Construction spending up 10.7% YoY in the US | Warehouse leases jump as inventories, activity normalize | Associated Food Stores opens smaller concept stores
Construction spending in the US increased a higher-than-expected 0.6% in October, with strong gains in single-family homebuilding more than offsetting a decline in multi-family projects. Residential construction increased 1.2%, fueled by a 1.1% boost in single-family building. Spending on manufacturing construction projects increased 0.9%. Overall US construction spending is up 10.7% from a year ago, according to the Commerce Department.
Following two-plus years of carrying excess inventories, many US retailers, manufacturers and logistics providers are sufficiently destocked and planning for a cautious ramp-up in orders next year. However, many wholesalers are still experiencing inventory gluts that could last through mid-2024 before normalizing, according to Michigan State university logistics professor Jason Miller. Companies should also expect higher rates for warehouse leases or new properties as rising demand and low vacancy rates have led to a 15% increase in the average cost of industrial space over the past year.
Associated Food Stores has launched its Macey's Market concept stores with smaller, centralized areas and products tailored to neighborhoods. The Utah-based company opened the first such store in Park City, Utah, last month with a ribbon cutting celebration.
Core & Main of St. Louis is acquiring Lee Supply Co., a high-density polyethylene pipe distributor with locations in the eastern US. Lee Supply includes four locations in Pennsylvania, South Carolina and West Virginia, and Core & Main says the deal will boost its product portfolio and expertise.
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Retailers are moving away from using past sales to make inventory decisions in favor of AI forecasting models that take factors like shifting shopping trends, viral social media videos and local weather patterns into account. Walmart's inventory management system analyzes search engine and website searches and their regional breakdown as well as weather forecasts for optimal ordering and distribution.
Orders for warehouse fixed automation contracted by 8% year-over-year in 2023 amid an e-commerce slowdown and rising interest rates, estimates Interact Analysis. Conversely, mobile automation investments are expected to jump 38% during 2024 and be driven by manufacturing nearshoring and factory development in the US and Europe, the company predicts.
Amazon unveiled a chatbot for Amazon Web Services customers, Amazon Q, which can be customized and trained on corporate data and costs $20 a month for each user. The chatbot can offer insights on corporate data, generate or summarize content and take actions via plugins, among other capabilities, and is set to rival Microsoft's Copilot offering, OpenAI's ChatGPT Enterprise and Google's Duet AI.
Staying relevant and up-to-date on trends is all part of a marketer's job, but it's important not to forget about updating technology as needed. Out of all the honorees of Fast Company’s Next Big Things in Tech awards for 2023, five of the technologies worth learning more about are Anura, Fetch, MNTN, Typeface, and the Disney Ad Server.
LinkedIn launched a Conversions API for campaign performance tracking without cookies that can accommodate direct and partner integration and track online and offline data. A new Insight Tag also is being released and Document Ads users have expanded capabilities such as retargeting and integrating website visit and conversion objectives.
Higher rates are leading to increased borrowing costs for US firms, particularly those with lower credit ratings. S&P Global Market Intelligence reports the median interest coverage ratio, a measurement of firms' ability to pay their interest expenses, declined for investment-grade and non-investment-grade companies in the third quarter of 2023. However, total debt levels remain stable, with median debt-to-equity ratios decreasing for most sectors and ratings in recent years, but the information technology and industrial sectors are outliers.
Many companies have begun preparing for a wave of climate disclosure rules set to take effect in 2024, with the European Commission having finalized the Corporate Sustainability Reporting Directive and similar efforts underway in the US, UK and Australia. "We have noticed that, due to an evolving landscape, [companies] are facing a 'reporting fatigue' -- confused by the requirements of various standards and frameworks and the requirements of investors and rating agencies," said Global Reporting Initiative CEO Eelco van der Enden.
Experience three days of excellent networking opportunities, cutting-edge content, and educational programming for leaders in the wholesale-distribution industry at NAW's Executive Summit Jan. 30 - Feb. 1. Hear from world-class speakers and explore issues critical to the industry. Be prepared for what's next and learn new strategies to get there first. View agenda and registration information here.
