Wow, where did that come from! A near 27% reduction in capacity and the loss of over 3.2 million domestic seats in one week has handed the United States the title as the world’s largest aviation market something no one probably expected. It may be a short-lived gift from China as part of their New Year festivities but nevertheless a dramatic turnaround in just seven days.
In the ongoing fight against the COVID-19 pandemic, an additional $900B of stimulus relief funds were signed into law on December 27th, exactly nine months after and at roughly half the size of the original $2.2T stimulus package that Congress passed in March 2020. The new funds include direct stimulus payments of $600/$1200 to individuals/couples (vs. the first round’s $1200/$2400) plus an additional $600 per child (vs. the first round’s $500).
The Dodge Momentum Index increased 3.1% in January to 139.4 (2000=100) from the revised December reading of 135.2. The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. The commercial component of the Momentum Index moved 9.9% higher, offsetting an 11.7% decrease in the institutional component.
In this Placer Bytes, we dive into the office supplies sector and the data from Macy’s outdoor concept – Market by Macy’s. While not quite as catchy as the Chicken Wars the battle for supremacy in office supplies warrants notice, especially with Office Depot recently rejecting a Staples acquisition offer. Looking at both brands, there is a clear narrative guiding the conversation around the sector – how can it survive?
Before we jump into our data for January, which is generally positive, there are some particular patterns related to how companies manage their job openings on their own company website that have a material impact on our data every January. It’s been a long time since I’ve seen anyone write about ADP’s Purge Effect where HR departments clean up their payroll systems at year-end and remove people that are no longer employed at the company because they left or were let go during the year, but the increase in activity around job openings in January is quite similar.
Consumer Edge data has been a strong predictor of H&M sales growth in both the US and the UK. But, the similarities between the markets may end there. In this week’s Insight Flash, we compare trends in both markets to assess differences in growth rates, which months are the most important to monitor trends, and brand performance. The US and the UK markets behave very differently, making it crucial to be able to track trends in both.
The pandemic has touched all parts of society. But as new data from Huq Industries shows, the effect has been felt unevenly and particularly in respect of different socio-economic groups. We are all encouraged to stay at home where possible, and to limit our movements and social interactions. To that end, the chart below offers a measure of footfall into town and city centres across the UK, broken out by income group tercile.
After a dismal second quarter 2020, the national ad marketplace ended with a strong fourth quarter. SMI reported no category was stronger in the final quarter than Consumer Packaged Goods, with year-over-year ad spend growth of +34%, the most of any vertical. For calendar year 2020, CPG ad spend grew +10%, compared to -7% for the entire ad market.
As reported in today’s Financial Times, traffic through UK ports remains a quarter down on the levels seen pre-Brexit with delays up nearly a fifth. But levels associated with Brexit are muted in comparison to those seen during the first wave of the Covid-19 pandemic.
Britain’s battered pub and restaurant sector is staring at its worst period of the pandemic as footfall flatlines for more than a month. The Huq Index for Restaurants & Pubs fell sharply post December 10th, and has stood at 5pts since January 9th – down 4.6pts in the last 30 days and little discernible movement in the last seven. Of the three constituent sectors, Pubs, Restaurants and QSR, Pubs have been the worst affected – reading less than 1pt over the equivalent period.
Credit Benchmark have released the January Credit Consensus Indicators (CCIs). The CCI is an index of forward-looking credit opinions for US, UK and EU Industrials based on the consensus views of over 30,000 credit analysts at 40 of the world’s leading financial institutions. Drawn from more than 800,000 contributed credit observations, the CCI tracks the total number of upgrades and downgrades made each month by credit analysts to chart the long-term trend in analyst sentiment for industrials.
The pandemic hit the U.S. hotel sector hard in 2020. Between travel bans and the economic downturn, the impact to the sector which had already shown some cracks was swift and steep. Transaction volume in the sector fell by more than two-thirds compared with 2019, to the lowest level since 2009. However, the misery was not experienced equally across all chain scales. In 2020, investors had a clear preference for economy branded hotels.
The charge to produce vaccines and treatments for the Covid-19 outbreak is reflected in the relative strength of productivity across biotechnology research and production facilities, compared with its wider industrial peers.On the 26th January, Biotech came within -9.2% of year-on-year levels – averaging 83.2pts for the month of January. By contrast, on Jan 23rd Huq’s European industrial average fell 41.5pts behind year-on-year levels, averaging 71.8pts for so far this year.
It was the best of times, it was the worst of times . . . actually, the COVID-19 pandemic has just been the worst of times. But it has led to interesting divergences in the US and UK grocery markets. In today’s Insight Flash, we compare the two, digging deep into relative performance and market share for Instacart in the US and Ocado in the UK, in our first-ever flash leveraging our brand-new UK dataset.
In a year dominated by headlines around the struggles of apparel, the wider athletic apparel and athleisure space outperformed. When analyzing Under Armour, Nike and Lululemon we see all three brands enjoying year-over-year growth in January and February before the pandemic brought visits to a screeching halt. The three also recovered exceptionally well with visits down just 2.1% and 9.7% year over year for Nike and Lululemon respectively in October, while Under Armour saw 8.4% year-over-year growth that same month.
“Buy now, pay later” may as well be America’s motto. Credit has always been an important driver of the economy, but a new batch of installment payment brands making microloans to consumers have come onto the scene recently as major disruptors to more traditional credit cards.
Shopping habits changed in 2020. Instead of wandering into brick-and-mortar businesses, we spent hours window shopping on the internet. And, if you’re anything like me, you relied a little too heavily on that “Add to Cart” button for a quick rush of quarantine-style serotonin. The proof? Other than the pile of boxes in the corner of my room? US Shopping app sessions increased 65.9% YoY in Q4. A session occurs every time someone opens and uses an app. More sessions, more sales.
In this Placer Bytes, we dive into Tractor Supply’s success and analyze what’s hurting IKEA. While Home Depot and Lowe’s get the bulk of the attention for the home improvement surge, one brand that has matched their impressive runs is Tractor Supply. The company has seen a huge surge since the onset of the pandemic, and the company seemingly got stronger as the year progressed.
In the most recent edition of our quarterly Economic Indicators Report, we see promising signs of recovery from the coronavirus pandemic. The fourth quarter of 2020 saw an increase in active job listings and a decrease in volatility. Overall, total active job listings increased more than 6% in Q4. This is almost an exact flip from the same period in the previous year–Q4 2019 saw active job listings down 5%. At the state level, the quarter showed widespread positive movement. An impressive 49 states saw gains over the quarter, leaving South Dakota as the only state with a loss in active listings.
The value of commercial and multifamily construction starts in the top 20 metropolitan areas of the U.S. lost 23% in 2020, falling to $111.1 billion according to Dodge Data & Analytics. Nationally, commercial and multifamily starts tumbled 20% over the year to $193.4 billion. Commercial and multifamily construction starts in the top 10 metro areas dropped 23% during the year with only one metro area — Phoenix AZ — reporting an increase.
