Market Digest

Over the past year the credit crunch has seen the nation tighten its belt and feel the squeeze. The prosperous era of ’splashing out’ has come to an abrupt end and given way to feelings of thrift and frugality that have led us all to keep a beady eye on the balance sheet.

The finer things in life are therefore being cut out as we all endeavour to weather this storm as painlessly as possible. This has had a huge impact on the UK travel industry which is expected to contract by 8.9% this year. As Carroll Rheem, Director of PhoCusWright, has stated: ‘British travellers have had to cope with currency devaluation on top of the recession, and both have driven significant changes in travel patterns.’ This article investigates these emerging trends with relation to travel to Europe in 2009/10 and goes some way to providing an outlook for the future.

Fewer people are expected to travel this year but us Brits love a bargain and, rather than giving up our travels entirely, most of us are on the lookout for good value and special deals. In fact, in mature markets such as the UK and Germany, the percentage growth of Google travel searches for 2008/9 matched growth for 2007/8. Andrew Pozniak, Google Head of Travel Europe, Middle East, and Africa, surmised that: ‘Activity rates have increased solidly, but conversion rates have been tougher. This shows appetite (for travel) has not been dimmed by the recession.’ Conversely, the recession has highlighted the importance that Brits place on travel over other activities. The Travel Nation report carried out by Eurostar in April 2009 concluded that Brits prioritise holidays as the most important of all luxuries, above eating out, buying new clothes and entertainment. According to their survey, over a third of adults (36%) would happily not eat out in restaurants for an entire year and nearly one third (29%) would rather not buy any new clothes for an entire year than miss out on their holiday.

So although we are unwilling to forgo our precious annual holiday(s), we are nonetheless looking to travel in cheaper, more cost effective ways. Through the internet we are able compare and contrast vast quantities of information to find the best deals at websites such as travelsupermarket.com (flights, hotels, car hire, insurance, holiday packages,) and The Currency Exchange Site (http://www.currencyexchange-uk.co.uk/) (foreign exchange). For this reason the online travel market has grown steadily over the past five years and is now worth 60 billion Euros. In contrast, the offline travel market has seen a steady decrease in sales with a CAGR of -0.6% for 2002-2008 (European Online Travel Report 3 by Eye). Package holidays have also been popular during the economic crisis as people are looking for security and prefer to know exactly how much their holiday is going to cost from the outset. Another trend that has emerged is the rise of the ’soliday’ – many people are resorting to travelling alone as friends and family struggle to fund holidays. According to ebookers.com, nearly 15% of holidaymakers took ’solidays’ in the past year due to friends and family being unable to fund travel plans as a result of the recession. The most popular locations for solo travelling include Europe (34%), India (14%) and Africa (11%). Ben Reynolds, Head of Marketing at ebookers.com said: ‘The recession is changing the way we travel, with people looking at new ways to ensure they can still jet off on a break this year. The soliday seems to be emerging as a trend for people who can still afford a break.’

Surprisingly, findings by the Travel Nation report carried out by Eurostar suggest that people will be continuing to travel to the same European destinations in roughly the same numbers as last year, suggesting that the fall in exchange rate of the pound against the Euro has not had the dramatic impact on travel to the Eurozone that has been widely predicted. According to their survey, exchange rate influenced choice of destination for less than one in five of us and is therefore not a significant factor. Two theories that go some way to explaining why we have remained loyal to the Eurozone, despite the exchange rate, are that it is close to home and so travel costs remain low, which is without doubt a huge factor in considering a holiday destination, and that people are ‘more inclined to go somewhere tried and tested,’ i.e. Europe, during these uncertain times.

The vast majority of us would also like to manage risk for our holiday by doing our homework and ‘looking for advice’ on how to get the best value from our destinations. The recession means that our attitude to consumption has become more constrained. This brings with it a more considered approach to travel spend, meaning people will increasingly seek ways to minimise risk and maximise on overall value. In response, European travel retailers are on the verge of rolling out customised concierge services to the mainstream. Concierge services range from destination based experts who contact customers before departure and help them create a tailor-made experience to traditional travel agents offering a before, during and after service. This is a means for travel companies to drive up margins and increase loyalty and customer satisfaction at a time when consumers need help trawling through the plethora of information on the internet and are demanding more experience led travel. As Caroline Bremner, Research Manager to Euromonitor International Global Travel and Tourism, put it: ‘Concierge services traditionally cater to the wealthy and luxury travellers. However, companies are ripping up the rule book and realising that these services are just as helpful and appreciated by the mass market. This area offers the opportunity to reach out and provide value added services like never before.’

With the democratisation of luxury therefore on the cards, travel and tourism in Europe has a bright future despite current global financial uncertainties.

Source: The Currency Exchange Site

Latest Lending & Investing Report Details More Than $758 Billion in Credit Extended During 2009 and Nears $180 Billion in the Fourth Quarter Alone

Bank of America issued its fourth quarter Lending & Investing Initiative Report, noting the extension of more than $758 billion in credit during 2009, including nearly $180 billion during the fourth quarter alone. This quarterly report outlines the company’s progress in driving economic recovery through 10 key areas, including lending to consumers and businesses of all sizes, support for municipalities and nonprofits, community development and other initiatives.

The report, which delivers on a commitment to provide greater transparency into the company’s lending and investing efforts across the enterprise, demonstrates how Bank of America has used the government’s investment in the company to support the U.S. economy in critical areas including small business lending, home loan modification solutions and financing of Community Development Financial Institutions (CDFIs). In December, Bank of America fully repaid the U.S. Treasury $45 billion as part of the Troubled Asset Relief Program (TARP).

“Bank of America can only succeed by doing all we can to contribute to the success of our customers, clients and the communities we serve,” said Brian T. Moynihan, president and chief executive officer, Bank of America. “The state of the national economy will continue to have a tremendous influence on our shared progress. But the recovery is underway. Bank of America contributed to this recovery by extending more than $758 billion in credit across both the consumer and commercial sectors, more than any other U.S. bank. This report provides a sampling of what we’re doing and how.”

As part of Bank of America’s commitment to support and stimulate economic activity, the company extended more than $16 billion in new credit to small businesses last year. Bank of America also assisted more than 60,000 small business clients by modifying payment structures to improve their monthly cash flows to help ride out the recession. In the fourth quarter, Bank of America announced it will increase 2010 lending to small- and medium-sized businesses by $5 billion.

During this critical time in America’s economic recovery, Bank of America also surpassed a significant milestone of lending more than $1 billion to CDFIs, becoming the nation’s largest single lender to this group that extends credit to low-income and disadvantaged communities for small business microlending, housing, charter schools, childcare centers, and new primary health care facilities.

Home lending and neighborhood preservation continued to be an important focus for Bank of America. The company extended nearly $87 billion in first mortgages in the fourth quarter, helping more than 400,000 people purchase a home or refinance an existing mortgage. Of this, nearly $23 billion in mortgages were made to 151,000 low- and moderate-income customers. The bank also became the first mortgage servicer to initiate trial modifications for more than 200,000 customers through the federal government’s Home Affordable Modification Program (HAMP), and made 260,000 loan modifications in 2009.

The full report, which provides detailed summaries of Bank of America’s progress in these growth sectors and other areas, can be accessed at bankofamerica.com/ahead.

Source: Bank of America

The streak of four straight weekly declines in mortgage rates was broken this week. According to Bankrate.com’s weekly national survey, the average conforming 30-year fixed mortgage rate rose to 5.15 percent. The average 30-year fixed mortgage has an average of 0.49 discount and origination points.

The average 15-year fixed mortgage nudged higher to 4.55 percent and the larger jumbo 30-year fixed rate settled at 6 percent. Adjustable rate mortgages were mixed, with the average 3-year ARM falling to 4.60 percent and the 5-year ARM nudging higher to 4.56 percent.

Mortgage rates were up only slightly despite the type of upbeat economic news that can push rates up more noticeably. Reports on economic growth at the close of 2009, personal income and consumer spending for December, and a widely watched manufacturing index for January were all stronger than expected, but were greeted by a collective shrug in financial markets. Lingering uncertainty about the strength and sustainability of the economic recovery is continuing to hold mortgage rates in check. Mortgage rates are closely related to yields on long-term government debt.

The last time mortgage rates were above 6 percent was Nov. 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 5.15 percent, the monthly payment for the same size loan would be $1,092.05, a savings of $150 per month for a homeowner refinancing now.

SURVEY RESULTS
30-year fixed: 5.15% — up from 5.13% last week (avg. points: 0.49)
15-year fixed: 4.55% — up from 4.54% last week (avg. points: 0.45)
5/1 ARM: 4.56% — up from 4.54% last week (avg. points: 0.38)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week’s move in mortgage rates, go to http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate’s weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next week. Nearly half of the panelists, 47 percent, expect mortgage rates to remain more or less unchanged over the next week. A slightly lower percentage – 40 percent – predict an increase while just 13 percent forecast a decline in mortgage rates over the same time period.

Source: Bankrate, Inc.

U.S. consumer confidence cooled this month as worries over every facet of their financial situation mounted, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index. Economic attitudes soured across the board, with consumers viewing the current economy negatively and displaying increased pessimism about the future. As a result, the RBC Index for February 2010 stands at 39.4, down 18.9 points from January’s 58.3 reading.

“Although numerous economic indicators are trending in a favorable direction, it’s evident that ‘less-bad’ is just not good enough for U.S. consumers,” said RBC Capital Markets U.S. economist Tom Porcelli. “This month’s reading suggests that consumers continue to feel financial pressure from recent volatility in stocks and a soft job market.”

The RBC Index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings and confidence to make large investments. The Index is composed of four sub-indices: RBC Current Conditions Index; RBC Expectations Index; RBC Investment Index; and, RBC Jobs Index. The Index is benchmarked to a baseline of 100 assigned at its introduction in January 2002. This month’s findings are based on a representative nationwide sample of 1,000 U.S. adults polled from January 28 – February 1, 2010, by survey-based research company Ipsos Public Affairs. The margin of error was +/-3.1 percent.

Highlights of the survey results include:

• Confidence in current conditions deteriorated sharply during the past month, as seen in the RBC Current Conditions Index, which stands at 30.5, a dramatic decline from January’s 51.6 level. The drop in the index is due to a significant weakening in consumers’ evaluations of the state of their local economies as well as their pocketbooks. Currently, almost half of all Americans (46 percent) rate their local economy as weak, up from 40 percent in January. Consumers’ unease with personal finances is reflected in lower confidence in making major purchases such as a house or car: two-thirds of Americans (65 percent) report they are less comfortable than they were six months ago, compared to 62 percent who were less comfortable in January.

• Americans’ confidence in the future waned considerably as the RBC Expectations Index dropped nearly 20 points this month to 48.0, down from 67.6 in January. Consumers’ near-term concerns about their local economies and personal finances are driving the downturn in the index. Currently, only one-third of Americans (34 percent) expect their local economy to be stronger six months from now, down from 38 percent last month. This month also found that 13 percent of Americans expect their personal finances to be weaker six months from now, compared to 11 percent in January.

• Although it fell less than the other sub-indices, the RBC Jobs Index saw a drop of 13 points in February to 54.9, compared to 67.9 last month. Two-thirds of Americans (67 percent) say they or someone in their close circle have lost their job in the past six months, up from 62 percent in January. In addition, fewer than one-third of consumers (29 percent) are confident they or someone in their circle will not lose their job in the next six months, down from 37 percent in January.

• Consumers’ confidence in the investment climate also soured considerably this month, resulting in a 17.3 point drop in the RBC Investment Index to 40.8, compared to 58.1 in January. The slide stems primarily from decreased confidence in the ability to invest in the future. The number of consumers who say they are less confident investing for the future has risen to 57 percent, up from 54 percent last month.

The RBC Index report can be viewed at: www.rbc.com/newsroom/rbc-cash-index.html.

Research Questions Whether Political Leaders Will Make Bold Business Decisions

Fiscal Policy and Financial Regulation are Areas Where Robust Action is Demanded

Research released by The Financial Times in the run up to the FT ArcelorMittal Boldness in Business Awards reveals that only one in three business leaders think global governments will take bold enough action in business this year. Just 36% of people questioned feel that political leaders will create an environment to encourage stronger business decisions in 2010, despite 65% of respondents wanting robust action in their respective industries. Respondents from Asia were the most optimistic across the globe, with 44% thinking business decisions will be bolder in comparison to 2009.

The survey of 489 Financial Times readers, which was conducted online to research attitudes to business strategy in 2010, also discloses that fiscal policy and financial regulation are the areas where the business community demands the most action, closely followed by combating unemployment.

In the UK specifically, fiscal policy is seen as the most important area where action is needed (22%) – and points to how significant an issue this will be at the impending UK general election. Financial regulation is still a contentious subject across the globe, with almost one in five surveyed believing this is the area that robust action is needed, proving that the issues of banker’s bonuses and maintaining the integrity of the financial sector are still high on the agenda of business leaders. Unsurprisingly, one in four US readers see combating unemployment as the most critical issue needing action this year.

Other key findings from the Boldness in Business Survey show that the failure of Cop 15 has led to ‘going green’ being perceived as less critical than ever:

• Technology (25%) and energy (24%) viewed as sectors most likely to be bold in 2010
• Despite this, only 13% view ‘going green’ as very critical for business success in 2010
• US and China held up as economies to lead world out of recession – Despite high unemployment and Obama’s low approval ratings, 41% of readers think US will be strongest economy in developed countries in 2010
• 48% think China will be the boldest developing economy, more than double the percentages for India and Brazil (19% each)

The second FT ArcelorMittal Boldness in Business Awards will take place on 25 February 2010 and celebrate the boldest and most innovative businesses and decision makers in mature and emerging markets.

Lionel Barber, editor of the Financial Times, said: “Whether businesses will take tougher action in comparison to 2009 remains to be seen, but the second FT ArcelorMittal Boldness in Business Awards will prove that despite the tough times experienced last year, being bold, entrepreneurial and responsible in their decision making has seen some tremendous success stories in the global business world.”

The 2010 awards will seek to recognise those companies and individuals that have grasped the opportunity for innovation and change, and have taken calculated risks to stand out during another tumultuous year for businesses around the world. Judges for this year’s awards are:

- Lionel Barber, Editor, Financial Times
- Lakshmi Mittal, Chairman and CEO, ArcelorMittal
- Dan Bogler, Managing Editor, Financial Times
- J Frank Brown, Dean, INSEAD
- Luke Johnson, Chairman, Risk Capital Partners and Chairman, Channel 4 Television
- Anne Méaux, President and Founder, Image Sept
- Terry Smith, Chief Executive, Tullet Prebon and Chairman, Collins Stewart

The award categories represent the critical decisions faced by businesses and individuals in 2009: Drivers of Change; Corporate Responsibility; Environment; Entrepreneurship; and Emerging Markets. There are two new categories this year – Newcomer and Person of the Year.

Winners of the FT ArcelorMittal Boldness in Business Awards will be announced at a ceremony hosted by Lionel Barber, Editor, Financial Times and Lakshmi Mittal, Chairman and CEO, ArcelorMittal at a central London location. Entrepreneur and media guru Peter Bazalgette will be the guest speaker.

The Financial Times will publish a bespoke magazine and micro-site containing news and results from the event following the awards ceremony.

Source: Financial Times

Apartment industry market conditions are little changed from three months ago, according to the National Multi Housing Council’s latest Quarterly Survey of Apartment Market Conditions. For the first time in the survey’s history, at least sixty percent of responses to each question indicated conditions were unchanged from the previous quarter.

“This quarter saw a continued uptick in sales volume and equity financing, which represent another step, albeit a small one, toward a more normal transactions market, after 2009 recorded the lowest number of transactions of the decade,” said NMHC Chief Economist Mark Obrinsky.

“The weakest performing index is the Market Tightness Index,” said Obrinsky, “underscoring the fact that full recovery of occupancy and rents will require job growth to return to the economy. When that happens, and as a large wave of Echo Boomers begins to enter a supply-constrained market, we should see above average rent growth.”

Key Findings:

• For the second consecutive quarter, the Sales Volume Index reading was above 50. This index was 56 in January, indicating that sales volume around the country is increasing. (For all four indexes, a reading above 50 indicates that, on balance, conditions are improving; a reading below 50 indicates that market conditions are worsening; and a reading of 50 indicates that market conditions are unchanged.)

• The Equity Financing Index of 66 indicates that equity finance conditions continue to improve as well. One-third of respondents said equity financing was more available than three months earlier; this is the highest reading since April 2004.

• The Debt Financing Index was 49 for January 2010, indicating that conditions have changed very little from three months ago. While the apartment sector benefits from the mortgage programs of Fannie Mae and Freddie Mac, the CMBS market remains dormant and bank lending activity remains subdued.

• The Market Tightness Index’s sub-50 reading of 38 indicates that vacancy and/or rent conditions deteriorated over the last quarter. Thirty percent of respondents said markets were looser, meaning higher vacancies and/or lower rents; only seven percent reported that markets were tighter.

Full survey results are posted at www.nmhc.org/goto/QuarterlySurvey.

Job demand increases sharply by 382,000 in January, following a large 362,000 rise in November and December 2009 and reflects the recent strength seen in Q4 GDP numbers January online advertised vacancies rise to over 4 million for the first time since November 2008 Gains have been widespread across most of the States

Online advertised vacancies rose by 382,000 to 4,024,000 in January, according to The Conference Board Help Wanted OnLine(TM) (HWOL) Data Series released today. The January rise follows a large 255,000 increase in December and a 107,000 rise in November. These increases now total almost 750,000 over the three-month period and have been widespread across the nation and are consistent with the recent strength in the GDP numbers for the 4th Quarter.

“The last three months have shown a sharp upturn in employer demand for workers,” said Gad Levanon, Associate Director, Macroeconomic Research at The Conference Board. “These increases have brought us back near the labor demand levels that existed in November 2008 just prior to the huge losses resulting from the financial turmoil in the last quarter of 2008. This is very good news since these seasonally adjusted increases come in two months when we normally see employers cut back on advertising for workers.”

The gap between the number of unemployed and the number of advertised vacancies in December 2009, the latest available month of unemployment numbers, stands at 11.6 million, with 4.2 unemployed for every online advertised vacancy.

Regional and State Highlights

A number of states post their largest monthly gains since the HWOL series began in 2005: California – 67,600; Florida – 25,500; New York – 20,400; Ohio – 16,600; New Jersey – 13,600

In the West, January online advertised vacancies rose by 122,500 in January with the gain of 67,600 in California. Colorado gained 14,300, its largest monthly gain since April 2007. Arizona rose 13,500, its largest gain to date. Washington rose 7,000. Among the states with smaller populations, Nevada rose 4,100, New Mexico rose 2,800, and Hawaii was up 2,000.

In the South, the region with the second largest January gain, online advertised vacancies rose by 112,700, reflecting increases in all of the most populous Southern states but Virginia. Texas gained 27,600, its largest gain since November 2005, and Florida gained 25,500, its largest monthly gain to date. North Carolina posted a record monthly increase, up 10,900, while Georgia gained 10,300, its largest gain since September 2007. Maryland was up 2,500. Virginia dropped 4,000 after experiencing its largest gain ever in December. Among the less populous states in the South, in January Oklahoma increased by 6,900, Louisiana increased by 5,900, and advertised vacancies in Kentucky increased by 5,700.

The Midwest was up 88,800, reflecting gains for all of the largest states in the region. Ohio rose 16,600 and Missouri rose 12,100, both posting their largest monthly gains since the HWOL series began in 2005. Illinois gained 14,700, its largest gain since June 2008. Michigan was up 9,100, its largest gain since December 2006. Minnesota gained 8,900, its largest gain since April 2006. Wisconsin rose 8,300, its largest gain since June 2006.

Job demand in the Northeast was up 66,300. New York and New Jersey posted record monthly increases, up 20,400 and 13,600 respectively. Massachusetts increased by 11,500 to 130,000, and Pennsylvania rose by 5,400 to 157,700. Among the states with smaller populations, in January job demand in Connecticut increased by 8,700, Rhode Island was up by 2,400, Maine rose 2,100, New Hampshire was up by 2,000, and Vermont rose 900.

The Supply/Demand rate for the U.S. in December (the latest month for which unemployment numbers are available) was at 4.19, down slightly from 4.54 in November and indicating that there are now 4.19 unemployed workers for every online advertised vacancy. Among the states, the highest Supply/Demand rate continues to be in Michigan (9.07), where there are over 9 unemployed people for every advertised vacancy. Other states where there are over 6 unemployed for every advertised vacancy are Mississippi (7.92), Kentucky (6.88), and Indiana (6.19). States with some of the lowest rates include Nebraska (1.56), South Dakota (1.65), and Alaska (1.69).

It should be noted that the Supply/Demand rate only provides a measure of relative tightness of the individual state labor markets and does not suggest that the occupations of the unemployed directly align with the occupations of the advertised vacancies.

OCCUPATIONAL HIGHLIGHTS

• Labor demand for Office and Administrative Support occupations picks up
• Demand continues for Sales and Related occupations

Jobs for Healthcare Support occupations remained high throughout the recession

Among the top 10 occupation groups with the largest number of online advertised vacancies, Office and Administrative Support occupations posted the largest January gain, up 74,100. “Job demand in this occupational group lay flat for all of 2009 but picked up in December and January,” said Levanon. The increases in the last two months reflect postings for a wide variety of administrative occupations including executive secretaries/administrative assistants, office clerks, and customer service representatives. “The upward trend in Sales and Related occupations, which was up 26,800 in January, began somewhat earlier and has been rising since October,” Levanon noted.

Advertised vacancies in Management occupations were up 54,500 in January to 427,400. Largely responsible for the increase were sales managers, computer and information systems managers, financial managers, and general and operations managers. The number of unemployed, however, continues to exceed the number of advertised vacancies, and in December there were over two unemployed (2.07) for every online advertised vacancy in the management field.

Computer and Mathematical Science professions rose 40,600 in January to 514,700. Largely responsible for the increase were computer software engineers (applications), computer systems analysts, computer specialists, and web developers.

Labor demand for Healthcare Support occupations rose 6,500 to 119,000. Demand for Healthcare Support workers has remained relatively steady throughout the recession although the number of unemployed seeking work in this field has remained relatively high. In December, the last month for which unemployment data are available, there were 2.3 unemployed for every advertised vacancy in healthcare support.

Healthcare is a broad field, and the relative tightness of the labor market varies substantially from the higher-paying practitioner and technical jobs to the lower-paying support occupations. In December, advertised vacancies for healthcare practitioners or technical occupations outnumbered the unemployed looking for work in this field by over 3 to 1, and the average wage in these occupations is $32.64/hour. In sharp contrast, the average wage for healthcare support occupations is $12.66/hour and there were over 2 unemployed looking for work in the field for every advertised vacancy.

Supply/Demand rates indicated that, among the occupations with the largest number of online advertised vacancies, there is a significant difference in the number of unemployed seeking positions in these occupations. Among the top ten occupations advertised online, there were more vacancies than unemployed people seeking positions for Healthcare Practitioners (0.3) and Computer and Mathematical Science (0.4). On the other hand, in Sales and Related Occupations, there were over three people seeking jobs in this field for every online advertised vacancy (3.4) and there were almost five unemployed looking for work in Office and Administrative Support positions for every advertised opening (4.7).

METRO AREA HIGHLIGHTS

Washington, D.C., Salt Lake City, and Baltimore have the lowest Supply/Demand rates

Online advertised vacancies in 51 of the 52 major metropolitan areas rose since last year (Milwaukee remained below last year’s levels)

In January, 51 of the 52 metropolitan areas for which data are reported separately posted over-the-year increases in the number of online advertised vacancies. Among the three metro areas with the largest numbers of advertised vacancies, the New York metro area was about 42 percent above its January 2009 level, the Washington, D.C. metro area was about 20 percent above its January 2009 level, and the Los Angeles metro area was about 19 percent above last year’s level.

The number of unemployed exceeded the number of advertised vacancies in all of the 52 metro areas for which information is reported separately. Washington, D.C., Salt Lake City, and Baltimore were the locations with the most favorable supply/demand rates, where the number of unemployed looking for work was only slightly larger than the number of advertised vacancies. On the other hand, metro areas in which the respective number of unemployed is substantially above the number of online advertised vacancies include Riverside, CA, where there are nearly 11 unemployed people for every advertised vacancy (10.6), Detroit (9.6), Miami (5.9), Sacramento (5.9), Tampa (5.0), Los Angeles (5.0), and Memphis (5.0). Supply/Demand rate data are for November 2009, the latest month for which unemployment data for local areas are available.

PROGRAM NOTES

The Conference Board Help Wanted Online(TM) Data Series measures the number of new, first-time online jobs and jobs reposted from the previous month on more than 1,200 major Internet job boards and smaller job boards that serve niche markets and smaller geographic areas.

Like The Conference Board’s long-running Help Wanted Advertising Index of print ads (which was published for over 55 years and discontinued in December 2008 but continues to be available for research), the new online series is not a direct measure of job vacancies. The level of ads in both print and online may change for reasons not related to overall job demand.

With the January 1, 2008 release, HWOL began providing seasonally adjusted data for the U.S., the 9 Census regions and 50 States. Seasonally adjusted data for occupations was provided beginning with the July 1, 2009 release. This data series, for which the earliest data is May 2005, continues to publish not seasonally adjusted data for 52 large metropolitan areas, but it is The Conference Board’s intent to provide seasonally adjusted data for large metro areas in the future.

People using this data are urged to review the information on the database and methodology available on The Conference Board website and contact the economists listed at the top of this release with questions and comments. Background information and technical notes on this new series are available at: http://www.conference-board.org/economics/helpwantedOnline.cfm.

The underlying data for this series is provided by WANTED Technologies Corporation. Additional information on the Bureau of Labor Statistics data used in this release can be found on the BLS website, www.bls.gov.

Media Sentiment on Economy Remains Mixed While Consumer Indexes Rise; Ongoing Job Losses, Unemployment Woes Continue to Color Media Coverage

While consumers appeared to be feeling better about the U.S. economy in January, media sentiment was at best mixed as the Dow Jones Economic Sentiment Indicator (ESI) for the month remained flat at 38.8, up only very slightly from December’s 38.7. This represents the second consecutive weak performance for the ESI after relatively strong gains in October and November. The ESI’s weakness runs counter to stronger than expected increases in two leading consumer-based economic indicators.

The University of Michigan Consumer Sentiment Index exceeded analyst expectations in January with an increase to 74.4 in January, its highest level in two years. The Conference Board’s Consumer Confidence Index rose to 55.9, its highest measure since September 2008.

The Dow Jones Economic Sentiment Indicator aims to predict the health of the U.S. economy by analyzing the coverage of 15 major daily newspapers in the U.S. The University of Michigan Consumer Sentiment Index and the Conference Board’s Consumer Confidence Index, use national surveys to measure consumer attitudes about the state of the U.S. economy.

While the ESI begins 2010 significantly higher than the 22.4 level it registered in January 2009, the weak performance of the past two months leaves the indicator below the level it held before the collapse of Lehman Brothers in September 2008.

“The ESI’s second consecutive month of weak performance suggests the U.S. economy’s recovery could be running out of steam after a solid rebound during the second half of last year, mirroring some recent economic activity surveys,” Dow Jones Newswires ‘Money Talks’ columnist Alen Mattich said. “The ESI also suggests that we may see little change in nonfarm payroll employment for January when the Bureau of Labor Statistics releases its figures later this week.”

The ESI represents one of the most comprehensive and far-reaching examinations of media coverage as an economic indicator. The ESI’s back-testing to 1990 shows that the ESI clearly highlighted the risk that the U.S. economy was sliding into recession in 2001 and 2008 and suggests the indicator can help predict economic turning points as much as seven months in advance of other indicators.

Unlike some other indicators where 50 is a clear break-point between recession and recovery, the ESI needs to be read with reference to longer trends. Based on the ESI’s performance since 1990, previous recoveries have been marked by substantial month-to-month gains, with a jump of three points seeming to be a sign of significant improvement. A drop below 50 marks the point at which there is a clear risk of a slowdown.

The Dow Jones Economic Sentiment Indicator is calculated using a proprietary algorithm through Dow Jones Insight, a media tracking and analysis tool. More information about the Economic Sentiment Indicator and its development is available at http://dowjones.com/esi .

Emerging Trends Survey Cites Munich, Hamburg, Paris and London as Promising for Investment

With some credit easing and property values stabilising, Europe’s real estate industry will see some improvement in 2010, but still faces a ‘long, slow haul’ to recovery, according to Emerging Trends in Real Estate(R) Europe 2010, published today by the Urban Land Institute (ULI) and PricewaterhouseCoopers.

The seventh annual report is based on surveys and interviews with well over 600 of the industry’s leading authorities, including investors, developers, financiers, and property managers. Overwhelmingly, respondents cite the need to move forward cautiously, as Europe’s economy remains fragile due to high unemployment and low consumer spending.

Additionally, the report notes the looming problem of massive refinancing of real estate debt totaling hundreds of billions worth of euros. The industry is apprehensive as it is not clear how this will play out, in terms of whether financial institutions will sell real estate assets and loans or “extend and pretend.” This challenge for the real estate sector is compounded by uncertainty over how, and when, European governments might wean their respective economies off the massive injections of state support. An abrupt withdrawal of the stimulus funds could derail the recovery, and even push the economy back into recession, the report notes.

John Forbes, real estate leader in Europe, Middle East and Africa, PricewaterhouseCoopers, remarked: “This year there is a sense of cautious optimism. Sentiment regarding investment prospects has stabilised and although sentiment regarding development continues to decline, it is a less dramatic fall than that witnessed last year. The key issue is the occupier side of the equation. Investors are nervous and they are concentrating on the deeper, more liquid markets.”

“Europe’s economic recovery is underway, but it will be sluggish and uneven,” said ULI Europe Chairman Alexander Otto. “We are looking at a crawl back up the hill, and how much values recover will depend on where Europe ends up economically against global competition.” Otto, chief executive officer of ECE Projektmanagement in Hamburg, Germany, noted that in general, Germany is viewed more favourably for investment and development activity than other countries, due primarily to its broad economy. In terms of individual cities, Munich and Hamburg were ranked by the report as the top two prospects in 2010 for existing portfolios, a ranking they also held in 2009. “The diverse economic base and even balance between supply and demand has kept office markets in both cities healthy, making them an appealing choice for investment,” Otto said.

Paris was ranked third by Emerging Trends in terms of prospects for existing portfolios, edging out London due in part to the general perception that it has a wider economic base and is less dependent than London on the financial services sector. Interviewees pointed to the low level of vacancies in Paris, raising its ratings for investment opportunities and, to a lesser extent, for development.

Investor sentiment regarding London “improved significantly” from 2009, due primarily to a market correction led by an infusion of funds from the Middle East and Asia. The city ranked fourth in 2010 for investment in existing properties and first for new acquisition opportunities. For acquisitions, the main focus is offices, with nearly half the respondents citing that as the preferred asset type. Despite some skepticism over the limited extent of the rebound, some interviewees indicated that they are confident enough about London to make development plans for 2011, if not for this year.

William Kistler, president of ULI EMEAI (Europe, Middle East, Africa and India) noted that in the current environment, there is a tendency among investors to focus on markets they know. “Transparency and liquidity attract investors who would not consider other markets, and this is holding true for both London and Paris,” Kistler said. “These markets have strong interest from non-European investors. 2010 is all about playing it safe and avoiding risk.”

Additional markets rounding out the “top ten” named by Emerging Trends for existing property performance prospects are Vienna, Milan, Istanbul, Berlin, Rome and Frankfurt.

In terms of property types, the quality of the location, building and tenant is the main consideration, according to the report. Centre city offices, high-end street retail and shopping centres are the top commercial investment choices for 2010. Residential investments are also highly rated. Although mainstream property types are preferred, niche sectors continue to have some limited appeal, including student housing, self storage, retirement homes, social housing, healthcare facilities and infrastructure. Green development of any kind is gaining significance, particularly with the European Union introducing compulsory energy efficiency ratings for buildings. “It should become part of the DNA of our businesses,” said one respondent.

Among the top tips from the report’s respondents:

• Keep it simple: Go for “plain vanilla real estate investments that everybody understands.”

• Best buys: Core is king. Stick to core and core-plus investments in large, liquid markets.

• Development: For those with the stomach for risk, buy land and start building up a pipeline of projects. Residential and mixed-use are the best sectors.

• Go for debt: Buy a bank or set up a lending platform. Now is a great time to lend on real estate, if you have the right skill-set and no legacy issues. Values are low and “the gap between cost of funds and loan margins is as good as it gets”. Or, buy distressed debt at a discount.

• Green is good: Real estate is on the front line in the battle against climate change. “There is now a clear realisation that environmental and social responsibility is connected to economics. It has become an action issue.”

Source: Urban Land Institute

A new study has identified seven top investor concerns relative to CEO succession planning. The study, consisting of twenty interviews with various players in the investment community including investment analysts, institutional investors, investment banks, private equity, activist funds and rating agencies was conducted by Integral Advisors, LLC and Board Advisor, LLC from October, 2009 to January, 2010.

The study was prompted by the Securities and Exchange Commission’s change in position relative to shareholder proposals on CEO succession planning last October amidst widespread criticism of Bank of America. “CEO succession planning has become an increasing concern to investors because of its impact on shareholder value,” said Beverly Behan of Board Advisor, LLC, “We wanted to understand what investors viewed the greatest risks in this area.”

The seven factors include items such as “Key Executive Exposure” – the significant risk inherent in succession planning for a founder or iconic leader that necessitates far greater planning on the part of the board. Bench depth was another area of concern, as were issues relative to the board’s engagement in the succession planning process. “The seven factors identified through the study forms the basis of a Succession Risk Index that we can use to gauge whether a company has high or low risks in each of these key areas of investor concern,” noted Bruce Sherman of Integral Advisors, LLC, “This can be an extremely helpful tool for a board to understand their risk exposure on succession planning from the investors’ standpoint.”

Other notable information derived from the research includes:

• Private equity firms, which tend to focus on “quality of management” more than succession planning, derive much of their intelligence about management quality and “bench strength” from dialogue with other executives within the industry who know the company and its top people through their business dealings.
• Institutional investors note that proxy and other disclosure on succession is typically minimal, boilerplate or non-existent. They review the tenure of the senior team – and its turnover – from proxy data but primarily rely on their discussions with board members to form impressions of how effectively the board is addressing succession issues at the company. The LIUNA pension fund – the most aggressive of all institutional investors to date in the area of CEO succession planning – has actually sent letters to the boards of dozens of companies that they invest in seeking details on their CEO succession planning efforts.
• Analysts – including Moody’s, Standard and Poor’s and Risk Metrics – include succession planning factors in their ratings.

Source: Integral Advisors, LLC; Board Advisor , LLC