Elgin Area Chamber Of Commerce: US Factory Growth Slows, Office Use Plateaus, Another Chinese Developer Seeks Help

Press release from the Elgin Area Chamber of Commerce:

November 02, 2021

Factory activity slowed some in October but remains in growth. (Getty Images)

By Richard Lawson
CoStar News

US Factory Growth Slows
 

U.S. factory activity growth slowed some in October even though new orders and production are growing, according to a closely followed economic indicator.
The Institute for Supply Management’s manufacturing index decreased to 60.8, a 0.3 percentage point drop. Still, the index now is at 17 consecutive months showing expansion in the manufacturing sector.

Timothy Fiore, chair of the institute’s manufacturing business survey committee, said in a statement that companies and suppliers continue to deal with major challenges in meeting demand.

“All segments of the manufacturing economy are impacted by record-long raw materials lead times, continued shortages of critical materials, rising commodities prices and difficulties in transporting products," Fiore said. “Global pandemic-related issues — worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems — continue to limit manufacturing growth potential.”

Responses from those surveyed expressly stated supply chain struggles for themselves and their suppliers, with one saying that “business is getting stronger, but the supply chain is getting worse every day.”

Wood products and nonmetallic mineral products posted the only declines of the 18 industries the institute tracks.
 
Office Use Plateaus
Office use in Austin, Texas, once again cracked the midway point last week but generally there was little movement by employees in the largest markets around the country to venture more into the office.

Even with coronavirus cases falling, office use was flat in the major metropolitan areas where Falls Church, Virginia-based security firm Kastle Systems manages building access-control systems for the week that ended Oct. 27.

Kastle gathers anonymous employee data from workplaces where it provides access-control technology. While it is only a sampling of buildings by one security company, the data gives a peek into how employees and employers are responding to office use during the pandemic.

Austin was the only area that had a more than percentage-point gain. Most other cities barely moved up or down.

Another Chinese Developer Seeks Help
Chinese developer Yango Group is the next to report that it’s in danger of defaulting on its debt.

In a filing with the Hong Kong Exchange, Yango is asking international investors to swap out $747 million in debt for new debt. The firm said that the “current sharp down-turn in financing environment and leniency of bank lenders across our projects has limited our funding sources to address the upcoming maturities.”

Yango wants to trade bonds coming due in January, February and March for debt that would mature in September 2022. The developer is the latest to seek help with their debt as a housing bubble in China appears to be forming.

Evergrande Group, one of China’s largest developers, prompted concern around the world that it would end up defaulting on $300 billion in debt. The company missed interest payments but has been paying them before the grace periods end to avoid default.

Source: CoStar Group, www.costar.com

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.