Business Trends

Archive for October, 2009|Monthly archive page

IBM among first U.S. companies to offer 100% primary health-care coverage

In Uncategorized on October 29, 2009 at 5:53 pm

IBM announced that it will provide U.S. employees with 100 percent coverage for primary health care, beginning in 2010. Employees enrolled in IBM plans will receive full coverage throughout the year — no coinsurance or deductible — for in-network primary care with their internist, family practitioner, pediatrician, general practitioner or primary osteopath. IBM will be among the first U.S. companies to cover primary care at 100 percent.

The company also announced a new wellness incentive for employees to encourage changes in lifestyle to build energy, better health and vitality through all aspects of personal well-being — emotional, mental and physical. IBM pioneered the concept of healthy living rebates for its employees in 2004 and the new rebate will be one of five $150 cash incentives available to all full-time IBM employees in the U.S.

“This new approach advances IBM’s advocacy of wellness, preventative and primary care — the cornerstone of keeping people healthy and productive,” said Randy MacDonald, IBM senior vice president, Human Resources. “As a result of our focus on wellness and primary care, IBM employees have become healthier and our costs are rising more slowly.”

IBM’s expanded support for primary care will lower costs for employees by eliminating co-payment or co-insurance any time that they, or covered family members, receive care from an in-network primary care doctor. It enhances IBM’s coverage for preventive or “wellness” visits, such as yearly check-ups, which began in 2006. The new benefit will apply to all IBM-self insured medical plan options, which currently cover about 80 percent of IBM employees in the U.S. Other employees participate in HMOs, which typically provide most, but not all, preventive and primary services at low or no cost after payment of premiums.

Both IBM and its employees have yielded significant savings over the past several years through the company’s support for wellness and preventive care. Between 2004 and 2007, IBM invested $79 million in wellness programs, saving about $191 million in health-related costs. IBM’s support has also produced a dramatic increases in healthy behavior among its employees, such as physical activity and healthy eating.

A recent IBM telephone survey (1) of 1,000 Americans found that one in four people have not received a “wellness” visit within the last year, despite mounting evidence that 40 percent of deaths are due to preventable causes (2). The IBM survey concludes that those who see their doctor for routine wellness visits are more informed, are happier with the care they receive, and are more involved in managing their health. Those who have not had a wellness visit within the last five years are less satisfied with the medical care they receive from their primary doctor.

New Healthy Living Rebate Gives Employees $150 For Adopting Healthy Lifestyle

IBM also announced a new Personal Vitality Rebate, which will encourage employees to think about good health and well-being in broader holistic terms — not simply by checking one’s weight or watching cholesterol, but also paying attention to good sleep habits, effective stress management and proper nutrition. The rebate will become part of IBM’s popular wellness rebate program that rewards employees and their children for exercise, healthy eating and other healthy behaviors. Each rebate is $150 in cash, and employees can chose any two rebates to receive up to $300 in cash per year.

Following the same successful model as IBM’s other rebate programs, the Personal Vitality Rebate will use interactive online tools to help employees take steps over 12 weeks to build energy and vitality. The self-paced program will be securely accessed by employees and does not set targets or requirements. Rather, employees can take action on a personalized plan with activities such as monitoring sleep habits or tracking and managing daily activities that boost or drain energy.

Both the 100% primary care coverage and new wellness rebate will take effect on January 1, 2010, after IBM’s annual benefits enrollment period.

Home Prices Continue to Improve

In Uncategorized on October 27, 2009 at 5:57 pm

Data through August 2009, released today by Standard & Poor’s for its S&P/Case-Shiller(1) Home Price Indices, the leading measure of U.S. home prices, show that the annual rate of decline of the 10-City and 20-City Composites improved compared to last month’s reading. This marks approximately seven months of improved readings in these statistics, beginning in early 2009.

The annual returns of the 10-City and 20-City Composite Home Price Indices, declined 10.6% and 11.3%, respectively, in August compared to the same month last year. Nineteen of the 20 metro areas and both Composites showed an improvement in the annual rates of decline with August’s readings compared to July. Cleveland was the only exception.

“Broadly speaking, the rate of annual decline in home price values continues to improve,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “The two Composites and 19 of the 20 metro areas showed an improvement in the annual rates of return, as seen through a moderation in their annual declines. Looking at the monthly data, 17 of the MSAs and both Composites saw price increases in August over July. While many of the markets remain down versus this time last year, the relative rate of decline has shown some real improvement. California, in particular, has seen some real positive prints in recent months. We see this general trend whether you look at the as-reported data or the seasonally adjusted figures. Once again, however, we do want to remind people of the upcoming expiration of the Federal First-Time Buyer’s Tax Credit in November and anticipated higher unemployment rates through year-end. Both may have a dampening effect on home prices.”

The index levels for the 10-City and 20-City Composite Indices show that as of August 2009, average home prices across the United States are at similar levels to where they were in the autumn of 2003. From the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. With the relative improvement of the past few months, the peak-to-date figures through August 2009 are -30.2% and -29.3%, respectively.

In terms of annual declines, all metro areas and the two composites remain in negative territory, albeit most showing an improvement over the previous month’s figures. Dallas and Denver are continuing their trend from the past month, edging closer into positive territory with August figures of -1.2% and -1.9%, respectively. In addition, both New York and San Diego have emerged out of double-digit declines. New York was down 9.6% in August and San Diego was down 8.9%.

In the monthly data, only Charlotte, Cleveland and Las Vegas reported monthly declines in August over July. Minneapolis and San Francisco reported positive returns greater than +2.0%, and nine of the MSAs plus the two Composites reported monthly returns greater than +1.0%.

 

                       August 2009  August/July  July/June
    Metropolitan Area     Level      Change (%)  Change (%)  1-Year Change (%)
    —————–  ———–  ———–  ———-  —————–
    Atlanta              111.19         1.0%        2.3%           -10.6%
    Boston               155.95         0.9%        1.2%            -4.2%
    Charlotte            120.72        -0.4%        0.6%            -8.6%
    Chicago              130.55         1.7%        2.7%           -12.7%
    Cleveland            107.42        -0.5%        1.5%            -2.8%
    Dallas               121.44         0.2%        1.2%            -1.2%
    Denver               130.07         1.0%        1.5%            -1.9%
    Detroit               71.59         1.9%        1.1%           -22.6%
    Las Vegas            105.78        -0.3%       -1.1%           -29.9%
    Los Angeles          166.52         1.6%        1.8%           -12.0%
    Miami                148.91         1.1%        1.3%           -18.8%
    Minneapolis          122.66         3.2%        4.8%           -13.7%
    New York             174.89         0.5%        0.9%            -9.6%
    Phoenix              108.41         1.6%        1.8%           -25.1%
    Portland             150.46         0.3%        1.1%           -12.5%
    San Diego            153.34         1.6%        2.5%            -8.9%
    San Francisco        132.47         2.8%        3.3%           -12.5%
    Seattle              149.54         0.1%       -0.1%           -14.7%
    Tampa                143.43         0.4%        1.4%           -17.7%
    Washington           178.84         1.4%        1.9%            -7.9%
    Composite-10         157.93         1.3%        1.7%           -10.6%
    Composite-20         146.00         1.2%        1.6%           -11.3%
    Source: Standard & Poor’s and Fiserv
    Data through August 2009

Recession Creates New Holiday Shopping Trends

In Uncategorized on October 20, 2009 at 8:52 pm

Survey data from PriceGrabber.com, a part of Experian, reveals that the state of the economy is shaping new trends in holiday shopping. More than ever, comparison shopping is on the forefront of consumers’ minds, with 70 percent of consumers doing more research and comparison shopping online, compared with 38 percent last year.

Consumers are also crossing acquaintances (57 percent) and coworkers (53 percent) off their gift lists. Other findings from the PriceGrabber.com survey of 2,018 online consumers conducted from Sept. 24, 2009 to Oct. 12, 2009, reveal:

Consumers are cutting back — 53 percent plan to spend less

Many consumers have made a concerted effort to cut back over the last year due to the recession. A recent PriceGrabber.com survey revealed that these efforts will continue into the holiday shopping season and set the stage for new trends in holiday shopping. Fifty-three percent of consumers are planning to spend less than they did last year. Of the consumers who are planning to spend less this year, 48 percent reveal that one of the reasons that they are spending less is due to an increase in prices (necessities, gas, etc.), 45 percent cite lack of confidence in the economy, and 38 percent indicate making less money as a reason for spending less.

Shopping starts earlier to ease the impact of holiday spending — 22 percent start their holiday shopping in October

Cutting back on spending is not the only holiday trend being impacted by the recession. In past years, Black Friday (the day after Thanksgiving) has been the unofficial start of the holiday shopping season. This year, consumers are planning to start their holiday shopping long before Black Friday, with 22 percent of consumers starting their holiday shopping in October and 29 percent starting in November.

Gift lists are trimmed down to manage budgets — 57 percent are not purchasing gifts for acquaintances

Consumers are also making some significant cuts to the number of people on their holiday gift lists. When consumers were asked to compare this year’s gift list to last year’s, 57 percent of consumers revealed that they are not purchasing gifts for the acquaintances that they purchased gifts for last year. Fifty-three percent of consumers are not purchasing gifts for the co-workers that they purchased gifts for last year. When it comes to holiday spending this year, 36 percent of consumers expect to spend between $100 and $499, 28 percent plan to spend $500 to $999, and 30 percent anticipate a holiday spend of $1,000 or more.

Consumers are using more money-saving techniques — 50 percent shop at discount or outlet stores

This year, in order to meet holiday spending budgets, more consumers are utilizing money-saving techniques for their holiday shopping when compared with last year’s PriceGrabber.com survey, Holiday Consumer Spending Survey (2,641 respondents, conducted from Oct. 20, 2008, to Nov. 10, 2008). Fifty percent of consumers are planning to shop at discount or outlet stores this year, while only 43 percent did so last year. Twenty-nine percent of consumers are planning to purchase gifts for fewer people this year, while only 10 percent did so last year.

Construction Market to Increase 11% in 2010

In Uncategorized on October 16, 2009 at 7:08 pm

McGraw-Hill Construction, part of The McGraw-Hill Companies, released its 2010 Construction Outlook, a mainstay of business planning for construction and manufacturing executives, which forecasts an increase in overall U.S. construction starts for next year. Due to improvement for housing from extremely low levels and broader expansion for public works, the level of construction starts in 2010 is expected to climb 11% to $466.2 billion, following the 25% decline predicted for 2009.

“The U.S. construction market in 2010 will be helped by growth for several sectors, following three straight years of decline that brought total construction activity down 39% from its mid-decade peak,” said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction, addressing more than 300 construction executives and professionals at the 71st annual Outlook 2010 Executive Conference in Washington today. “The benefits from the stimulus act will broaden in scope, lifting not just highway construction but also environmental public works and several institutional structure types. With continued improvement expected for single family housing, after reaching bottom earlier this year, the overall level of construction activity should see moderate expansion in 2010.”

Highlights of the 2010 Construction Outlook:

•Single family housing for 2010 will advance 32% in dollars, corresponding to a 30% increase in the number of units to 560,000 (McGraw-Hill Construction basis).
•Multifamily housing will improve 16% in dollars and 14% in units, after steep reductions in 2008 and 2009.
•Commercial buildings will drop 4% in dollars, following a steep 43% drop in 2009. The weak employment picture will further depress occupancies, making it even more difficult to justify new construction.
•Institutional buildings will begin to stabilize after losing momentum in 2009. Square footage will retreat another 2% after sliding 23% this year. The dollar amount of construction for this sector will edge up 1%, helped by a growing amount of energy-efficiency upgrades to federal buildings and continued strength for military buildings.
•Manufacturing buildings will drop 14% in dollars and 3% in square feet, hampered by the substantial amount of slack manufacturing capacity.
•Public works construction is expected to rise 14%, given more wide-ranging strength across all project types.
•Electric utility construction will slip 3%, continuing to settle back after a record high in 2008.
 
The 2010 Construction Outlook was presented at the McGraw-Hill Construction Outlook Executive Conference in Washington, DC, which brought together top management from all parts of the construction industry including firms involved in building product manufacturing, architecture and design, contracting, engineering, industry associations and other industry professionals. At the event, Frank Giunta of Hill International and George Pierson of Parsons Brinckerhoff offered insights to an industry emerging from the crisis:

“The stimulus funds are meant to be just that, a stimulus, not the be-all-end-all answer to infrastructure financing,” said Frank J. Giunta, senior vice president and managing director of Hill International. “Both public and private sectors need to be innovative and rewrite the rules of project finance to address tremendous construction needs with minimal financing options.”

“The efforts of the federal agencies at transparency and their willingness to engage with private industry is refreshing,” said George J. Pierson, chief operating officer, Parsons Brinckerhoff. “We have to work together to meet the challenges of infrastructure and this economy.”

Related Links
McGraw-Hill Construction full report: 2010 Construction Outlook.
IBISWorld industry report: Heavy Infrastructure Construction in the U.S.

Consumers Would Embrace Email Communication With Their Doctor

In Uncategorized on October 15, 2009 at 9:49 pm

051409coverstoryA study released by Lightspeed Research carried out August 19-21, 2009  from 1000 respondents shows that consumers are willing to use email and doctors’ websites to communicate with their doctor in the hope of saving time and money.

Over half of respondents would be willing to use e-mail communication to do a variety of routine interactions with their doctor such as receive routine test results (59%), request a repeat prescription (53%), confirm an appointment (53%) and update their doctors on an existing condition (51%). Using a doctor’s website for these activities was also popular, but the majority were unwilling to use mobile SMS (text messages) or live online chats for the same activities.

In spite of this willingness, most respondents said their family doctor didn’t have the option to communication by email, website, text or online chat.

When it comes to emailing their primary care physician specifically about an illness or condition, the key advantages were that it would save time because they didn’t have to go and see the doctor (59%), there was no waiting for an appointment (56%), and being able to avoid other sick people in the waiting room (51%). Women were more likely than men to see each of these as an advantage, however the older generation (55+) were the least likely to see any advantages in emailing their doctor about an illness or condition.

46% of respondents said they were unwilling to pay for an email consultation, and a further 31% were willing to pay only if it was covered by insurance. As a result, email is unlikely to pose a threat to the standard face-to-face consultation in the near future.

Buying drugs online

When it comes to medications, however, many are already embracing the web to buy their drugs. One in five have already bought drugs online, with the older age group (55+) the most likely to have done so at 30% of respondents. Of those already buying drugs online, half said they were buying drugs for which they have a prescription from their physician. Vitamins, minerals and herbal supplements were also popular medications to buy online.

As with many other kinds of web shopping, convenience and cost were the main reasons people chose to buy drugs online with 61% choosing the convenience of home delivery and 59% stating the price was lower than their local pharmacy. Many were also attracted by the ability to receive up to three months’ supply of their medications. Only 5% of those who had bought drugs online had ever experienced a problem.

In general, consumers are wary of buying drugs or medications online: 68% worry about the drugs being counterfeit; 49% that the online pharmacy is not legitimate and 46% that the drugs they received would not be FDA approved. Insurance also presents a barrier with 38% saying they worry they would not be reimbursed if they use an online pharmacy.

Commenting on the results, Chris Urinyi, CEO of Lightspeed Research, The Americas, said: “There are clearly a number of benefits that consumers believe they would receive if they could access their doctor by email – particularly convenience and cost-saving. Interestingly, while older respondents were not convinced that email would be a good alternative to a consultation in person with a doctor, they were the most likely to have bought drugs online.”

Related links:

Lightspeed Research – company website.

Specialist Doctors in the U.S. – IBISWorld industry report.

Top Green Jobs During the Recession

In Uncategorized on October 13, 2009 at 11:01 pm

Green Dream Jobs and green workforce development consultant Jim Cassio released data that shows the top green job titles posted by employers and in which cities over the past year – during the recession.greenjobs

Although a plethora of studies show the potential for green jobs going forward, many note the dearth of data on current green jobs in the U.S. economy. Green Dream Jobs, online since 1996, collects concrete historical and current data on the job titles employers are actually looking to fill.

“The leading job tiles show the breadth of green positions across the economy,” says Rona Fried, Ph.D., CEO of SustainableBusiness.com, which runs Green Dream Jobs. “Most people think of energy auditing and renewable energy as green jobs, but leading non-profit organizations are major employers, and people needed to run projects and analyze data are in demand, as well as those in sales and business development. Engineers are also in demand for renewable energy operations and even in this economy, we’re still seeing many job openings in green building.”

“The data also point to the variety of skill levels employers seek – from executive skills as Executive Director of green non-profits (NGOs), to mid-level skills associated with analysis, project development and managerial positions, to entry level skills for positions like Administrative Assistant,” notes Jim Cassio.

Interestingly, the most frequently keywords used by job seekers to find job openings on Green Dream Jobs match many of the available positions: sustainability; climate change; wind, solar, construction manager, architectural designer, executive director, naturalist.

The top city for green employment over the past year is Washington DC, reflecting the many executive director positions at green NGOs. Other top 10 cities are those with aggressive green business incentives and policies: the San Francisco Bay area, New York, Seattle, Boston, Chicago, Portland, Oregon and Burlington, Vermont. The top 20 cities include Houston, Madison, Wisconsin, San Jose, Los Angeles and San Diego in California, and Philadelphia.

Although there have been fewer green job openings over the past year, there are a wide variety of employment opportunities in many fields and for people of all skill levels. As the economy recovers, we expect a surge in openings in the various renewable energies, as we saw in previous years. Green Dream Jobs will soon launch the Green Jobs Educational Directory to help people locate the hundreds of green job training programs under development across the US.

 Top 20 Green Job Titles

    Executive Director, Nonprofit
    Project Leader/Manager
    Sustainability Program Director/Manager
    Sales/Business Development Associate or Manager
    Marketing Manager/Coordinator
    Community Crew Leaders/Supervisors, Conservation Associations
    Business/Data Analyst
    Research Analyst/Manager
    Environmental Educator/Naturalist
    Account Executive/Manager, Sales
    Professor (various academic fields)
    Sustainability Analyst/Consultant
    Operations Manager
    Wind Energy Engineer
    Administrative Assistant
    Trainer, Training Specialist or Training Coordinator
    Electrical/Design Engineer
    Green Architect
    Green Building Project Manager
    Solar Process Engineer/Process Integration Engineer

Record-Breaking Halloween: Sales To Reach $6 Billion

In Uncategorized on October 13, 2009 at 10:22 pm

Despite economic gloom casting a spell on consumer confidence this year, America’s darkest holiday is looking bright for retailers.  According to industry research firm IBISWorld, Halloween sales are expected to reach a record-breaking $6 billion in 2009, up 4.2 percent from the $5.77 billion generated last year. That’s contrary to the National Retail Federation’s prediction, which forecasts sales will decline to $4.75 billion.

“Economic recovery appears to be around the corner and consumers are enthusiastically looking to escape their recessionary woes,” said Toon van Beeck, senior analyst with IBISWorld.  “Even last year, when the outlook was much worse, the Halloween spirit remained unhindered as we saw total sales actually jump 5.1 percent from 2007.”

Halloween retail sales are comprised of a wide range of consumer goods, aimed at adults, children, and even pets.  These goods include costumes, scary make-up, wigs, Halloween decorations for inside and outside, and of course, pumpkins and candy, among other things.

In projecting this year’s total sales, analysts at the Los Angeles-based firm aggregated the retail-dollar performance of the following four traditional Halloween categories:

Category 2008 Revenue
(Billions)
2009 Revenue(Billions) % Change
Candy $1.77 $1.89 6.8%
Decorations $ 1.58 $1.65 4.4%
Costumes $2.07 $2.12 2.4%
Greeting Cards $0.35 $0.35              0.0%

It appears an increasing number of people are buying treats this year, making candy the fastest growing holiday category. The average person is estimated to spend about $22.50 on Halloween treats in 2009.

It appears an increasing number of people are buying treats this year, making candy the fastest growing holiday category. The average person is estimated to spend about $22.50 on Halloween treats in 2009.

Also fuelling this year’s record-breaking sales is the demand for holiday decorations.  With Halloween falling on a Saturday this year, more adults are expected to join the fun.  In fact, 32 percent of people celebrating the holiday will either host or attend a party. For this reason, IBISWorld expects decorations to reach its highest level yet at $1.64 billion.

“Halloween-related festivities are a growing trend and this is driving sales of decorations and candy,” adds van Beeck.  “Dollar and variety stores stand to benefit from the 4.4 percent increase in decoration sales, as consumers look to purchase cheap and disposable thrills to make a memorable evening.”

Call it escapism or just good, old-fashioned fun, Americans of all ages show the desire to go all out when it comes to dressing-up.  Costumes are expected to generate the greatest amount of revenue this Halloween, but growth is slight (2.4 percent) as consumers will apply more frugal but creative approaches when shopping.

”Despite more people participating in festivities, money is still tight and consumers will look to cut corners when it comes costume purchases,” said van Beeck.  “Instead of buying a packaged costume, which can cost up to $60 on average, people will get more eclectic and opt for cheaper individual items.”
But given the lack of growth for the card category, not all cheaper items will fare well this year. While cards did well last year, as consumers chose to cut back on pricier categories, 2009 expenditures will revert back to traditional shopping habits.

“Although unemployment is still very high, the overall outlook is far rosier today than it was this time last year,” adds van Beeck.  “For this reason, IBISWorld expects the upward trend in Halloween expenditures to continue its course for 2009, which despite economic conditions will prove to be the best year yet.”

The 2009 Verdict

America’s largest retailer of party goods, today announced its retail sales results for the five-week Halloween season ended November 7, 2009. Amscan’s retail sales include sales under its four retail banners, Party City, Halloween USA, Party America, and Factory Card & Party Outlet.

Retail sales for the five-week period ended November 7, 2009 totaled $257.4 million and were $11.6 million or 4.7% higher than the retail sales for the five-week period ended November 1, 2008, principally due to the growth and performance of the Company’s network of temporary Halloween USA stores.

During the five-week period ended November 7, 2009, the Company operated 247 temporary Halloween USA stores, as compared to 149 in 2008. In addition to its network of temporary stores, the Company operated 387 Party City and Party America “Big Box” retail stores (stores generally greater than 8,000 square feet), 59 smaller outlet stores and 161 FCPO stores during the 2009 Halloween season, as compared to 391 Big Box, 86 outlet and 171 FCPO stores during the 2008 season.

During the five-week Halloween season of 2009, the average sales for temporary Halloween USA stores increased by 7.5%, while the same-store net sales for the Company’s Big Box stores decreased 1.5%. Same store net sales at FCPO stores decreased 1.2%.

Commenting on these results, Gerry Rittenberg, Amscan’s Chief Executive Officer, stated: “In light of the current economy, the dire pre-Halloween predictions of the National Retail Federation and aggressive competition from other temporary Halloween stores, we are extremely pleased with these key holiday results.”

Additional links 
Candy Production: http://www.ibisworld.com/industry/retail.aspx?indid=234&chid=1
Gift Shops & Card Stores: http://www.ibisworld.com/industry/retail.aspx?indid=1099&chid=1
Greeting Cards & Other Publishing: http://www.ibisworld.com/industry/retail.aspx?indid=1235&chid=1
Formal Wear & Costume Rental: http://www.ibisworld.com/industry/retail.aspx?indid=1369&chid=1

Deloitte Consumer Spending Index Up For The Fourth Consecutive Month

In Uncategorized on October 13, 2009 at 5:15 pm

The Deloitte Consumer Spending Index rose again in September, hitting its highest level in two years. The Index attempts to track consumer cash flow as an indicator of future consumer spending.

“The fundamentals of consumer spending continue to improve, giving households increased purchasing power,” said Carl Steidtmann, chief economist with Deloitte Research, a subsidiary of Deloitte Services LP, and author of the monthly Index. “The housing market is beginning to show signs of stabilizing while initial unemployment claims have fallen significantly. Household net worth is rising and real wages are climbing at their fastest pace in 40 years. Signs of recovery got a boost from the cash for clunkers program in August, plus a gain in real spending has materialized across the board in recent months.”

The Index, comprising four components — tax burden, initial unemployment claims, real wages and real home prices — rose to 3.44 percent, from an upwardly revised gain of 3.08 percent a month ago.

“The Index suggests that many households increasingly have the means to spend, and with the worst of the downturn seemingly behind us, the retail environment may soon see signs of life,” said Stacy Janiak, vice chairman and Deloitte’s U.S. Retail leader. “Retailers have tackled cost cutting and cash conservation and the next few months will likely be all about enticing the consumer to spend. Offering personalized marketing, enhancing in-store customer conversion tactics and encouraging online product reviews are just a few of the ways that retailers may be able to gain an edge this holiday season.”

Highlights of the Index include:

Tax Burden: The tax burden continues to fall with the weakening of the economy. The tax burden is at a level only seen on a few occasions over the past 50 years during brief periods following tax rebates. Continued decline is expected.

Initial Unemployment Claims: Initial unemployment claims have come down sharply over the past three months which historically has been a reliable signal of economic recovery. Claims are down more than 100,000 from their recession peak.

Real Wages: Real wage growth continues to post solid gains due in large part to falling prices. Real wages are up 4.8 percent from a year ago as falling prices have given a big boost to consumer purchasing power.

Real Home Prices: The pace of decline in home prices has slowed significantly on a year over year basis. Continued efforts to forestall foreclosures coupled with a tax credit for first-time home buyers have brought some stability to the housing market. The decline in home prices has made home buying much more affordable.

UV Tanning Beds Becoming A Thing Of The Past; Shifting Industry Demand

In Uncategorized on October 1, 2009 at 5:10 pm

In addition to being a discretionary service in a troubled economy, public concerns over ultraviolet (UV) tanning bed usage and the rise of a more health-conscious society are causing headwinds in the $2.7 billion tanning salon industry, which industry research firm IBISWorld expects will decline by 5.1 percent this year. But despite the seemingly gloomy forecast, the ray of hope for tanning salons shines in a relatively new growth segment: spray-tanning booths – the safe alternative to getting bronzed.

“Growing awareness about the high cancer risk associated with UV tanning beds will invariably diminish market share,” said George Van Horn, senior analyst with IBISWorld. “In order to stay in the game, tanning salons are not only incorporating innovative tanning solutions, but are diversifying their menus to offer health and beauty related services.”

IBISWorld projects these newer revenue streams will help deflect current negatives in the industry, where 72 percent of revenue is still being attributed to UV tanning beds:

tanningSalonsRevenue

“The new shift in the industry is arguably good for its image, and profits can still be reaped for salons that quickly adopt,” said Van Horn. “In contrast with the UV tanning segment, spray-on tanning booths are more profitable for operators in that they can offer slightly better margins. And as trends in health and beauty infiltrate their way into products and services, the public perception of tanning salons can start to take on a whole new light”.

With over 24,100 tanning salon businesses operating in the United States, IBISWorld expects the industry will generate $2.72 billion in 2009 – representing a 5.1 percent decline from last year. But despite compromising market conditions, the Los Angeles-based firm forecasts slight industry growth, at an average annual rate of 2.5 percent over the next five years, with spray-on tanners and services providing the bulk of this growth.

Liquidity Markets Show Signs of Life as U.S. Venture-Backed IPOs Raise Most Capital Since 2007; M&As Remain Scarce

In Uncategorized on October 1, 2009 at 5:05 pm

The third quarter proved to be a mixed bag for U.S. venture capitalists as capital raised via initial public offerings (IPOs) hit the highest level since 2007, but mergers and acquisitions (M&As) of venture-backed companies totaled 71, consistent with pre-boom numbers of 1999, according to leading industry tracker Dow Jones VentureSource. Overall, venture-backed liquidity is down 49% from $5.32 billion in the third quarter of 2008 to $2.70 billion in the most recent quarter.

“While we’re not seeing 2007’s double-digit totals, the liquidity market for U.S. venture-backed companies is showing signs of a significant thaw,” Jessica Canning, director of global research for Dow Jones VentureSource said. “The trickle of venture-backed IPOs over the past two quarters appears to be growing into a steady stream, which is a welcome sign of recovery for investors.”

Scott Austin, editor of Dow Jones VentureWire, a prominent industry newsletter, said: “There are certainly hints of optimism. Public investors are taking chances on IPOs again and corporate acquirers are shopping for promising start-ups in select industries. But the reality is that 2009 will remain a slow year for venture exits overall. Based on conversations with industry insiders, I’d expect to continue seeing massive consolidation in certain sectors and a high level of asset sales. Most venture investors are looking to 2010 for a rebound.”

The $451.25 million venture-backed companies generated through two IPOs in the third quarter is largely thanks to A123 Systems garnering $371.25 million in a late September IPO.

M&A Market Still Soft, Despite Low Prices

According to VentureSource, M&As raised $2.25 billion in the third quarter of 2009 through the sale of 71 companies, down 56% from the $5.16 billion raised in the same period last year. The $22 million median amount paid for a venture-backed company in the most recent quarter is a 52% drop from the $46 million median paid during the same period in 2008.

“While it appears that the market is still holding back despite lower valuations, an upswing in M&A activity is on the horizon,” said Ms. Canning. “We will see an influx of more than $1 billion if Amazon.com’s purchase of Zappos and CA’s purchase of NetQoS close as planned in the fourth quarter.”

Less Money, More Time Needed To Achieve Liquidity

In the third quarter, companies raised a median of $16.50 million in venture capital before achieving liquidity through a merger or acquisition. This is 21% less than the $20.85 million median seen during the same period last year. In addition, it took a median of 6.13 years, 23% more time than the 5-year median in the third quarter of 2008 for a venture-backed company to reach liquidity via a merger or acquisition.

The largest M&As of the quarter belonged to the tech industry with VMware purchasing SpringSource, a provider of enterprise Java infrastructure software, for $362 million and Intuit paying $170 million for PayCycle, a provider of online self-service payroll for small businesses.

In addition to the A123 Systems IPO, LogMeIn, a Woburn, Mass.-based provider of on-demand remote connectivity solutions for the enterprise, completed an $80 million public offering in July.