Synergy Thermal Foils

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.

According to the most recent report by Smith and Leonard, residential furniture orders rose 12% in March compared to March 2016 and 17% higher than February 2017 orders. New orders were up 77% of the surveyed participants.

Although consumer confidence looks to be positive, “Converting that confidence to more activity seems to be the trick,” said Ken Smith, managing partner at Smith Leonard. “The March results of our survey were maybe a bit higher than we expected. Though most of what we had heard prior to the High Point Market had indicated that business had picked up. With over three-fourths of the participants reporting increases in orders, those expectations seemed to carry over into what we thought was a pretty good market.”

He added, “While the overall economic conditions in the U.S. continue to be a bit sluggish, the key factors continue to be somewhat strong. While housing is off a bit, the stock market has been very strong; inflation is not bad except for energy indexes and retail in general is positive, along with good consumer confidence. All of this together should continue to produce more furniture sales along the rest of the year.”

For more information, please visit Smith & Leonard

Thirty-nine states added construction jobs between March 2016 and March 2017 while 17 states added construction jobs between February and March, according to an analysis by the Associated General Contractors of America of Labor Department data released today. Association officials noted that contractors in most states remain busy for now but worry about not being able to find enough workers to complete projects in the future.

California had the highest increase in construction jobs with 42,000 jobs added in the past year, followed by Florida with 36,500 jobs and Texas with 18,900 construction positions.

Construction jobs are projected to increase 6.5% by 2024 according to the U.S. Department of Labor Statistics due to an increase in residential and non-residential construction. The demand for single-family housing and multi-family housing has greatly increased due to a lack of inventory of available homes.

During March 2017, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development, there was a 5.8% increase of new home sales over February 2017. This was also a 15.6% increase over March 2016 estimates. This represents a supply of 5.2 months at the current sales rate.

While construction has continued to expand, the industry is now hitting a wall. The lack of skilled tradesmen has been sharply felt within the past few years. Most contractors are quoting longer completion times or passing up opportunities to big on new projects as a way of coping with shortages of available qualified workers.

According the study “Young Adults & the Construction Trades” by the National Association of Home Builders (NAHB) only 3% of individuals between the ages of 18-25 want to work in construction trades and 26% of individuals said they were uncertain of career paths. Of those 26% of respondents, only 18% said they would consider the construction industry if the pay was high enough. While 68% of the uncertain respondents would not consider the construction industry even if the pay was satisfactory said that the jobs were too physically demanding or that construction work was difficult.

The lack of skilled tradesmen have led to government intervention. North Idaho College has been awarded a $482,582 grant by the Idaho Department of Labor to train more than 200 workers in the wood products manufacturing industry and Michigan lawmakers have passed a budget that would offer increased funding for skilled trades.

Decorative laminates have steadily increased in use since 2010 as a cheap and durable alternative to traditional wood products. With rising housing starts and increases in commercial construction following the housing bubble burst in 2008, the demand for cost effective building materials increased and caused a shift towards decorative laminates.

According to the report “Decorative Laminates Market” by Markets and Markets ™, the decorative laminate market is estimated to grow from $6.71 billion in 2016 to $8 billion by 2021, at a CAGR of 3.5% from 2016-2021.

Based on end-use sector, the non-residential sector led the decorative laminates market in 2016 followed by the residential sector. The non-residential sector is forecasted to continue the lead, decorative laminates are being utilized in restaurants, laboratories, educational institutes, office furniture, hospital, hotels, and retail shops.

Decorative laminates are estimated to surpass 12 billion square meters by 2023 with thermoplastic films and saturated papers growing the fastest, according to the Fredonia Group.

Thermoplastic films which include polyvinyl chloride (PVC, also referred to as 3D laminates) and polyester (PET) films are growing in popularity due to long term durability and cost effectiveness. Over the years, changes in film composition allows for adding highly durable top coats and wear layers which increase scratch resistance and longevity of the finished product. There is also a vast array of design options ranging from wood grains, solids, stones, and abstract patters accompanied by various finishes such as high gloss, supper matte and deep emboss textures.

For residential consumers the design flexibility allows users to achieve exotic high end looks without consuming virgin wood or mineral resources that does not sacrifice look and feel of the space. For non-residential users 3D laminates are utilized for their distinct properties such as durability, high impact strength, cost effectiveness, variety, microbe-resistant, easy to maintain, customizable, easy installation, and lavish elegant looks. Non-residential uses can be seen in store fixtures, sculpted wall panels, office furniture products and specified healthcare applications.