Boston e-commerce software company lands big venture capital round

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CONSTRUCTION

Homebuilder sentiment at two-year low as inflation and rising rates dampen demand

US homebuilder confidence hit a two-year low in June as rising inflation and rising mortgage rates weighed on housing demand. The National Association of Home Builders/Wells Fargo gauge fell two points in June to 67, the lowest level since June 2020, figures showed Wednesday. This marked the index’s sixth consecutive decline. Homebuilders are facing a general downturn in the housing market. A rapid rise in mortgage rates has reduced affordability and led to slower home sales in recent months. In the meantime, delivery times for materials remain long, costs are high and labor is still hard to find. “The housing market faces both demand-side and supply-side challenges,” Robert Dietz, chief economist at NAHB, said in a statement. “Residential building material costs rose 19% year over year with cost increases for a variety of construction inputs.” The group’s traffic gauge of potential buyers fell five points to 48, the lowest since June 2020. The current sales measure also fell to a two-year low, and sales expectations for the next six months fell to their lowest since May 2020. ― BLOOMBERG NEWS

IMMOVABLE

Home prices and sales fall again in Canada as mortgage woes escalate

Home prices in Canada fell for the second month in a row, as soaring borrowing costs led to a reversal in what had been one of the fastest growing real estate markets in the world. The benchmark price of homes in Canada fell 0.8% to around $635,000 in May from a month earlier, according to data released Wednesday by the Canadian Real Estate Association. Cities in Ontario posted the largest declines. Sales also fell 8.6% from the previous month, the association said. The drop comes after home prices in Canada soared more than 50% over a two-year period as rock-bottom interest rates and demand for larger living spaces led to property wars. auctions for properties. Now, as the Bank of Canada tries to contain inflation hovering near 7%, mortgage rates are rising rapidly and policymakers have identified high house prices and heavily indebted homeowners as the main vulnerabilities in the economy. economy. The central bank has raised its key rate from 0.25% to 1.5% since early March, while even more aggressive increases could be announced next month. ― BLOOMBERG NEWS

DISPATCH

Massive freighter freed after running aground near Georgia port

Authorities are investigating what caused a cargo ship to run aground along the shipping channel to Georgia’s busiest seaport. The Danish-flagged container ship Maersk Surabaya ran aground Tuesday night while cruising the Savannah River en route to the port of Savannah, the US Coast Guard said. Seven tugs pushed the vessel 1,000 feet toward the center of the shipping channel and no injuries or pollution were reported, the Coast Guard said in a news release Wednesday. The ship was moored at the port quays on Wednesday morning. The Port of Savannah is the fourth-busiest U.S. port for handling containers, giant metal boxes used to ship goods ranging from consumer electronics to frozen chickens. ― ASSOCIATED PRESS

MANUFACTURING

Lego will build a billion dollar factory in Virginia (but not from Legos)

Hoping to shorten the supply chain for its popular building sets, toymaker Lego said Wednesday it plans to invest $1 billion in a new factory in Chesterfield County, Virginia. The 1.7 million square foot plant is expected to start producing plastic bricks. by the second half of 2025, is expected to create more than 1,760 jobs over 10 years, Lego said in a statement. The site was chosen in part for its access to the nation’s transportation networks, Lego Group chief executive Niels B. Christiansen said in the statement. The Virginia factory will be Lego’s seventh in the world and the second in America. Lego also said it plans to expand its Monterrey site in northeastern Mexico, which manufactures products primarily for the US market. In December, the company announced plans to build a factory in Vietnam. Lego, which is based in Billund, Denmark, has seen big gains during the pandemic as consumers have turned to its building sets for entertainment during and after lockdowns. – NEW YORK TIMES

HEALTH CARE

America’s elderly are skimping on food and clothing to pay for health care

Older Americans are sacrificing basic necessities to afford expensive healthcare services, according to a survey that shows how many seniors are cutting out-of-pocket spending to meet their medical needs. Out-of-pocket healthcare costs for seniors in the United States rose 41% between 2009 and 2019, according to findings from analytics firm Gallup Inc. and West Health, a nonprofit that focuses on care for the elderly. According to the survey, about 9% of Americans 65 and older spent less on food, 6% reduced spending on utilities, and 19% reduced spending on clothing to help cover healthcare costs. The US population of people aged 65 and older will reach 77 million by 2034, up from around 52 million today according to the US Census. The continued rise threatens to exacerbate the hardships of older people, who are already struggling to pay for services. Seniors are also foregoing vital medical needs: 12% of respondents said they or a family member had skipped seeking treatment for a health condition because of the cost. About 11% of people have taken the plunge of looking for prescription drugs to save money. More than a third of seniors said they were worried about their ability to afford care in the coming year. Nearly half of Americans between the ages of 50 and 64, who are not eligible for the US Medicare health program for seniors, shared the same concerns. The data comes from a survey of 6,663 adults ages 18 and older in all 50 states and Washington. It was conducted by Web from September 27-30 and October 18-21, 2021. ― BLOOMBERG NEWS

ENERGY

Russia’s oil production increased last month, despite sanctions

Russia continues to find buyers for its oil despite Western sanctions. Although production fell immediately after Russia invaded Ukraine, it bottomed out and even increased slightly recently. In May, Russian production of crude oil and related liquids increased slightly, from about 130,000 barrels per day in April to 10.55 million barrels per day, according to the International Energy Agency. The agency’s monthly oil market report, released Wednesday, describes a world of oil-consuming countries in dire straits. The United States, the European Union and other nations want to squeeze Russia, depriving it of oil and gas revenues to fuel its war in Ukraine. So far, this effort appears to be failing. The agency estimates that Russia gained $20 billion in May from oil sales, an increase of $1.7 billion from April, partly due to high prices. Global oil prices are already high – with Brent futures at around $120 a barrel, nearly double the price a year ago – and prices for diesel and other refined products are even higher , and things could get worse. If sanctions against Russia tighten, “global oil supply could struggle to keep pace with demand” in 2023, the agency warned. Overall, Russian production has fallen by 850,000 barrels per day, or about 7.5%, since before the invasion of Ukraine, but the country’s industry has managed to pump in faster than expected by many many analysts. India is doing the most to bail out Russia. Moscow exported 1 million barrels of oil a day to India in April and 900,000 a day in May, a huge increase from the 2021 average of 100,000 barrels a day. China, traditionally a big buyer of Russian crude, also bought more Russian oil, as did Turkey, the agency said. – NEW YORK TIMES

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