals a positive trend in the confidence that workers have about the possibility to find new jobs and the economic strength of the country. Approximately 40 percent of the workers that participated in a survey by Harris Interactive said that they were considering a job transition sometime in the next 12 months.

The number of workers with increased confidence in the strength of the economy has increased in May to 28 percent, from 25 percent in April, while 51 percent still believe that the number of jobs has lowered. More than 60 percent of workers said they believed in the future prospects of their employer while 46 percent said they were confident in being able to find new work. Furthermore, 72 percent of the surveyed workers did not believe that they would lose their job in the following 12 months.

According to SFN Group’s president and CEO, Roy Krause, the index has showed improvements in employee confidence over the past months, together with increasing employer confidence. He added that, despite these positive trends, there was some inconsistency in economic recovery rates. SFN Group continues to warn employers that their workers might try to change jobs, despite some economic volatility and that they should strengthen their efforts to retain workers who choose to seek other workplaces.

The SFN findings are supported by a survey made by Harris Interactive, conducted with the participation of 1,268 employed adults from US.

Plastic Recycling Is More Accessible Than Previously Thought

Americans have more possibilities to recycle plastic than they thought.A recent study revealed that 94 percent of the US population is able to recycle plastic bottles and other types of commonly used plastic. Furthermore, 40 percent of Americans have the possibility to recycle plastic containers such as dairy lids and tubs or yogurt cups.

The study was released by Moore Recycling Associates, after surveying approximately 2,500 communities in the US. The study, entitled Plastics Recycling Collection, also revealed that the number of US residents in the 100 largest cities that have access to recycling methods has almost doubled from 2008.

Although the study did not account for film plastic recycling – such as bags and wraps, this category of plastic can be collected and recycled at some 12,000 locations in the US, as indicated by current documentation.

American Chemistry Council’s vice president in charge of the plastics department, Steve Russel, said that the fact that so many Americans had the possibility to recycle plastic was good news. However, he added, there is a pressing need to increase awareness about recycling possibilities, in order to increase the number of residents that take advantage of the recycling capabilities in their communities.

The study also noted that recycling companies should avoid using confusing codes, and instead use shapes, such as tubs, bottles, lids, trays, to describe the types of plastic products they collect.

Recycling companies are usually small businesses that activate in specific communities. They rely on the supply of used plastics coming from consumers who stockpile old plastic containers, bottles, wraps and bags.

Recycled plastic is used to produce a wide variety of products, from new bags to car parts, building and decorative materials, or containers.

2010 Census Reveals US Population is Growing Old

US Census Bureau LogoThe latest Census brief for 2010 released by the US Census Bureau, also revealed that the median age of Americans today is 37.2, meaning that half the population in the United States is younger than 37.2, and the other half older.

Seven US states have been found to have a median age of 40. The brief also revealed that the male population has increased 9.9 percent faster than the female population, which grew by 9.5 percent. The population is divided into 50.8 percent female and 49.2 male.

Over the past decade, the 45-64 years old population, which now makes up for 26.4 percent of the total, increased by 31.5 percent, reaching 81.5 million. The increase comes primarily from the aging of baby boomers. The next age group, of 65 years-old or older, has also increased at a faster pace than younger categories, reaching 40.3 million at a growth rate of 15.1 percent. This age group accounts for 13 percent of the US population.

The age group 18-44 had the slowest growth rate, of only 0.6 percent, and it now makes up 36.5 percent of the total, with 112.8 million.

The youngest generation, of 18 year-olds and younger, also had a slow growth rate of 2.6 percent. They now count 74.2 million, or 24 percent of the total US population.

From 2000 to 2010, the median age of the US population increased by 1.9 years, from 35.3 to 37.2 years. The increase in media age was smaller than in the previous decade, when the median age grew by 2.4 years.

 

McCann Worldgroup: Tech More Important Than Smell to Global Youth

A recent quantitative study released today by McCann Worldgroup, The Truth about Youth, reveals that more than half of today’s youth of 16 to 22 years would choose to keep their technology and gadgets instead of their sense of smell.

The survey was conducted with the participation of 7,000 young people with ages of 16-30, this April. The respondents were originally from Mexico, Brazil, India, China, Spain, USA and UK. The results of the initial quantitative study were tested qualitatively in 17 countries.

The view that emerged on the current global generation of youth is characterized by three fundamental traits – Authenticity, or the need to see things in their real light, Justice, or the need for personal and social justice, activism, doing the right thing, and Commune, or the need to establish relationships, connections, and integrate in the community.

These motivations form the base for behaviors that have been noted in all the markets included in the survey.

Some of the key findings reveal that technology has become similar to the fifth sense to the young generation. Technology helps the young establish and maintain relationships, as well as to sense and understand the world. For 53 percent of the respondents aged 16-22 giving up their sense of smell would be easier than giving up technology.

A fundamental difference between the current generation and its predecessors is that young people today tend to have extended social networks and multiple groups of friends, while previous generations focused on a single small and tight group. Furthermore, 47 percent of the respondents appear to want to be remembered for the connections they established in life.

When making friends, young people today look for truthful people – 42 percent – also chosen as a personal description by 21 percent – and genuine (22 percent).

Another fundamental value for the young generation is justice, very important for 52 percent of the respondents. About 44 percent said they knew right from wrong and that they wanted to be remembered for bringing positive change to the world.