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Consumer confidence hitting record high, but with hangovers left from pandemic

TK Maloy

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Consumer confidence

Global consumer confidence soared to record heights in the first quarter of 2021, according to The Conference Board: Global Consumer Confidence Survey, as vaccination campaigns broadened, travel restrictions loosened, and governments and central banks continued to provide robust economic stimulus.

These factors are contributing to various geographic regions returning to a “state of normalcy sooner” including increased spending across the spectrum, but some economic hangovers persist from the global pandemic crisis.

The Conference Board is a member-driven think tank that has delivered economic insights since 1916. It released this recent global consumer confidence survey on Wednesday. Their methodology for what is comparably a business cycle index is based on a point system where a figure above 100 is considered positive, or below 100 representing decline. This survey also employs opinion polling which is expressed as percentages.

“The lightening of consumer moods globally bodes well for spending throughout the remainder of the year as economies continue to emerge from the 2020 pandemic-induced economic downturn and work toward arresting the spread of the virus,” said Dana Peterson, Chief Economist of The Conference Board.

“Nonetheless, the global economic recovery – and, consequently, consumer sentiment – is likely to continue to vary notably from region to region. Economies with greater access to vaccines are likely to achieve herd immunity, and thus will return to a state of normalcy sooner,” Peterson added.

The survey found that overall global consumer confidence shot up from 98 in the fourth quarter of 2020 to 108 points in the first quarter of 2021. That figure exceeded the reading of 106 registered in pre-pandemic 2020 Q1. Reminder, a figure above 100 is considered positive and the 108-point score is the highest recorded since the survey began in 2005.

Confidence rose in 49 of 65 markets surveyed, as economic activity resumed, COVID-19 cases peaked in many economies, and vaccine development and distribution expanded.

The vaccines contributed to that revival, so individual economies’ level of access to them will greatly affect the timing of their recoveries and boosts in consumer confidence. (For 2020 Q4 indexes, results exclude China due to data collection constraints.)

Confidence still varied across regions: Latin America (up 13 points, from 86 to 99) and Europe (up 11 points, from 76 to 87) enjoyed the biggest gains in consumer confidence. But both regions started from low bases, and Europe remains the least confident region. North America, by contrast, slipped six points, from 116 to 110, while Africa and the Middle East dropped from 101 to 97.

Growing confidence in personal finances, especially, propelled the stronger global sentiment: Consumers were significantly more optimistic about their finances in Q1 2021, with the gap between positive and negative responses standing at +29 percentage points, up substantially from +15 percentage points in Q4 2020.

Of the three key drivers of global confidence, personal finances made the largest impact, although the other two drivers also trended upward: Sentiment about job prospects were up overall around the globe and spending intentions flipped from negative (-7 ppts) in Q4 2020 to positive (+6 ppts) in Q1 2021.

Consumers are gearing up for a return to normalcy: Consumers spent more on entertainment outside of the home, clothing, and vacations. Taken together, these trends indicate that consumers are increasingly looking forward to returning to normal activities at some point this year.

Given that consumption levels significantly contribute to growth in many mature economies, such activity in anticipation of greater freedom later on supports The Conference Board’s upwardly revised projection of 5 percent real GDP growth globally this year.

However, around the world, consumers also ramped up their protective savings: 57 percent of global consumers indicated that they are putting money into savings, an increase of 9 ppts from the previous quarter. Their efforts to economize primarily reflected savings on hospitality and entertainment services.

Consumers planned to eliminate annual vacations, delay upgrading technology, and cut meals away from home. They also switched to cheaper grocery brands and drove their cars less.

The scars of the recession lingered, with health and economic concerns still looming large.

The world is not quite buzzing yet.

A strong majority of consumers (64 percent) said that their market was still in recession during the first quarter of 2021. While that figure dropped sharply from the end of 2020 (down 17 percentage points, from 81 percent) recession concerns remained elevated.

Globally, only 41 percent of consumers expected that their economy would be out of recession in 12 months, virtually unchanged from the previous quarter.

Consumers’ worries about their own health (22 percent) and economic performance (20 percent) dominated their top concerns. This trend will likely hold through mid-2021 given the continued crisis, and the time it will take to arrest the coronavirus and establish herd immunity.

“With uncertainty around jobs and health prompting consumers to continue economizing, it seems clear that GDP returning to pre-pandemic levels will not in itself mark a return to the old normal,” said board chief economist Peterson. “Healing in labor markets may take longer, with greater potential for scarring among industries that are vulnerable to automation and digital transformation.”

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Editor-in-Chief of Inside Telecom. TK Maloy has been in the journalism/media profession for over 30 years, with a writing portfolio that includes coverage of Capitol Hill, Wall Street, Main Street, and the world, doing business, economic, political, and feature reporting, with specializations including corporate and high-tech topics.

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Public transit hopes to win back riders after crushing year

Associated Press

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Public transit hopes to win back riders after crushing year

Taking the Los Angeles Metro for his first trip in months, Brad Hudson felt a moment of normalcy when the train rolled into the station in South Pasadena, California, harkening back to his daily commute into LA before the coronavirus pandemic.

Then Hudson boarded the train, and reality set in.

Not everyone wore masks. Metro staffing levels appeared much lighter. There was more trash on the trains. He worried about security.

As President Joe Biden urges more f ederal spending for public transportation, transit agencies decimated by COVID-19 are trying to figure out how to win back passengers.

It’s made more urgent by the climate change crisis. Biden has pledged to cut U.S. greenhouse gas emissions at least in half by the end of the decade. That aggressive target will require Americans to ditch gas-guzzling cars for electric vehicles or embrace mass transit.

“We have a huge opportunity here to provide fast, safe, reliable, clean transportation in this country, and transit is part of the infrastructure,” Biden said at an event Friday to promote rail and public transportation.

With fewer transportation alternatives, lower-income people are more reliant on public transportation for commuting and their daily lives.

Los Angeles Mayor Eric Garcetti promises free transit fares for them and for students. The city’s Metro ridership has fallen to about half its peak of 1.2 million, and Garcetti said getting more people on board would accelerate economic recovery “for our most vulnerable” and reduce traffic and emissions.

In Washington D.C., where many federal employees now telework due to COVID-19 restrictions, transit officials are mulling lowering fares. New York City has deployed several hundred additional police officers in recent months after a series of subway attacks. The Chicago area is looking at rejiggering train schedules to accommodate more passengers traveling throughout the day, part of a pandemic shift from traditional 9-to-5 work days. Houston is pledging improvements to 17 of its higher-frequency bus routes, including adding brightly lit sheltered stops with digital arrival information.

Biden’s $2.3 trillion infrastructure plan would provide $85 billion over eight years to update and replace subway cars and repair aging tracks and stations; of that amount, $25 billion would go to expanding bus routes and rail lines. Another $25 billion would pay to convert gasoline- and diesel-powered mass transit buses to zero-emission electric vehicles.

Congressional Republicans are balking at the price, as well as Biden’s plan to increase corporate taxes to pay for it. A Senate GOP counteroffer proposes $568 billion for infrastructure, resulting in cuts to public transit funding.

A year ago, transit ridership drained to almost nothing as tens of millions of Americans stayed home and shunned trains and buses. To stay afloat, transit agencies cut payroll and slashed services.

Three rounds of nearly $70 billion total in federal COVID-19 emergency assistance pulled transit agencies from the brink of financial collapse. That federal aid is now expected to cover operating deficits from declining passenger revenue and COVID-19 cleaning and safety protocols through at least 2022.

Still, even as vaccinations become more widespread, it’s uncertain how many riders will come back.

Work-from-home arrangements initially seen as temporary appear to be a more durable trend. Transportation alternatives such as Uber and Lyft ride-share programs — and bike shares and scooters, not to mention driverless cars — threaten to eat away at transit ridership. Some city-dwellers have moved away.

Transportation officials say a key to increasing ridership will be employers reopening offices. Even so, it could take years to get all riders back, if ever, putting lower-income workers at a greater disadvantage if levels of service drop off.

In the Chicago area, transit ridership was down 71% in March compared with the same time in 2020, according to the Regional Transportation Authority.

Those who continue to rely on public transportation are mostly Black, Latino and low-income workers. For that reason, the Chicago Transit Authority, which runs 24 hours, didn’t cut routes or service even as ridership plunged.

“We recognized that we’re carrying primarily essential workers who relied on and needed to use public transit to carry out their functions on a daily basis,” said CTA President Dorval Carter.

Although empty train cars are common in some parts of the city, 34-year-old Ryan Patrick Thomas says Chicago’s Green Line trains connecting the south and west sides to downtown remain busy. Sometimes it’s standing room only.

Thomas, who’s Black, says train cars that used to have mixed crowds are now mostly Black, noting the virus has disproportionately hit people of color.

“These trains seem to be just as full of people in more vulnerable demographics,” he said.

New York’s subway system lost billions in revenue and more than 90% of its riders at the height of the pandemic; also about 150 employees who died of COVID-19. The Metropolitan Transportation Authority has spent hundreds of millions on disinfecting train cars and the system’s nearly 500 stations, even taking the unprecedented move of shutting the system down overnight; it remains closed between 2 a.m. and 4 a.m.

Subway ridership remains down close to 70%, though it continues to rise gradually. There’s a slower recovery on the Metro-North and Long Island Rail Road lines that serve the suburbs, where many white-collar workers have the option of working from home.

More than $14 billion in federal aid has put the agency on sound fiscal footing until mid-2024, MTA Chairman Patrick Foye said.

“If we can’t get people back in the next couple of months, it’s going to be harder to get them back in the future,” said Sarah Feinberg, interim head of New York City Transit, which runs subways and buses.

The Biden plan would invest $621 billion to modernize transportation infrastructure. Projects in the pipeline likely stand to gain the most, including a planned extension of the Bay Area Rapid Transit rail system to San Jose and Santa Clara, California; bus rapid transit lines in St. Paul, Minnesota, Charleston, South Carolina, and Las Vegas; and New York City’s long-awaited Second Avenue subway line.

There’s also Atlanta’s proposed $5 billion upgrade of its transit system, including light rail for its Beltline; and a $7.1 billion transit expansion in Austin, Texas, approved by voters in November, featuring new rail and rapid bus routes connecting downtown to suburbs, an all-electric bus fleet, on-demand shuttles and park-and-ride facilities.


WASHINGTON (AP) — By HOPE YEN, CHRISTOPHER WEBER, SOPHIA TAREEN and DAVID PORTER Associated Press..

Weber reported from Los Angeles, Tareen from Chicago and Porter from New York. AP writers Juan Lozano in Houston and Ashraf Khalil in Washington contributed.

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Girl Scout cookies take flight in Virginia drone deliveries

Associated Press

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Girl Scout cookies

Missing out on Thin Mints in the pandemic? A Google affiliate is using drones to deliver Girl Scout cookies to people’s doorsteps in a Virginia community.

The town of Christiansburg has been a testing ground for commercial delivery drones operated by Wing, a subsidiary of Google’s corporate parent Alphabet.

Now the company is adding the iconic boxed cookies to the more mundane drugstore offerings, FedEx packages and locally-made pastries, tacos and cold brew coffees it’s been hauling to a thinly populated area of residential subdivisions since 2019.

Wing said it began talking to local Girl Scout troops because they’ve been having a harder time selling cookies during the pandemic, when fewer people are out and about. The organization jumped on the new twist to its skills-building mission.

“I’m excited that I get to be a part of history,” said 11-year-old Gracie Walker, of the Girl Scouts of Virginia Skyline Troop 224. “People are going to realize and be, like, ‘Hey, this is better for the environment and I can just walk outside in my pajamas and get cookies.'”

It’s the latest attempt to build public enthusiasm for futuristic drone delivery as Wing competes against Amazon, Walmart, UPS and others to overcome the many technical and regulatory challenges of flying packages over neighborhoods.

Federal officials started rolling out new rules in mid-April that will allow operators to fly small drones over people and at night, potentially giving a boost to commercial use of the machines. Most drones will need to be equipped so they can be identified remotely by law enforcement officials.

The 10-pound Wing drone that made the first deliveries in Christiansburg in fall 2019 is already an artifact held at the Smithsonian National Air and Space Museum. Whether it will go down in history as a revolutionary innovation or a utopian flop remains to be seen.

Amazon has also been working on drone delivery for years. In 2013, Amazon founder Jeff Bezos said in a TV interview that drones would be flying to customer’s homes within five years, but that deadline has long since passed. The company did win government approval to deliver packages by drones last August, but Amazon said it was still testing them and hasn’t started delivering goods to shoppers yet.

David Vos, an aerospace engineer who led Google’s Wing project until 2016, said he has been surprised that drone delivery ventures haven’t taken off more quickly.

“I thought it was completely doable to be up and going by 2021,” Vos said. While he still thinks drone technology is getting closer to delivering the size, weight and power needed to transport goods safely in populated places, Vos said the tech industry also needs a cultural shift.

In particular, he said, it needs to bring on people from the traditional aviation industry who have experience building “safety-critical systems” that meet strict performance standards.

Wing’s drones are able to navigate autonomously — without a human pilot controlling them remotely — and are powered by two forward propellers on their wings and 12 smaller vertical propellers. When a drone reaches its destination, it hovers above the front lawn as a tether releases to drop the package.

“It was so smooth and it didn’t shake,” said Walker, who, before her troop added drones to its sales strategy, would don a mask and set up a cookie booth outside a home improvement store. “They look like a helicopter but also a plane.”

There’s not much evidence that consumers have been clamoring for drone delivery, and many have expressed privacy, safety or nuisance concerns when asked to imagine the noisy machines over their homes. Wing has objected to some of the FAA’s new drone rules on privacy grounds, saying the remote ID requirement could allow observers to snoop on delivery routes online.

But in a small survey of Christiansburg residents by researchers at nearby Virginia Tech that Wing helped fund, most townspeople appeared to be content with the drones.

“One of the reasons is because Virginia Tech is here and there’s an engineering culture of trying new things,” said Lee Vinsel, an assistant professor of science, technology and society who conducted the Virginia Tech survey. “And the suburban setup is easiest for drone delivery.”

That might not be the case for much denser places, he added. “Manhattan would be tough.”

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By MATT O’BRIEN AP Technology Writer

AP Retail Writer Joseph Pisani in New York contributed to this story.

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3D printing’s new challenge: Solving the US housing shortage

Associated Press

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US housing shortage

A new generation of startups wants to disrupt the way houses are built by automating production with industrial 3D printers.

3D printing, also known as additive manufacturing, uses machines to deposit thin layers of plastic, metal, concrete and other materials atop one another, eventually producing three-dimensional objects from the bottom up. In recent years, 3D printers have mostly been used to create small quantities of specialized items such as car parts or prosthetic limbs, allowing consumers or businesses to produce just what they need using the machines at home or work.

Now a small number of startups around the world are applying 3D printing to home construction, arguing that it’s faster, cheaper and more sustainable than traditional construction. They say these technologies could help address severe housing shortages that have led to soaring home prices, overcrowding, evictions and homelessness across the U.S.

But 3D home construction is still in the early stage of development. Most startups in this field are developing new technologies and not building homes yet. And two of the highest profile and best-financed companies – Mighty Buildings and ICON – have delivered fewer than 100 houses between them.

To move beyond a niche market, construction firms will need to significantly ramp up production and persuade home buyers, developers and regulators that 3D printed houses are safe, durable and pleasing to the eye. They’ll also need to train workers to operate the machines and install the homes.

“To the extent that 3D printing can offer a faster, cheaper way to build even single family housing units or small units, it can address a portion of the problem,” said Michelle Boyd, who directs the Housing Lab at the University of California, Berkeley’s Terner Center for Housing Innovation. But the sheer magnitude of the housing shortage demands many types of solutions, from loosening zoning restrictions to building more high-rise apartment buildings, she said.

Proponents note that printing houses rather than nailing them together could save huge quantities of scrap wood, metal and other discarded construction materials that are dumped into landfills every year.

Backers say 3D printing reduces the need for human labor at a time when home builders are struggling to find enough skilled workers to meeting housing demand. Many construction workers left the trades after the housing-fueled financial crisis more than a decade ago, and fewer young people are entering the field.

Jason Ballard, CEO and co-founder of a 3D printing construction startup called ICON, said its 3D printing system can do the work of 10 to 20 workers in five or six different trades. And unlike humans, the machines can work up to 24 hours a day, saving developers time and money.

“With 3D printing, we’re able to print exactly what we need,” said Sam Ruben, the company’s co-founder and chief sustainability officer at Mighty Buildings. The process can eliminate nearly all construction waste, he said, which can add up to savings of two to three tons of carbon per housing unit.

In Mighty Buildings’ factory warehouse in Oakland, Calif., a 3D printer deposits thin layers of a stone-like material that quickly hardens under ultraviolet light and resists fire and water. Wall panels are printed one layer at a time and then filled with an insulating foam. Robotic arms finish the surfaces into various designs.

The printer can produce the entire exterior shell of a studio home or individual wall panels that can easily assembled with simple tools, the company said. Mighty Buildings is now producing 350-square-foot backyard studios, known in the industry as “accessory dwelling units,” that can be used as extra bedrooms, playrooms, gyms or home offices.

So far the company has delivered six units and has another 30 under contract, starting at $115,000 each, which doesn’t include the cost of installation and site work. Two units can be combined to make a 700-square-foot dwelling. The company’s home construction costs are about 40 percent lower than that of traditional homes in California, Ruben said.

Most of the modules are assembled in the factory, transported by truck to the owner’s property, then put into place using a crane. The unit size is limited by the dimensions of the truck bed and the clearance heights of tunnels and overpasses.

Backed by more than $70 million in venture capital, Mighty Buildings is planning to build more factories with a goal of producing 1,000 housing units next year. It’s also creating software that allows developers to custom design printed buildings . Ultimately, the company plans to produce townhouses and multistory apartment buildings, Ruben said.

Mighty Buildings is teaming up with a Beverly Hills, Calif.-based developer, the Palari Group, to create a planned community of 3D printed homes in the desert resort community of Rancho Mirage in California’s Coachella Valley.

The solar-powered development, set for completion next spring, will have 15 lots with a 1,450-square-foot primary home plus a 700-square-foot secondary home and swimming pool in the backyard, costing around $850,000, said Basel Starr, Palari’s CEO and founder.

Those lots sold out quickly and there’s a waiting list of 500 homebuyers, Starr said. He’s planning similar developments in other parts of California.

Austin, Texas-based ICON has used 3D printing technology to produce low-cost housing. It’s printed homes for the chronically homeless in Austin as well as poor families in Nacajuca, Mexico. Instead of producing homes in factories, it brings its Vulcan printer to work on-site, squeezing out long tubes of concrete layer by layer that dry quickly to form the walls of a house.

“The factory comes to you, imprints the house right where it intends to be. We chose that method to eliminate a lot of the shipping costs and then also to give ourselves a lot of design freedom,” said Jason Ballard, ICON’s CEO and co-founder.

Its current technology can reduce construction costs by up to 30 percent and build a house twice as fast as traditional methods because the 3D printer does nearly all the work, Ballard said.

“The benefits that automation and digitization had brought to so many other industries with regard to speed and affordability were completely missing from the construction industry,” Ballard said. 3D printing, he said, “was like the most powerful automation of all the automations we could discover.”


By TERENCE CHEA Associated Press

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