Synergy Thermal Foils

U.S. kitchen and bath cabinetry sales in November 2017 rose 1.8% from November 2016, according to the Kitchen Cabinet Manufacturers Association’s (KCMA). Year-to-date cabinetry sales increased 2.8% over the same period in 2016. Semi-custom sales were up 3.7% in November and were 3.5% higher through the first 11 months compared to 2016. Custom cabinetry sales improved 2.2% from the same month last year. Stock sales inched upward by 0.1% in November and year-to-date sales increased from 2016 by 3%.

A kitchen decorated by STF

“There’s no place like home.” A quote from the classic movie, The Wizard of Oz, has become the mantra for many Americans who are pursuing the American Dream of homeownership. Reaping the benefits of the growing economy; healthy job market and income growth has fueled demand for houses, including more millennial first-time buyers. Existing-home sales surged for the third straight month in November and reached their strongest pace in almost 11 years. According to the National Association of Realtors, existing homes sales were up 5.6% in November over October, a seasonally adjusted annual rate of 5.81 million. The fastest pace since July 2007, new single-family house sales increased 17.5% in November over October to a seasonally adjusted annual rate of 733,000. This is a 26.6% increase over the same time last year.

“The greater home sales will stoke the fires for stronger economic growth next year as consumers spend more to furnish their new homes with new appliances and furniture and all the decorations and trimmings,” said Chris Rupkey, chief economist MUFG in New York. Even though the housing market has experienced robust growth at fast paces there are continuing constraints that will affect the housing market going into 2018. Total housing inventory at the end of November decreased 7.2% and has fallen year-over-year for 30 consecutive months. Current inventory levels are at a 3.4 month supply. Low inventory has elevated home prices and has sidelined some first-time buyers who cannot find suitable lower end market homes. Due to low inventory, the median home price has increased 5.8% from a year ago, the 69th consecutive month of year-on-year price gains.

Additionally, for new homes being built, a consistent shortage of skilled labor and lots has tightened many builders ability to add new homes to the market. Builders are pushing for more housing starts, with a 3.3 percent increase in housing starts in November over October. However, the supply is unable to keep up with current demand.

The National Association of Realtors says it anticipates a slightly negative impact on the housing market from the overhaul of the U.S. tax code. The cap for property and state and local income tax is now set at 10,000, the prospect for a bigger tax bill may discourage some buyers. Moody's Analytics chief economist Mark Zandi has warned that the tax revamp would weigh on house prices, with the Northeast corridor, South Florida, big Midwestern cities, and the West Coast suffering the biggest price declines.

Sales of new U.S. single-family homes unexpectedly rose in October to a 10 year high. In October, sales were at a seasonally adjusted annual rate of 685,000. This is a 6.2% increase over September 2017 and an 18.7% increase over October 2016. The sale of new homes sales consists of eleven percent of overall home sales.

Mild weather helped to boost new home sales last month. Sales soared 30.2% in the Northeast to their highest level since October 2007. They rose 1.3% in the South also to a 10-year high. Sales jumped 17.9% in the Midwest and climbed 6.4% in the West.

Existing home sales also increased in October to their strongest pace since earlier this summer, a 2% increase over September. But supply shortages have continued to lead to fewer closings on an annual basis for the second straight month.

The U.S. job market has finally begun to shake off the last impacts of the hurricane season that hit Florida and Texas earlier this year. In November, 228,000 nonfarm jobs were added to the economy, as the unemployment rate remained at a 17 year low of 4.1%.

Most notably, the manufacturing segment had the largest gains with a 1.5% increase in jobs in 2017 over 2016. Manufacturers added 31,000 jobs during November alone, with unemployment in this sector at 2.6%, the lowest on record for the series since January 2000.

Source: Media Venue

Millennials, a term that we have begun to hear more often, that refers to the age of people born roughly between 1980 and 2000 that has peaked at 93 million people. Baby boomers, born between 1946 and 1964, numbered 78.8 million at their peak and today have 74 million, according to the 2016 U.S. Census Bureau.

The largest single age cohort today in the U.S. is the 26-year-old, who number 4.8 million. People 25, 27, and 24 following close behind. Many of these are on the verge of life-defining moments such as choosing a career, buying a house and having children.

As a whole, the largest demographic bubble they have begun to transform popular culture, retailing, media, and lifestyles. According to Zillow Group, they make up for about 42% of all home buyers and 71% of all first time home buyers. They are also more likely to invest in their home, with 86% of millennial home buyers making at least one improvement to their home in the past year, more than any other generation.

The millennial influence has already begun to shape today’s design trends that focus on key elements such as long-term use, functionality, eco-friendly and cost-effectiveness.

Millennials are more motivated on making sure style, color, and materials used to stay relevant as long as possible. That includes the use of more neutral colors such as whites and greys in finishes such as high gloss and super matte for a beautiful contemporary design that will always be in style. There is also a heavy emphasis on eco-friendly products, making value-engineered wood products a go-to solution because of the versatility of the products along with many options for finish and design type.

Source: Simply Hired Blog

The US economy continues to surprise economists and with no signs of slowing down despite the impact of two hurricanes in the Southeast. Exceeding original forecasts, GDP growth in the third quarter of 2017 reached 3% following a GDP growth of 3.1% in the second quarter.

The GDP growth can be attributed to an increase in inventories, exports, and consumer spending during the third quarter. U.S. consumer spending recorded its largest increase in more than eight years, according to the Bureau of Economic Activity there was a 1% increase in September, likely as those affected by hurricanes replaced flood-damaged vehicles.

Along with GDP growth, jobs within the U.S. have also continued on an upward trend. With 261,000 jobs added in October, unemployment fell to an unprecedented rate of 4.1%, the lowest since 2000. This marks the 85th straight month of job growth within the U.S.

The manufacturing sector has seen its 14th straight month of expansion according to the Institute for Supply Management’s report on Business. Of the 18 manufacturing industries, 16 reported overall growth with continued growth in new orders, production and employment.

Amidst a booming economy, the U.S. housing market has also begun to see some noteworthy figures. New single-family home sales had an 18.9% increase in September over the August 2017 rate and a 17% increase over the September 2016 estimate.

The sale of existing home sales finally began to rebound in September with a 0.7% increase after three straight months of declines, but ongoing supply shortages and recent hurricanes have muted the overall activity.

Altogether these indicators point towards continued expansion and a healthy outlook for the U.S. economy going into the 4th quarter and 2018.

The U.S. economy shows no signs of slowing down, despite the impact of two major hurricanes that hit U.S. mainland within two weeks of each other. Damage done by high winds and rampant flooding in Texas and Florida (the 2nd and 4th largest economies in the U.S.) was forecasted to negatively impact third-quarter economic activity but as of yet the U.S. economy appears to be more resilient than in the past.

According to the World Economic Forum, the U.S. gained in global competitiveness for the 2017-2018 Global Competitiveness Index. The U.S. is now ranking number 2 out of 137 countries, the highest it has been since the beginning of the 2008 recession. This report assesses the competitiveness landscape based on 12 pillars (1), which provides insight into the drivers of their productivity and prosperity. Another positive outlook for the U.S. economy has been the reduction in the trade deficit for August, decreasing the deficit by 2.7% from July 2017. The August trade deficit came in at $42.4 billion, which is the lowest it has been in 11 months.

Even with a loss of 33,000 jobs, mostly in the service and hospitality industry due to hurricane impacts, unemployment decreased yet again. At its lowest, since February 2001, the unemployment rate is now at 4.2%. Economists predict that the loss of the total number of jobs will quickly be rebound as the areas impacted by hurricanes get back to normal.

With manufacturing driving the U.S. economy, 17 of 18 manufacturing sectors have reported growth according to the Institute for Supply Management (ISM) Report on Business (2). Manufacturing expanded in September as the PMI (Purchasing Managers Index) registered at 60.8%, an increase of 2% from the August reading of 58.8% and the highest since May 2004 at 61.4%. The September PMI indicates growth for the 100th consecutive month in the overall economy and the 13th straight month of growth in the manufacturing sector. The largest growth can be seen in new orders, up 4.3% and production rose 1.2%.

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(1) The 12 pillars used to measure global competitiveness include institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.
(2) The 18 manufacturing industries include: Textile Mills; Machinery; Nonmetallic Mineral Products; Transportation Equipment; Plastics; Rubber Products; Paper Products; Wood Products; Computer; Electronic Products; Food, Beverage; Tobacco Products; Chemical Products; Fabricated Metal Products; Miscellaneous Manufacturing; Petroleum; Coal Products; Apparel, Leather; Allied Products; Printing; Related Support Activities; Electrical Equipment, Appliances; Components; Primary Metals; and Furniture; Related Products.

According to the Kitchen Cabinet Manufacturers Association (KCMA), cabinet sales in July rose 1.8% compared to the same month in 2016. Stock cabinets grew 4.5% and semi-custom levels increased 0.6%.
Year-to-date sales were up 3.7% from 2016, with stock levels up 4.2%, semi-custom numbers rising 3.9% and custom totals increasing 0.7%.
Survey participants include companies whose combined sales represent approximately 70% of the U.S. kitchen cabinet and bath vanity market. KCMA is the trade association for manufacturers of kitchen cabinets, bath vanities, and key suppliers of goods and services to the industry. See KCMA for more details.

For the first time in recorded history, the U.S. was slammed by two Category 4 hurricanes from the Atlantic within the same year, devastating parts of Texas and Florida.

Hurricane Harvey made landfall on August 25, 2017, near the Texas Gulf Coast and stalling after landfall dumped a record 27 trillion gallons of rain on Texas and Louisiana in 6 days causing mass evacuations and catastrophic flooding along the gulf coast.

Only a mere 16 days later, on September 10, 2017, Florida was hit by Hurricane Irma. Yet another record-breaking storm that measured nearly 400 miles across made landfall in the Florida Keys before traveling up the spine of Florida.

Both of these storms have had disastrous impacts on affected areas causing extensive property damage and high loss output on economic activity for the two regions. According to a preliminary estimate from Moody’s Analytics, the two hurricanes have caused between $150 billion and $200 billion in damage to homes and furnishings, vehicles, commercial real estate, and public infrastructure.

Extensive flooding caused by Hurricane Irma

With Texas and Florida being the 2^nd and 4^th largest economies in the U.S., respectively, economist are slashing their estimates for third-quarter GDP growth. Goldman Sachs estimates GDP will increase by just 2% this quarter after cutting its estimates by 0.8%. The economic costs include disruptions to businesses, increased rates of unemployment, damage to infrastructure, crop losses, property damage and higher fuel prices.

However, many economists are predicting a robust fourth-quarter GDP due to rebuilding the affected areas; although estimates on the impact have not been released. “Any lost output and employment are likely to be made up in subsequent quarters,” said Gus Faucher, a senior vice president and chief economist at The PNC Financial Services Group.

“Reconstruction in the wake of Irma, funded by insurance payouts and federal aid, will boost the state’s economy and hiring in late 2017 and early 2018. Similar patterns have been seen with other natural disasters, such as Superstorm Sandy, Hurricane Andrew, and the Northridge earthquake,” said Faucher.

As Texas and Florida get back to work and start rebuilding following the devastation of Category 4 hurricanes, long-term outlooks are very optimistic and the current U.S. economic expansion, now in its ninth year, will continue.

Lastly, all of us here at Synergy Thermal Foils weathered the storm very well. We lost a few large trees and a couple days without power, our damage was very minor. We are back to operating under normal business conditions.

The U.S. economy shows no signs of slowing down.

A big recovery of GDP growth during the second quarter that was in large part fueled by consumer spending has brought back optimism. GDP growth was recorded at 2.6% in the 2^nd quarter, a much better outlook than the revised 1.2% during the 1^st quarter.

The Dow also reached a milestone after closing over 22,000 for the first time ever sustained by higher corporate profits and consumer spending.

“Earnings are growing and are growing faster than anybody thought. That alone will drive stock prices up,” says Brad McMillan, chief financial officer at Commonwealth Financial Network.

“We [also] see improving consumer confidence and business confidence. When investors are more confident when consumers are more confident when businesses are more confident, then typically you see stock prices rise,” McMillan adds.

Consumer confidence is up 3.8 points in July to June, reaching 121.1 (1985=100). At a 16 year high for consumer confidence! Overall consumers foresee the current economic expansion as continuing well into the second half of the year.

The increase in consumer confidence can be attributed to the strong job market. July saw the addition of 209,000 jobs, most notably jobs were added in the leisure and hospitality, education and health service, professional and business service and in manufacturing. Unemployment has also fallen to a 16 year low, a mere 4.3%. The tightening labor market has pushed wages up 2.5%; wages will continue to increase as the labor pool gets smaller and businesses will start competing for workers.

Added jobs and consumer confidence has also pushed the housing market forward. The sale of new, single-family homes rose 9.1% in June 2017 over June 2016. While existing home sales only increased 0.7% in June over the same month in 2016, this can be attributed to a low supply and price growth that is restraining budgets. The housing market will continue to grow despite facing constraints such as low inventory supply, fast pace price growth and the lack of land and labor.

Exceeding expectations, the U.S. labor market has continued the trend of adding U.S. jobs to the market. The labor department released its June statistics and the numbers have surprised many. Total non-farm payroll employment has increased by 222,000 in June, 47,000 more jobs than expected by economists. “The payroll number is well above expectations,” said Jim O’Sullivan, chief United States economist at High-Frequency Economics.

The unemployment rate was little changed at 4.4%, this steadying of the unemployment rate can be attributed to an increase of individuals entering the U.S. workforce. However, with a shrinking available labor pool, companies are trying to ramp up their hiring for skilled workers. According to Career Builders 2017 Midyear Job Forecast, approximately 60% of employers are looking to bring in more workers, a 20% rise from a year ago.

The economic expansion is now entering its ninth year with the lowest unemployment rate in 16 years.  Some feel it has reached full capacity.  With a level that’s this low, unemployment has more room to go up than down.  The U.S. has added jobs every month since October 2010, a record 81-month stretch that added 16 million workers and slowly repaired much of the damage from the 2007-09 recession.  The unemployment rate touched a 16-year low and the number of job openings hit a record earlier this year.

Economic conditions in the U.S. have remained steady over the past year, giving many people the opportunity to purchase a home. A solid job market, average pay increases and historically low mortgage rates; people across the U.S. are looking to make that transition from renter to owner occupancy.

However, they face one major issue: trying to find a house.

The national supply of homes has reached a 20 year low and over the past year the steepest drop in supply has occurred among homes that are typically the most affordable for first-time buyers. April 2017 had a 5.7 month supply of homes a slight increase over March 2017 figure of 4.9 supply, however not nearly enough to meet the current demand.

Across different housing segments, starter and trade-up home inventory fell 8.7% and 7.9% year-over-year nationally, respectively. Meanwhile, the stock of premium homes remained relatively unchanged since last year, having fallen just 1.7%.

With a limited number of property listings amid solid demand, sellers have little reason to reduce asking prices. Housing not only has become difficult to find but also difficult to purchase due to rising housing costs. Starter homes median price has increase 8.3% during the first quarter of 2017 over 2016, while trade-up homes and premium home prices have risen 6.8% and 7.2%, respectively.

Among the factors that have fueled the decline in housing inventory are:

• Homeowners are staying in their houses longer, averaging 8 years. Nearly doubled since 2008
• Investors hold a large share of properties, utilizing them as rental properties. In 2016, investor owned housing increased to 35% of the market share, up 5% over the last 10 years average of 30%.
• Pace of income growth is lagging behind property values, affordability constrains mean rental demand will remain robust. Investors are reluctant to give up property.

While the long term solution for the housing market would be for builders to replenish the stock of new homes, they cannot seem to do it fast enough. Builders are completing homes at 65% of the rate they have historically. Builders are also faced with challenges such as the lack of ready-to build lots, costly regulations and a chronic shortage of skilled construction workers.

Despite the scant supply, U.S. home sales are expected to rise this year, economists say. Fueled by job growth, pay raises and still-low loan rates — and perhaps fearful of being left out as more homes are snapped up and prices rise further — many people are looking to buy.