Member BriefingMarch 6, 2024
Factory Orders Sink 3.6% on Fewer Boeing Contracts. U.S. Business Investment Still Weak.
New orders for U.S.-manufactured goods dropped more than expected in January, pulled down by a sharp decline in bookings for commercial aircraft, but demand for computers and electronic products accelerated. Factory orders fell 3.6% after slipping 0.3% in December, the Commerce Department's Census Bureau said on Tuesday. They decreased 1.6% year-on-year in January. Commercial aircraft orders plunged 58.9% in January after rising 1.0% in December.
Nondefense capital goods orders plummeted 19.5%. These shipments go into the calculation of the business spending on equipment component in the gross domestic product report. Business spending on equipment has contracted for two straight months. Orders for machinery slipped 0.3%. There were also declines in orders for primary metals and fabricated metal products. Shipments of manufactured goods fell 1.0%, while inventories dipped 0.1%. Unfilled orders at factories rose 0.2% after advancing 1.3% in the prior month.
Siena’s Upstate New York Business Leader Survey Drops to All-Time Year Low
Sixty-seven percent of Upstate New York CEOs say business conditions are getting worse according to the 17th annual Upstate New York Business Leader Survey from Siena College Research Institute (SCRI) sponsored by the Business Council of New York State, Inc, UHY Advisors, Inc. and HVEDC. Only 18% of CEOs expect the economy to improve in 2024 while 55% see worsening conditions in the next year.
- Twenty-nine percent, down from 38% last year and 47% two years ago, predict increasing revenues in 2024 while 21%, down from 26% a year ago and 34% two years ago, anticipate growing profits in the year ahead.
- The index of CEO Sentiment, computed by considering all CEOs assessment of both current and future conditions across New York and within their industry sector is down 8 points reaching the lowest point this survey has found since the all-time low in 2008.
- Twenty-nine percent of CEOs, down from 33% last year and 44% two years ago, plan to increase the size of their workforce this year, but again this year 80% say that there is not an ample supply of appropriately trained local workers.
- And for the second consecutive year, 75% are having difficulty recruiting for their open positions.
- Asked to assess the quality of recent applicants on seven job skills, large majorities of CEOs give negatives grades on each: realistic about compensation (77%), work ethic (73%), initiative (73%), writing skills (69%), professionalism (67%), verbal skills (60%) and technical skills (60%). While 26% describe New York’s workforce as an asset to doing business here, a majority, 51% say the workforce is a detriment to succeeding here in New York.
- Eighty-one percent of CEOs say that New York State government is a detriment to doing business in New York. Only 11% think the government of New York is doing either an excellent or good job of creating a business climate in which companies like theirs can succeed.
- Over half would like to see the Governor and Legislature focus on business and personal tax reform and spending cuts while over 40% call for infrastructure development, workforce development and business development incentives.
- Looking to the future, only 14%, down from 17% a year ago, are confident in the ability of New York’s government to improve the business climate over the next year.
- Nearly 90% of Upstate CEOs say both that the federal government is doing no better than a fair or poor job of creating a business climate in which they can succeed and that they are no better than not very confident in the ability of the federal government to improve business conditions.
Read more at Siena College Research Institute
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- UN Team Says Rape, Gang Rape Likely Occurred During Hamas Attack on Israel - Reuters
- Israel Says Over 450 UN Aid Agency Workers in Gaza Are 'Military Operatives' - Reuters
- Mediators Try to Buy More Time as Israel, Hamas Dig In Heels on Truce Talks - WSJ
- Hopes for Ceasefire Falter Ahead of Ramadan - BBC
- Four Fiber Optic Cables Damaged In Red Sea: Here’s What We Know - Forbes
- By the Numbers: How Conflict in the Red Sea Disrupts Global Trade – Politico
- Vice President Harris Hosts Israeli War Cabinet Member as the US Pushes to Get More Aid Into Gaza - AP
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
Ukraine
- Ukraine and Russia: The Latest News – The Guardian
- Ukraine Needs Long-Term Plan for Food Exports to EU, Official Says – Reuters
- Kharkiv Opera and Ballet to Reopen Underground - BBC
- Ukraine Claims it has Sunk Another Russian Warship in the Black Sea Using High-Tech Sea Drones - AP
- Berlin Blames Taurus Call Leak on Officer Logging in Via Insecure Singapore Hotel Line - Politico
- German Leak Due to Individual Error, Minister Says - BBC
- What NATO Allies Must Do to Prepare for Russian Aggression - Politico
- Interactive Map: Assessed Control of Terrain in Ukraine – Institute for the Study of War
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Other Headlines
- Chinese And Philippine Coast Guard Vessels Collide In South China Sea Amid Tensions - Forbes
- France Slashes Olympics Opening Ceremony Crowd Size Amid Terror Attack Fears – Politico
- In Argentina's Barrios, Rising Poverty Stalks Milei's Austerity Drive – Reuters
- Japan Says China's Rapidly Rising Military Power 'Serious Concern' - Reuters
- Violence and Rights Abuses Threaten South Sudan’s Stability - AP
- North Korea Hacked South Korea Chip Equipment Makers, Seoul Says - BBC
- Report Sounds Alarm Over Rise in Waste Generation – Inter Press Service
Policy and Politics
Here’s Who Could Replace Mitch McConnell—As John Thune Runs For GOP Leader
Sen. John Thune, R-S.D., announced Monday he is running to replace Mitch McConnell as Republican Senate leader when the Kentucky lawmaker steps down in January—becoming the second of at least four senators expected to run for the position. Sen. John Cornyn, R-Texas, former GOP whip and former head of the National Republican Senatorial Committee, was the first to announce his candidacy Thursday, in a statement expressing his belief “the Senate is broken,” while touting his role in helping “Trump advance his agenda through the Senate, including passing historic tax reform and remaking our judiciary.”
Sen. Rick Scott, R-Fla.—a staunch conservative, close ally of former President Donald Trump and McConnell adversary—also said Friday on “The Charlie Kirk Show” podcast he is “seriously considering” running for the leadership role, after losing to McConnell in a 37-10 vote in 2022. Thune and Cornyn, along with Sen. John Barrasso, R-Wyo., known as the “three Johns” on Capitol Hill and all close confidants to McConnell, have topped the shortlist of the most likely McConnell replacements since talk of McConnell’s retirement has bubbled in recent years.
New York State Assembly Speaker Carl Heastie Discusses Budget Issues, Education and Housing
With redistricting in the rearview mirror and one-house budgets expected to be released next week, New York state Assembly Speaker Carl Heastie discussed a variety of topics, including education aid on Spectrum New’s Capital Tonight. The speaker stated he is looking to make sure rural and suburban schools don’t lose money in this year’s budget; and that there is an appetite for revisiting the Foundation Aid formula. “We would, of course, make sure the districts are whole, but we are open to re-examining the Foundation Aid formula,” Heastie said of school funding. “But we want to make sure that our rural and suburban districts aren’t harmed by any proposal.”
The governor’s executive budget proposal does away with the “Save Harmless” provision of the Foundation Aid formula, which ensured that districts never received less aid than they did the year before. On housing, when asked if leaders and the governor must hammer out a proposal this year, Heastie said yes. “I do think it’s critical to come up with a statewide housing plan,” he said.
Read more at NY State of Politics
New Pattern for Progress Report Examines the State of Childcare in the Hudson Valley
Childcare is essential to support our workforce and educate our kids. So why is this service steadily dwindling in the Hudson Valley? Pattern for Progress attempts to answer this question and seeks solutions to improve the system with its newest research report. The regional planning organization found that, although each person in the childcare continuum looks at the problem from a different angle, parents, employers, childcare providers, and policymakers all agree on one thing: Childcare in the Hudson Valley is dwindling, expensive, and struggling to remain viable under stress from demographics, economics, and shifting policies.
There are currently 1,685 childcare providers in the Hudson Valley, and those businesses are licensed for a maximum of 82,301 seats. According to the latest data from the U.S. Census, our region is home to approximately 143,000 kids under the age of 5. If every childcare business in the region served the maximum number of kids allowed, there would currently be enough childcare seats for about 58 percent of kids who have not begun primary school.
Read the report and summary at Pattern for Progress
Health and Wellness
Higher Blood Caffeine Levels Linked to Lower Obesity and Osteoarthritis Risk
According to the latest research, more than 1 billion people around the world — both adults and children — have obesity. Obesity can increase a person’s risk for several health problems, including joint conditions such as osteoarthritis. This is because when a person carries too much weight, it puts additional strain on the knees, hips, and ankles. Now, researchers from Imperial College London in the United Kingdom and from the University of Copenhagen in Denmark have found that higher levels of caffeine in the blood over a long period may help protect the body against both obesity and joint disease.
The researchers found that long-term increases in circulating caffeine may help lower body weight and a person’s risk of osteoarthrosis and osteoarthritis. They also confirmed prior genetic evidence of a protective effect of plasma caffeine on a person’s obesity risk. “We have previously performed such analyses to find evidence supporting [the] effects of plasma caffeine on reducing obesity,” Dr. Gill said. “The current work reinforced these findings and further extended to potential beneficial effects on risk of osteoarthritis.”
Read more at Medical News Today
Election 2024
- Super Tuesday: Biden and Trump Steamroll Through Primary States, Haley Wins VT – Reuters
- RFK Jr. Fuels Talk of Libertarian Party Switch – The Hill
- Independent Sen. Kyrsten Sinema of Arizona Won’t Seek Reelection, Avoiding 3-Way Race - AP
- California Senate Polls: Schiff Helps Garvey Edge Out Fellow Democrats – New York Magazine
- Seven US House of Representatives Races to Watch in 2024 - Reuters
- Real Clear Politics Latest GOP Primary Polls – Real Clear Politics
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Latest Polls - FiveThirtyEight
Industry News
ISM Service-Sector Gauge Stumbles in February But Stays in Expansion Territory
The Institute for Supply Management said on Tuesday that its service-sector PMI fell to 52.6% in February from 53.4% in the prior month. The drop was bigger than expected. Numbers over 50% indicate expansion in the economy. The non-manufacturing index has been above 50 since December 2022. A separate gauge, the S&P Global U.S. Services PMI posted 52.3 in its final reading in February. That's up from a "flash" reading of 51.3. The PMI was 52.5 in January.
The measure of new orders was 56.1 in February, up from 55 in the prior month.
The employment gauge contracted for the second time in three months.
IT fell to 48.0 from 50.5 in the prior month.
A measure of prices paid for services fell to 58.6 from 64 in January. While that's a slowdown from the prior month, upward price pressures continue.
The service sector has been an important ingredient in keeping the economy surprisingly strong over the past six months. The pace hasn't been strong but it's been steady. "The report continues to reflect steady, incremental growth for the services sector," said Anthony Nieves, chair of the ISM's service PMI survey. He noted that prices continue to rise, even if it is at a subdued pace.
Nippon's $14B US Steel Takeover Faces Pushback
A senior Nippon Steel executive told Reuters he is set to meet the United Steelworkers (USW) union chief this month to seek support for acquiring U.S. Steel (X.N), opens new tab, expressing confidence the deal can be finalized by the end of September. Mori will meet the USW chief in early March after a non-disclosure agreement it signed with the union on Feb. 26, which he sees as a positive indicator since it signaled their willingness to talk.
Gaining their backing could help the world's fourth-largest steelmaker carry the $14.9 billion purchase of its U.S. rival over the line. The merger has drawn criticism from some Democratic and Republican lawmakers who worry about the national security implications of the takeover, even though the U.S. and Japan are close allies, and the powerful USW, who worry how their workers could fare under Nippon Steel's management.
China Vows to 'Transform' Economy, Sets Ambitious Growth Target
Chinese Premier Li Qiang announced an ambitious 2024 economic growth target of around 5% on Tuesday, promising steps to transform the country's development model and defuse risks fuelled by bankrupt property developers and indebted cities. Delivering his maiden work report at the annual meeting of the National People's Congress, China's rubber-stamp parliament, Li also flagged higher defence spending, while hardening the rhetoric on Taiwan. The International Monetary Fund projects China's 2024 growth at 4.6%, declining towards 3.5% in 2028.
With awe at China's economic miracle fading rapidly, some economists have drawn comparisons with Japan's lost decades since the 1990s, calling for pro-market reforms and measures to boost consumer incomes. "We should not lose sight of worst-case scenarios," Li said. There was no timeline or concrete details for the structural changes China intended to implement, however, with Li also emphasising stability as "the basis for everything we do". Li acknowledged reaching the target "will not be easy."
Tesla Germany Halts Work as Musk Calls Suspected Arson 'Extremely Dumb'
Tesla's European Gigafactory near Berlin has halted work until further notice after what CEO Elon Musk called an "extremely dumb" suspected arson attack nearby left it without power on Tuesday. The attack southeast of the German capital set an electricity pylon close to the site ablaze, but the fire did not spread to the Tesla facility - the U.S. electric vehicle maker's first manufacturing plant in Europe. It has however shuttered production at least until early next week, the company said.
It has however shuttered production at least until early next week, the company said. Joerg Steinbach, the economy minister of Brandenburg, the German state where Tesla's plant is based, condemned the suspected attack as having "terrorist markings", and hitting tens of thousands of people. Local media published a letter purportedly from a far-left activist organization called the Volcano Group that claimed responsibility for the incident, in a 2,500-word attack on Tesla and its billionaire CEO Musk.
Apple Fined $2 Billion in One of Europe’s Largest Antitrust Actions
The European Union fined Apple AAPL -2.54%decrease; red down pointing triangle about $2 billion, saying the iPhone maker set unfair rules for developers of music-streaming apps. The fine was one of the EU’s largest-ever antitrust penalties. The European Commission, the EU’s executive body, said it found the company violated antitrust rules by restricting app developers from telling users about alternative ways to subscribe to music-streaming services. The commission said it ordered Apple to change its practices. Apple said it plans to appeal the decision, which it said was reached “despite the Commission’s failure to uncover any credible evidence of consumer harm.”
Monday’s fine is the culmination of a multiyear investigation into Apple’s App Store practices and represents one of the largest antitrust penalties ever imposed by the Commission against a single company. Google has faced larger fines—of €4.34 billion and €2.42 billion—in two separate cases that the tech company has appealed.
American Airlines Taps Boeing, Airbus, Embraer for 260 Jets
American Airlines has booked an expansive series of orders for 260 new aircraft with Boeing, Airbus, and Embraer, aiming to update and replace its current fleet of narrow-body aircraft. The total includes 85 new 737 MAX 10 jets from Boeing, 85 Airbus A321neo aircraft, and 90 new Embraer E175s. The orders also include options or purchase rights for a further 193 new aircraft.
With Boeing, American also plans to convert existing orders for 30 Boeing 737 MAX 8 into 737 MAX 10s – though it’s noteworthy that the MAX 10 has yet to be certified by FAA, and FAA’s ongoing focus on the 737 MAX program may prolong that effort further. Airbus noted that American is already the world's largest operator of A320 series aircraft, and the world’s largest operator of the A321neo and A321ceo versions, and the largest North American customer for the A321neo. Currently, many of American’s feeder regional routes are based on a Embraer E-Jet aircraft, and the supplier noted that the carrier aims to replace the 50-seat single-class regional jets by the end of the decade, and to serve small and medium-sized markets with larger regional aircraft.
Read more at American Machinist
Dartmouth Men’s Basketball Team Votes to Unionize, a First in College Sports
Dartmouth University’s men’s basketball team voted to unionize on Tuesday, bringing them one step closer to becoming the first collegiate labor union. The whole team participated in a 13-2 vote in favor of joining the Service Employees International Union (SEIU) Local 560. The school will have until March 12 to file an objection to the union election with the National Labor Relations Board. The school has already put out a statement emphasizing the athletes are not employees, so it doesn’t believe this union “is appropriate.”
“… the students on the men’s basketball team are not in any way employed by Dartmouth. For Ivy League students who are varsity athletes, academics are of primary importance, and athletic pursuit is part of the educational experience. Classifying these students as employees simply because they play basketball is as unprecedented as it is inaccurate. We, therefore, do not believe unionization is appropriate,” the school said in its statement.
Restoring National Chemical Security Program Vital to Combating Terrorism
According to a new survey report released by the American Chemistry Council (ACC), the country lost valuable tools to fight terrorism and secure chemical facilities when Congress allowed the Chemical Facility Anti-Terrorism Standards (CFATS) to expire last July. After delivering solid results for almost two decades Congress failed to pass legislation to reauthorize CFATS. ACC conducted a survey of member companies to better understand the concerns and impacts regarding the expiration of CFATS.
“For the first time in nearly two decades our country finds itself without a chemical security program,” said Chris Jahn, ACC’s president and CEO. “The loss of CFATS is a gift to our adversaries and makes it easier for terrorists to attack our country.” “CFATS provided a powerful one-two punch in the fight against terrorism,” Jahn explained. “The program was highly effective in helping companies vet personnel for potential ties to terrorism and beef up their security plans. CFATS is a good example of how smart regulations can help the protect the country and provide value to the regulated community. The House and Senate must do their jobs and restore CFATS.”
Read more at The American Chemistry Council
GM Readies Test Fleet Of Heavy Pickups Powered By Green Hydrogen
General Motors has experimented with hydrogen fuel cells for decades but doesn’t yet use them in vehicles it sells. That may change as the largest U.S. automaker prepares to test medium-duty pickups fueled by carbon-free green hydrogen, deploying them as work trucks for a power company. GM’s HYDROTEC unit said pickups based on its 2024 Chevrolet Silverado 5500 model equipped with its fuel cell system will be used for commercial applications later this year by Atlanta-based Southern Company, one of the country’s largest utilities.
The test program is being partially paid for by a $26 million Energy Department grant GM received in 2021. The company didn’t say how many of the fuel cell trucks — which weigh 19,500 pounds, similar to diesel version it sells — will be built for the program or whether it intends to eventually commercialize them. The high-powered fuel cell system in the trucks “can produce more than 300 kilowatts of peak power” and serve as a mobile generator to “power job sites or bring charging to EVs in areas where traditional charging is not available,” Jacob Lozier, HYDROTEC’s program manager, told reporters. “It has enough power and energy to provide power for up to 250 American homes” for a day.