- Global Business Confidence -26%
- A pall continues to hang over global business
confidence as it has since sentiment collapsed last
fall. Confidence remains near a record low. Views
regarding sales, hiring and investment all remain
extraordinarily poor. Indeed, there are very few positive
responses to any of the questions across all of the
respondents. Most worrisome is the recent collapse
in pricing power; a record over one-third of
respondents now say they are cutting prices for their
goods and services. Confidence is uniformly weak
across all industries and regions of the globe.
- GDP -6.2%
- There was a major downward revision to GDP for
the fourth quarter of 2008. Real GDP fell 6.2% at an
annualized rate in the fourth quarter, according to
Friday's release; in the advance release in January,
the reported decline had been 3.8%. This is the
biggest contraction in real GDP since the first quarter
of 1982. The downward revision was much larger than
expected. Most components contributed to the
downward revision, especially lower investment in
inventories, lower exports, and weaker consumer
spending on nondurable goods. The enormous
contraction in the fourth quarter is a further sign of how
serious the problems in the U.S. economy are.
- Personal Income +0.4%
- Personal income unexpectedly rose 0.4% in
January, a number distorted by several special
factors, after falling 0.2% in December. Wage income
fell for the third consecutive month, driven by large job
losses. Spending rose 0.6%, reversing only part of
December's 1% decline, although this is not a sign of
a resurgence of spending. Real spending rose 0.4%.
The core PCE deflator rose 0.1% after being
unchanged for three straight months. The top-line
deflator rose 0.2% after declining for three straight
months. The saving rate rose to 5% as inflation
adjustments reduced taxes. The rate was revised
upward for prior months, along with wage income
from the inclusion of third quarter QCEW data in the
- Semiconductor Billings -11.9%
- Global semiconductor sales slumped to $15.3
billion in January from $17.4 billion in the prior month
on a three-month moving average basis. A deepening
global recession and very tight credit conditions
continue to weaken demand in consumer,
manufacturing and automotive sectors for
- Agricultural Prices -8.6%
- The preliminary All Farm Products Index of Prices
Received by Farmers declined 8.6% in February. The
crop index is down 7.5% and the livestock index
decreased 4.4%. The index of prices paid for means
of production is down 1.1%.
- Bankruptcy Filings +32%
- With the recession intensifying, both business and
personal bankruptcy filings grew rapidly in the fourth
quarter. The number of personal filings remains low,
however, still impacted by reforms enacted in late
2005. Filings were 32% above last year but remained
more than 20% below the fourth quarter of 2004,
before reform legislation and in a better credit
environment. Business bankruptcies are high by any
measure, with filings up 62% from last year to the
highest level since 1997
- Productivity and Costs
- There was a significant downward revision to
productivity in the fourth quarter and upward revisions
to unit labor costs in both the third and fourth quarters.
Stronger unit labor costs can be traced to a faster
pace of economic contraction and higher labor
compensation to a lesser extent. The report is bad
news with respect to corporate profits.
- Factory Orders (M3) -1.9%
- Factory orders fell 1.9% in January, the sixth
consecutive monthly decline. The decline was smaller
than expected due to an increase in nondurable
goods orders, which was the result of smaller
nominal price declines over the month for petroleum
products. Durable goods orders, which were first
published last week, received an upward revision,
cutting January's decline to 4.5%. Shipments fell for
the sixth consecutive month, also the longest streak of
declines since the series was first published.
- Employment Situation - 651K
- February was a disastrous month for the nation's
labor market. Payroll employment declined by 651,000
while losses increased to 655,000 in January and
681,000 in December. Thus, payroll employment
declined by nearly 2 million jobs in just three months.
Such a plunge was last seen in the mid-1940s when
wartime production was winding down. The
unemployment rate increased by 0.5 percentage
point, to 8.1%.
- Monster Employment Index -26%
- Online recruitment ads placed by U.S. employers
during February rose modestly from a month ago. The
Monster Employment Index rose 4 points between
January and February, ending four straight months of
declines. Of the 20 industries tracked by the index, all
but three reported month-ago increases in job
availability. The index, however, was down 26% on a
year-ago basis, identical to the annual rate of decline
recorded in January, which suggests that the labor
market endured yet another month of steep job
- Mass Layoffs + 158%
- Employers announced job cuts that will hit
186,350 workers in February. This is down from the
January total of 241,749 but is still indicative of a
sharply contracting labor market. Last month's figure
was 158% higher than the total for February 2008. The
auto industry led all others, by far, in the number of
announced cuts, followed by industrial goods, retail,
financial services and electronics.
- Jobless Claims -31K
- Initial claims for jobless benefits decreased
31,000 to 639,000 for the week ending February 28,
exceeding expectations for a milder decline.
Continuing claims decreased as well, dropping
14,000 to 5.106 million for the week ending February
21. Although both indicators dropped in the week, they
still remain very high and appear to be generally
heading higher. Layoffs are rising, and it is difficult for
the unemployed to find new work.
- Construction Spending (C30) -3.3 %
- Construction spending for January fell by 3.3%
from the revised December total and is now down by
9.1% from January 2008. Private construction
spending for January fell by 3.7% compared with
December, led by a 4.3% decline in nonresidential
construction spending, though residential
construction spending also fell by 2.9% from
December to January. Public construction spending
fell 2.3% from December to January. As expected,
construction spending for January continued to
deteriorate because of the economy's worsening
conditions, but the spending decline was worse than
- Pending Home Sales - 7.7%
- Contracts signed for sales of existing homes
plummeted from December to January, indicating that
sales of existing homes are likely to decline in the first
quarter. The pending home sales index fell 7.7% in
January to 80.4, a much larger decline than had been
expected. Further, the index value for December was
revised downward slightly. On a year-ago basis, the
national index is down 6.4%.
- MBA Mortgage Applications Survey -12.6%
- In the week ending February 27, the MBA market
index fell 12.6% to 649.7. Both parts of the composite
also declined. The purchase index fell 5.6% to 236.4,
while the refinance index fell 15.3% to 3,063.4. These
are relatively large swings considering contract rates
held steady; the 30-year fixed rate increased 7 basis
points, while the one-year adjustable rate fell 1 basis
- MBA Delinquency Rates +89bp
- Mortgage delinquency rates set a new all-time
record in the fourth quarter, surging 89 basis points to
7.88%. The performance of mortgage loans has
deteriorated significantly as house prices plummeted
and the unemployment rate soared. There was a
slight increase in the rate of new foreclosures. On a
not seasonally adjusted basis, 1.08% of mortgages
entered foreclosure, up 1 basis point from the prior
quarter. Foreclosure moratoriums prevented the
number of foreclosures from being higher.
- Consumer Credit (G19) +$1.8b
- After declining over the past three months,
consumer credit balances increased unexpectedly in
January. Total credit expanded by $1.8 billion to a total
of $2.564 trillion. Revolving and nonrevolving lines of
credit contributed equally to this increase.
- Vehicle Sales -40%
- The weak economy combined with constrained
access to credit pushed vehicle sales down another
notch in February. Vehicle sales fell to a seasonally
adjusted annualized rate of 9.1 million units. This was
down from 9.5 million units in January and more than
40% below the year-ago pace. Domestic and
international manufacturers alike are selling
significantly fewer vehicles, and sales are falling to
both consumers and fleets.
- Chain Store Sales -0.1%
- Chain store sales improved in February with the
majority of retailers reporting better than expected
same-store sales. In aggregate, sales fell 0.1% for
the month, according to the ICSC, the fifth consecutive
decline, but better than January's 1.6% decline and
expectations. Excluding Wal-Mart, sales fell 4.3%, an
improvement from January's 4.6% drop but less so.
Gasoline prices again were a significant drag on
sales for the month, undermining sales at warehouse
clubs. Luxury sales continued to tumble as
consumers remain intensely focused on necessities
as the overall spending picture remains weak.
- Oil and Gas Inventories -700kb
- Crude oil inventories unexpectedly fell by 700,000
barrels during the week ending February 27,
according to the Energy Information Administration,
below expectations of a 1 million barrel buildup.
Gasoline inventories rose by 200,000 barrels.
Distillate inventories rose by 1.7 million barrels.
Refinery operating capacity rose to 83.1% from 81.4%.
Total domestic petroleum demand rose. This is a
- Weekly Natural Gas Storage Report -
- Working gas in underground storage decreased
by 102 billion cubic feet during the week ending
February 27. The consensus estimate was for a
decline of 100 billion cubic feet.
Public Policy Initiatives
Car Dealership Closures Accelerate
This Weeks Leads
- Utah Employment
- Where the jobs are?
- How do you rank?
- Who is doing better?
- Who is being hit the
About 20,400 more Utahns were out of work in
January compared to the same month last year, with
the historically high number of claims for
unemployment benefits labeled "stunning." The
state's unemployment rate also climbed to 4.6 percent
in January, up from an adjusted December rate of 4.1
percent, the Utah Department of Workforce Services
said. In January of 2008, the jobless rate for the state
was 3.2 percent.
Utah Employment - County January 2007 -
Ranked by %
||Jan 2008||Jan 2009
||# Change 08-09||% Change 08-
Source: Utah Department of Workforce Services,
Utah Labor Market Indicators - January 2009
(December, November, October) 2008
|PUBLIC POLICY INITIATIVES
- NH - Lynch Announces New Online Resource
to Help Citizens Facing Mortgage Problems. Gov.
John Lynch announced a new online resource aimed
at helping consumers address potential mortgage
problems. "With the national recession and ongoing
mortgage crisis, many New Hampshire families are
seeing their dreams of home ownership put at risk. In
these difficult economic times, many New Hampshire
families are struggling to keep their homes and are
looking for help. This new website will help connect
families with the resources they need," Gov. Lynch
- Midwest Governors Move on Plan to Reduce
Carbon Emissions. Wisconsin is among a group
of Midwestern states poised to unveil a regional plan
to limit carbon dioxide emissions that many scientists
say contribute to global warming, Gov. Jim Doyle said.
Doyle said an announcement could come this fall, but
a lot depends on what happens with efforts in
Congress to establish a national energy plan that
calls for reducing greenhouse gases and spurring the
development of clean energy. The regional accord,
which includes Illinois, Iowa, Kansas, Michigan,
Minnesota, Wisconsin and Manitoba Province in
Canada, calls for a cap-and-trade system to curb
carbon dioxide emissions by 15 to 25 percent by 2020
and 60 to 80 percent by 2050. Doyle said Midwestern
governors prefer a national cap-and-trade strategy, but
they believe their states should take the initiative and
they are doing could help inform lawmakers as they
write energy legislation.
- MD - O'Malley Calls For 'Rational
Regulation.' Gov. Martin O'Malley proposed to give
the state government the power to order construction
of new energy plants, reversing a decade of
deregulation of electric utilities. "Deregulation has
failed us," O'Malley said. "Rather than relying on
market forces that have failed to deliver for us, we'll put
those important decisions about securing our energy
future into the hands of the Public Service
Commission." Under the plan, power companies
would only be allowed to recoup their costs when
building a plant, plus a reasonable rate of return,
rather than charge consumers what the market would
- NJ - Corzine Launches Green Jobs Program.
Gov. Jon S. Corzine helped launch a training
program that will create hundreds of so-called green-
collar jobs for high school graduates. The governor
unveiled the $2 million training program at Isles, a
community development organization in the city that
has created a Center for Energy and Environmental
Training, which expects to train several hundred
people this year, and roll out its training program
throughout the state. It's expected that thousands of
jobs, which will involve completing energy audits and
retrofitting buildings to save energy, among others,
will be created in the state during the next few years,
as part of Corzine's goal to reduce greenhouse gas
emissions by 20 percent by 2020.
- OH - Strickland Supports Solar Panels at
Sites. The federal stimulus package will help to
fund installation of solar panels at three Ohio National
Guard facilities, including in Toledo. In Ohio, 22
facilities will be funded with the focus chiefly on
roofing and energy efficiency projects. "Not only will we
extend the lives of the facilities, but we will reduce our
operating expenses and be more environmentally
friendly," Gov. Ted Strickland said.
|THIS WEEKS LEADS:
- Tuesday Morning
- Tuesday Morning, Inc. trades as Tuesday Morning
at 854 locations nationwide.
- The stores, offering
rugs, lamps, books, luggage, china, toys, bed and
bath accessories, holiday decorations and
accessories, garden accessories, stationery,
women's accessories, dinnerware and fine art and
frames, occupy spaces of 8,000 sq.ft. in
entertainment, lifestyle, power, strip, tourist and value
centers, malls, freestanding locations and
- Growth opportunities
are sought throughout the existing market during the
coming 18 months.
- Typical leases run five years
with two, five-year options.
- A vanilla shell is
- Preferred demographics include a
population of 100,000 within a five-mile radius.
- For more information, contact
- Melissa Dean,
- Tuesday Morning, Inc.,
6250 LBJ Freeway,
- Dallas, TX 75240;
- Sleep Number By Select Comfort
- Select Comfort Retail Corp. trades as Sleep
Number By Select Comfort at 465 locations
- The stores, offering air controlled,
adjustable-firmness mattresses, occupy spaces of
1,600 sq.ft. to 2,500 sq.ft. in entertainment, lifestyle
and specialty centers, as well as malls.
opportunities are sought throughout the existing
market during the coming 18 months.
leases run five years.
- Preferred cotenants include
Williams Sonoma, Pottery Barn, Eddie Bauer, Coach,
Brookstone, Banana Republic, J. Crew, The Limited
Too, The Cheesecake Factory and P.F. Chang's.
- Preferred demographics include a population of
150,000 within a five-mile radius earning $50,000 as
the average household income.
- For more information, contact
- Select Comfort Retail Corp.,
59th Avenue North,
- Minneapolis, MN 55442
|Car Dealership Closures Accelerate
- While General Motors and Chrysler Corp. remain
on financial life support and demand for cars and
trucks wanes, the number of shuttered dealerships is
piling up. Since 2005, 1,795 dealerships have closed,
says the National Automobile Dealers Association
- This year, the industry projects a net of 900
closings, dropping the total number of dealerships to
19,075. The closures provide an opportunity for
retailers, office developers and hotel operators to buy
prime sites rarely available for sale.
- "Most of those properties are valuable and there
will be rather strong interest in them," says Chuck
Lanyard, president of the Goldstein Group, based in
Fair Lawn, N.J. "As bad as things are, this economy is
creating a lot of good opportunities for people as well."
- For instance, a year ago Rutherford, N.J.-based
developer Eden Property Co. and partner Landmark
Realty bought a 1.7-acre site in New Jersey from Ford
Motor Co. In June, the site will re-open as a 28,350 sq.
ft. shopping center.
- With car sales slumping by double digits on a year-
over-year basis at each of Detroit's Big Three -
General Motors, Ford and Chrysler - a new wave of
dealership closures appears inevitable. Last year,
vehicle sales in the U.S. declined by 18% to 13.2
million. In 2007, there were 16.1 million sales,
according to NADA.
- To maintain sales at the 2007 level, when each
dealership sold an average of 750 cars, the industry
would need to shutter at least 3,800 locations, reports
Southfield, Mich.-based Grant Thornton. General
Motors has announced closure of up to 2,146
dealerships by 2014. Ford and Chrysler are expected
to follow suit.
- The automotive real estate services group of
Miami-based Colliers Abood Wood-Fay is working on
25 dealership dispositions and expects that figure to
rise by 50% over the next few months, says Michael
Fay, president. The team of Nelson Kramer, a vice
president for CB Richard Ellis in Atlanta, has sold
three dealerships in the past month and has listings
for another eight.
- How the dealership properties will be disposed of
will vary. The assets can either be sold or leased,
depending on the owner's preference.
- Sites in "auto malls," which consolidate several
dealer franchises, might be harder to sell, as their
zoning use is often limited to auto sales by
municipalities dependent on sales tax revenues, says
Cheryl Bloodworth, a vice president with brokerage
Grubb & Ellis in Newport Beach, Calif. Since few
manufacturers are expanding, they could be vacant a
- Stand-alone dealerships, which often boast
locations on heavily trafficked thoroughfares with good
frontage, easy vehicle access and flexible zoning, are
highly desirable for retailers, says Scott Schafer, a
managing director with Cushman & Wakefield in
Buffalo, N.Y. Medical office buildings, hotels and
storage facilities might also find the properties
- Older dealership sites that contain car service
facilities may suffer from environmental problems
related to fuel spillage, which can take hundreds of
thousands of dollars to clean up, Fay notes. However,
many dealers carry environmental insurance and offer
to pay for remediation.
- With real estate investment at a standstill,
dealership sites have been slow to move, says
Schafer. In the fourth quarter of 2008, there were 73
land sales nationwide, a 72% decrease from the
fourth quarter of 2007.
- Dealerships boast some major advantages and
many will eventually sell, says Kramer. "Historically,
they've sold at a premium over other [property] types."
Source: NREI, March 2009
|SOLVING PROBLEMS - CREATING OPPORTUNITIES
Bonneville Research is a regional consulting firm
focused on consulting services to state and local
governments and private companies seeking winning
strategies and achieving impressive results.
Services include economic analysis for
estate development, public-policy analysis,
tourism and economic development
founding in 1976, Bonneville Research has
completed assignments throughout the Intermountain
West yielding unmatched experience in high quality
public policy analysis and economic analysis.
Helping Clients Succeed
Our services include:
- Financial Analysis
- Business License Studies
- Impact Fee analysis
- Urban Renewal & Redevelopment
Analysis and Budgets
- Strategy and Policy Analysis
- Economic and Fiscal Impact Analysis
- Statistical and Survey Research
- Public Sector Mission
Each of our studies is tailored to address
the unique needs of our clients and their communities.
Successful client work requires a
superior team of
outstanding people working fluidly together.
Bonneville Research is the one firm with
the experience and expertise to help
governments and nonprofit organizations
We work to help clients achieve enduring
and improve the communities in which we
Helping West Valley City
Research is currently working with
West Valley City to develop a comprehensive
redevelopment strategy for the future of the important
Redwood Road Corridor.
- For growth and redevelopment of the entire
Redwood Road Corridor within West Valley City;
- To improve the safety and operational efficiency for
all modes of travel, while creating a more
economically productive area, and
- To recognize that in the current economic climate
that total amount of retail space (including Auto
Dealerships) likely will be reduced.
- Redevelopment is one of the most effective ways
to breathe new life into deteriorated areas whose
conditions act as a barrier to new investment by
- Redevelopment enables communities to grow
inward, not just outward.
- Redevelopment enhances and expands local
businesses, renovates declining housing stock and
improves public infrastructure systems and facilities.
- Redevelopment helps encourage new housing
and businesses to locate within already developed
- Redevelopment tools: Urban Renewal/Economic
- Ability to assemble land for development
- Ability to utilize tax increment and issue bonds
- Ability to invest in infrastructure to "lure" private
- Ability to create affordable housing opportunities
- Establish a wide variety of partnerships to
ensure "buy-in" and plan implementation.
- In West Valley City we anticipate using tax
increment and developer incentive tools to enhance
and redevelop four key retail/economic centers along
If we can help you, please call or email us at: