Eurozone woes continue. U.S. housing and construction. China housing, employment. Currency wars. Sentiment watch. Earnings watch.
Bloc’s Downturn Set to Continue Euro-zone business activity shrank further in February, suggesting an economic downturn that started last April will continue in the first quarter of 2013 at least
Big market-depressing headline this morning as market hopes of a “stabilizing” Eurozone are significantly shaken by Markit’s flash PMI report for February. As I have repeatedly shown in recent weeks, market hopes on Europe were not based on facts. The auto market is a good case in point. These charts from ZeroHedge summarize the recent bad news on this important industry. No green shoots there!
Construction of single-family homes rose to the highest level since the financial crisis last month as the housing market improved, though the overall results for all types of housing starts were pulled down by a drop in apartment and condominium construction.
Housing starts fell 8.5% last month to a seasonally adjusted annual rate of 890,000, the Commerce Department said Wednesday, driven by a 26.1% decline in multifamily home construction. December’s figures were revised upward to a rate of 973,000 new homes started. Compared with a year ago, new home construction was up 23.6%.
Construction of single-family homes, which made up about two-thirds of housing starts last month, rose 0.8% in January to a rate of 613,000 units and was up 20% from a year earlier. That figure is the highest since July 2008. (…)
Meanwhile, the number of new building permits, an indication of future construction, rose 1.8% to an annualized level of 925,000 in January, the highest level since June 2008.
(Charts from Have Analytics)
Note: ISI Homebuilders Survey In Mid-Feb Surges to 65.7
The American Institute of Architects said Wednesday that its Architecture Billings Index rose to 54.2 in January from 51.2 in December. The index of new project inquiries rose to 63.2 in the three months to end-January from its previous reading of 57.9.
The indices are viewed by analysts as a leading indicator of building activity, with a typical lag of nine to 12 months between clients billing architects and starting construction.(…)
The mixed-practice segment – buildings that combine retail and residential space – remains the most buoyant, according to the institute, followed by multi-family homes and commercial and industrial construction, all of which are seeing expanded activity.
Record $146bn withdrawn from the economy since Monday
The move was partly a technical reversal of liquidity injections made before last week’s Chinese New Year holiday, but analysts said it also heralded a cautious shift to tighter monetary policy as the world’s second-largest economy heated up.
Property price controls to stay Property price controls will be maintained, Premier Wen Jiabao vowed on Wednesday, in response to a rebound in the real estate market in some cities.
There was a massive surge in the amount of residential floor space sold during the Spring Festival holiday week.
Tracking by the China Index Academy, a real estate research body, saw 21 of 27 cities monitored register sales of floor space more than five times the area of the corresponding holiday week last year and at higher prices.
TIGHT MARKET: Major Cities May Face Partial Shortage of Property Supply
According to the CEBM Property Survey, developers’ potential property supply will be at a limited level in major cities in 2013 as developers decelerated their land purchases and starts of new property projects. Thus, we expect the inventory to sales ratio to be on a continuous downward trend in 2013 and to decrease further and faster in 1H13. Some major cities may face a partial shortage of new property supply. (CEBM Group)
Companies struggle to find, keep workers A labor shortage is sweeping through both the Pearl River Delta and Yangtze River Delta regions, the country’s two major economic powerhouses.
A labor shortage is sweeping through both the Pearl River Delta and Yangtze River Delta regions, the country’s two major economic powerhouses.
(…) “We’ve got about 2,000 vacancies available at the moment, but few contracts were signed in the past week as some of the migrant workers haven’t returned from their hometowns, and some demanded higher-income jobs,” Li said.
A majority of the listed vacancies in Li’s company offer jobs with a monthly salary of over 2,000 yuan, while most of the applicants require a minimum income of 3,000 yuan.
“It has been difficult for a company to hire an ordinary worker without any specific skills with a monthly salary of 2,000 yuan, a salary that was unacceptable for migrant workers in Shanghai,” Li said.
Li added that migrant workers now pay more attention to working conditions, social welfare and leisure time.
(…) Guangzhou will still face a shortage of 110,000 workers, according to the city’s human resources and social security bureau.
A survey of 326 enterprises involving 219,300 migrant workers found that more than 80 percent of the enterprises expressed an urgent hiring demand, mainly for general workers.
Enterprises are offering 9 percent to 12.5 percent pay rises to newly hired workers, the survey found. (…)
Brazil’s economy expanded at a slightly slower pace in December, rounding out a full year of meager economic growth, a central bank advance indicator shows.
The IBC-Br index rose 0.26% from the previous month on a seasonally adjusted basis and 1.35% for all 2012.
Incoming South Korean President Park Geun-hye on Wednesday gave a clear indication that she will stick with the currency management policy of the outgoing administration, saying she would try to ensure the stability of the Korean won to help the nation’s companies.
“I understand that securing stability in foreign exchange rates is very important. I will take pre-emptive action to help Korean companies avoid making losses,” Ms. Park said in a meeting with local business leaders, according to a spokesman.
South Korean exporters have been vocal recently in complaining about the ascent of the Korean won, which makes their products more expensive in overseas markets and diminishes overseas earnings when they are repatriated.
Fed doubtful on open-ended QE3 policy Concerns grow over risks of ongoing quantitative easing
Fed and Bank of England head in different directions Scope for confusion over central banks’ future intentions
Pound Sinks Amid Rift Over Stimulus Bank of England Governor Mervyn King and two other members of the U.K. central bank’s Monetary Policy Committee were defeated in a push for extra stimulus at its February policy meeting.
Wal-Mart Stores Inc. projected first-quarter profit that trailed analysts’ estimates as an increase in the payroll tax curtails spending among its lower-income shoppers.
Earnings per share in the current quarter will be $1.11 to $1.16, the Bentonville, Arkansas-based company said today in a statement. Analysts projected $1.19, the average of 18 estimates compiled by Bloomberg.
Profit in the year ending January 2014 will be $5.20 to $5.40 a share, Wal-Mart said. The average of 25 analysts’ estimates compiled by Bloomberg was $5.39 a share.
Chain store sales rose 2.7% during the week ended Feb. 16 but the 4-wk m.a. Y/Y growth rate keeps falling.
Federal workers are expected to begin taking unpaid leave by late March or early April if the government absorbs $85 billion in spending cuts set to start March 1, according to estimates from different agencies.
Even though the process begins March 1, many federal agencies must notify employees 30 days before beginning furloughs.(…)
In addition to roughly 700,000 Department of Defense workers, the reductions, if they take effect, would affect employees in many other agencies, according to government officials. More than one million workers could be affected. They include food inspectors, according to the U.S. Department of Agriculture; Transportation Security Administration security personnel, according to the Department of Homeland Security; and White House and congressional staff.
In many cases, workers would be forced to take one unpaid day off each week or every two weeks through September, agencies said. (…)