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UK Homeowners Struggling To Complete Interior Renovations Due To Labor Shortages

An industry-wide labor shortage in the United Kingdom is causing a multitude of homeowners to be left waiting for months longer than usual for bathroom and kitchen renovations/installations. The labor shortage is growing due to a combination of Brexit-related issues as well as the Covid-19 pandemic. 

While the pandemic overall has caused a major increase in the amount people have invested in their homes, the demand for labor hasn’t been able to keep up. Specifically, bathroom, kitchen, and room renovations would, on average, take about four to eight weeks to complete before the pandemic, and now homeowners can expect to be waiting at least 12-18 weeks. 

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Damian Walters is the chief executive of the British Institute of Kitchen, Bedroom, and Bathroom Installations, and recently spoke to the press about the “unprecedented demand for kitchens, bedrooms, bathrooms, and home improvement in general” throughout the pandemic. 

“Lengthening lead times were part of the fallout from the incredible labor shortage. Our organization has been inundated with inquiries from retailers desperate to recruit more fitters. There were a number of problems, including an ageing workforce and a decrease of youngsters wanting to take up apprenticeships. Brexit had also deterred tradesmen from moving to the UK for work,” Walters explained.

“There are not going to be any tradesmen parachuting in from Europe, or anywhere else for that matter. EU migration was a little bit like a Band-Aid that’s been ripped off and the real problems have been exposed,” he said.

B&Q is known as the UK’s largest DIY project chain, and according to their data sales of supplies for interior DIY projects have increased by 13% within the last year of the pandemic, with some of the most popular projects being organizing outdoor spaces, and new kitchen and bathroom designs.

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Global supply chains are still dealing with trading disruptions brought on by the pandemic while demand has continued to increase for these supplies. This is not only bad for the DIY renovator, but for contractors who are still in business but don’t have access to the supplies they need to complete the projects being asked of them. 

The EU has reported shortages in everything from plumbing materials, to screws, handheld and power tools, as well as appliances like washing machines and fridges. 

The British Institute of Kitchen, Bedroom, and Bathroom Installations has announced a campaign that will begin this fall and hopefully recruit 700 apprentices from the UK’s school systems every year to become apprentices in the construction industry. Without new recruits, according to Walters, the “problem will only worsen, as a third of sole traders are due to retire over the next decade.” 

“We simply haven’t focused on vocational learning, and that has caused huge problems in terms of a gap between the demand and the available labour to do this type of work. Put bluntly, we’ve relied for too long on an ageing workforce who are now looking forward to their retirement. We need to pull out all the stops to prepare a new generation of skilled installers ready to take their place,”  said Walters.

Kids using technology

Biden To Call For Universal Preschool As Part Of New Family Plan 

President Joe Biden is set to deliver his first joint address to Congress this week, where he is planning on calling for universal preschool as a part of his American Families Plan. According to his administration Biden is looking to make a major “investment in our kids,” and will be laying out how his proposal will help families with basic expenses. 

White House officials claim that the administration has held briefings with key senators to discuss the details of the proposal itself. The child care proposal comes after Biden began enforcing the American Relief stimulus packages to help aid Americans struggling to make ends meet with the Covid-19 pandemic. 

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According to the White House Biden will be calling for a national partnership among all the states to provide free, high quality, accessible preschool care to all 3 and 4-year-old children. Once fully implemented, the act will help more than 5 million children and save the average family $13,000. 

The $200 billion investment is set to prioritize more underprivileged areas first, as these have been the hardest within the past year. The main goal is to give every family the freedom to decide where they want their child to go to preschool without worrying about the cost. The plan will also work to ensure all publicly-funded preschools are high quality, meaning they have a low student-to-teacher ratio, offer a developmentally appropriate curriculum, and create an overall supportive environment that is inclusive for all students. 

According to reports from CBS news, “the president is seeking to leverage tuition-free community college and teacher scholarships to support those who wish to earn a bachelor’s degree or another credential that supports their work as an educator, or to become an early childhood educator. Educators will also receive job-embedded coaching, professional development, and wages that reflect the importance of their work.”

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All employees working in pre-k programs and Head Start will earn a wage of at least $15 an hour as a part of the American Families Plan. Additionally those with the proper qualifications will receive compensation commensurate with kindergarten educators. 

Currently the average child care worker earns $11.65 an hour, so the inclusion of these financial provisions for workers will hopefully work to bring back some of the thousands of child care workers who were forced to leave the labor force due to the pandemic. 

Studies have shown that kids who participate in pre-K are more likely to take honors classes and are less likely to repeat a grade while kids in lower-income areas do better once they reach middle school. This is due to a multitude of educational inequality issues within America, but a lot of it roots back to the access most children have to preschool programs. 

“Together, these plans reinvest in the future of the American economy and American workers, and will help us out-compete China and other countries around the world.”

This proposal, along with the proposals for the American Jobs Plan and American Families Plan, will include a tax increase for major corporations and the wealthiest 1% of Americans.

The White House

Biden’s Stimulus Plan Relieves Lower-Income Americans Of Heavy Taxes

The relief law also extends the federal boost for unemployment benefits as well as food stamps and other aid programs for struggling renters and homeowners throughout the country. The overall goal of this relief package was to specifically help lower-income households who have been hit the hardest by the pandemic. 

Woman Shopping in Retail

Retail Sales Increased Exponentially In March 

Retail sales for the US in March increased exponentially likely due to the fact that a fresh batch of stimulus checks were recently sent out to citizens. This is great news for the retail sector of the economy, which has been struggling greatly throughout the past year. 

The US Commerce Department reported that advance retail sales rose by 9.8% in March; the Dow Jones estimated a gain of 6.1% and a decline of 2.7% back in February. “Sporting goods, clothing and food and beverage led the gains in spending and contributed to the best month for retail since the May 2020 gain of 18.3%, which came after the first round of stimulus checks,” according to CNBC. 

The Labor Department also reported that “first-time filings for unemployment insurance plunged, with 576,000 new jobless claims for the week ended April 10. That was easily the lowest total since the early days of the Covid-19 pandemic and represented a sharp decline from the previous week’s total of 769,000. The Dow Jones claims estimate was 710,000.”

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As jobless claims began to decrease and stimulus checks continued to be mailed out, the retail industry saw a massive rise in spending. Sales were boosted by 28% when compared to what the industry looked like at this point last year during the beginning of the pandemic. 

The bar and restaurant industry saw a 13.4% increase as well thanks to the rollout of multiple vaccines and the relaxing of Covid-19 restrictions. Currently the US is vaccinating more than 3 million people every day. 

Sporting goods saw the highest rise in spending last month, likely due to the fact that summer is approaching and more Americans realize they’ll be vaccinated an able to participate in more outdoor activities this year. That sector saw a 23.5% increase followed by clothing and accessories which saw a 18.3% increase. 

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“Spending will almost certainly drop back in April as some of the stimulus boost wears off, but with the vaccination rollout proceeding at a rapid pace and households finances in strong shape, we expect overall consumption growth to continue rebounding rapidly in the second quarter too,” wrote Michael Pearce, senior U.S. economist at Capital Economics.

The New York Federal Reserve released a report recently that indicated “stimulus recipients expect to save 41.6% of their checks and spend 24.7%. Following the first round of checks in the spring of 2020, consumers saved 34.5% and spent 29.2%. The consumer price index rose 2.6% in March from a year ago, thanks in part to a surge in gasoline prices. The year-over-year gain was the largest since August 2018.”

The past four weeks have shown a weekly average of 683,000 jobless claims, which is the lowest it’s been in quite some time. With this hopeful decrease in weekly claims, it’s likely that America’s economy overall will begin to see an increase in spending.

Weekly Jobless Claims In The US Much Higher Than Anticipated

The Department of Labor reported that last-week showed first-time claims for unemployment rose at levels much higher than initially anticipated, especially due to the fact that the economy has been showing signs of recovering after the last year.

According to reports from the Labor Department “first-time claims for the week ended April 3 totaled 744,000, well above the expectation for 694,000 from economists surveyed by Dow Jones. The total represented an increase of 16,000 from the previous week’s upwardly revised 728,000. The four-week moving average edged higher to 723,750.”

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The labor market within the last week, however, has shown signs of recovery after the past year of the pandemic. Nonfarm payrolls in march increased by nearly 916,000 while the unemployment rate fell down to 6%.

This increase in jobs marks the biggest increase in employment in the US since August 2020. Before the pandemic the unemployment rate was at 3.5%, however, so there’s still plenty of work to be done, especially after last week’s unexpected reports.

“Continuing claims provided some good news on the labor front, with the total dropping 16,000 to 3.73 million. That’s the lowest level for continuing claims since March 21, 2020, just after the Covid-19 pandemic hit and companies instituted wholesale layoffs in conjunction with the economic shutdown. Continuing claims run a week behind the headline weekly number,” according to NBC.

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California and New York account for a majority of the increase in employment; California saw a rise of 38,963 last week while New York saw a 15,714 increase. However, those increases were cancelled out by a 13,944 decline in Alabama as well as a 10,502 decline in Ohio.

Economists have reported that filing backlogs could be one of the larger factors that drive claims up throughout the nation, while spikes in Covid-19 cases are also keeping the filings elevated due to a lack of individuals able to work.

Federal Reserve officials claim that despite the recent progress America has experienced, “much more progress is needed on the jobs front before we can consider changing economic policy.” The most recent Federal Open Market Committee meeting cited a better outlook for the US economy in the coming year based on a continued need for an easy policy.

Federal Governor Lael Brainard told the media this week that “the economic outlook has brightened considerably but there are still about 9 million fewer workers than there were before the pandemic. Central bank officials have said they want to see not only full employment but also inclusive gains across income, racial and gender lines. In that sense, we’ve got some distance to go before the outcomes are achieved.”

How ‘Instagrammable’ Immersive Experiences Are Shaping Commercial Real Estate

Ari Rastegar is the CEO of Rastegar Property Company, a real estate company focused on value-oriented properties. Rastegar recently wrote about how these types of “instagrammable” locations will likely be a major player in rebuilding the industry as the pandemic comes to an end within the next year or so. 

Biden Working On $3 Trillion Package To Improve Infrastructure In America 

President Joe Biden is working on assembling a new package of investments that would divide $3 trillion among the nation’s infrastructure and domestic needs throughout the next few years. Biden met with Senate Democrats privately this week to begin laying out the groundwork for improving the country’s roads, hospitals, and green energy systems. The investments will be part of Biden’s “Build Back Better” campaign promise. 

According to sources, this package will resemble the recent $1.9 trillion Covid-19 relief bill that the president just passed in that it will include family-friendly policies; for this package though the policies will focus on education and paid family leave. 

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A White House source claimed that the plans are still preliminary, but the overall goal is to use the money to help improve the nation’s economy and overall quality of life for every American. Senator Richard Blumenthal is just one of many Democrats who are prepared to move forward with the package should they be blocked by Republicans. “We need to get it done,” Blumenthal proclaimed. 

This package is also likely a response to the Biden Administration’s handling of the US-Mexico border and immigration in general; a topic that the administration is already under fire for due to a slew of migrant crossings and other failed promises brought on by Biden and his team. 

According to Yahoo News, “an infrastructure package would include roughly $1 trillion for roads, bridges, rail lines, electrical vehicle charging stations and the cellular network, among other items. 

“The goal would be to facilitate the shift to cleaner energy while improving economic competitiveness.”

“A second component would include investments in workers with free community college, universal pre-kindergarten and paid family leave. No part of the proposal has been finalized and the eventual details of any spending could change,” sources said. 

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House Speaker Nancy Pelosi asked Democratic committee chairmen earlier this month to “start working with their Republican counterparts to begin to craft a big, bold and transformational infrastructure package. The goal is to build swiftly on the coronavirus rescue plan to help people in every zip code by creating good-paying jobs for the future.” 

The Federal Reserve estimates that the spending with the Covid-19 relief bill and this infrastructure package could help the economy grow by up to 6.5%. Biden’s campaign also previously promised an increase on corporate taxes and for individuals making about $400,000 annually, which would also help the economy. 

The House Energy and Commerce Committee debated a $300 billion measure to invest in clean drinking water and broadband internet access this week while Transportation Secretary Pete Buttigieg is set to speak to the Transportation and Infrastructure Committee later this week. The Senate Finance Committee is also scheduled to meet and discuss tax spending as a means for paying for this package; all of these committee meetings have to do with the overall relief package the Biden Administration has been working on since last month. 

Biden is expected to release his budget in the coming weeks while Congress continues to discuss and meet regarding the details of this infrastructure package, which lawmakers claim could be ready by this summer.

Shell Chief Executive Receives 40% Pay Cut Due To Covid-19 Pandemic

Royal Dutch Shell has cut the pay of its chief executive by more than 40% in 2020 due to the Covid-19 pandemic which dramatically dropped the demand for oil in the world; 2020 is regarded as the year with the steepest decline in demand for oil. Shell reported a loss of about $20 billion for 2020 due to this lack of demand.

Ben Van Beurden, the CEO, took a cut of around $5.8 million in 2020, and the year before he received a cut of around $10 million, marking the second consecutive year in which the chief executive received a major pay cut. His salary was completely halved back in 2019.

Van Beurden also was reportedly forced to cut Shell’s dividend for the first time since World War 2. It’s expected that the company will be cutting 7,000-9,000 staff members across their global businesses as well. These cuts are also the result of the massive financial loss the company is experiencing due to a lack of need for oil and other fossil fuels, as well as the growing need to live a greener lifestyle.

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Shell also announced that its chairman, Chad Holliday, will be stepping down after six years with the company. He will be replaced by the former BHP chief executive Andrew Mackenzie, who also spent six years at his former company. His time with BHP was defined by his coworkers as an “ambitious turnaround in which we were able to streamline operations.”

“Right now it’s a pivotal time for the industry and wider society. I plan to profitably accelerate Shell’s transition into a net zero emissions energy business that would continue to generate substantial value for shareholders, customers and communities alike,” Mackenzie explained. Van Beurden also recently claimed that he was looking forward to working closely with Mackenzie.

“We are emerging from the Covid-19 pandemic with a clear and distinct strategy that I believe will enable us to seize the opportunities presented by the energy transition. I cannot think of anyone better than Andrew to take this role,” he said.

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Oil prices have dropped dramatically since March of last year when the pandemic began. This was initially due to traders adjusting their prospects to cope with the lower demand. Shell cut its spending which lowered its pricing and future pricing as well.

Van Beurden refused to take an annual bonus last year, however, he still received one of about $3.7 million due to his long-term incentive plan which initially gave him a bonus of $8 million before his major pay cut back in 2019.

Oil prices have begun recovering in the early parts of 2021 due to dramatic cuts in production, as well as a rollout of multiple vaccine programs throughout the world that is helping stimulate the economy and return the world to a greater sense of normalcy.

Real Estate Home & Keys

UK Housing Market Showing Major Increases In Housing Prices

House prices in the United Kingdom rose by 8.5% throughout 2020, this marks the largest annual growth rate for the nation since October 2014, according to new official figures released by the government. 

In December 2020, the average price of a house in the UK hit £252,000, which is equivalent to $355,370 in the United States. Government leaders believe this increase is due to the pandemic, but also due to the stamp duty holiday which is projected to finish at the end of March this year. 

The Office for National Statistics released figures this week that showed north-west England as experiencing the highest growth in pricing. Housing rose by 11.2%% last year for that sector, and prices in London rose by just 3.5%. By the end of 2020 the average price of a home in England was around $327,048 in American currency (£269,000).

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“In Wales prices grew 10.7% to an average of £184,000 ($223,706). Scotland had an 8.4% increase to an average of £163,000 ($198,174), while in Northern Ireland a house would typically set buyers back £148,000 ($179937) – up 5.3% on the figure for December 2019,” according to reports.

The fact that so many individuals have been working from home during the Covid-19 pandemic has obviously stunted how many individuals are willing to put their homes on the market during the worst global health and economic crisis in decades. There’s simply not enough supply to meet the demand, even if that demand is exponentially smaller than normal. 

The Office for National Statistics also claimed that the average price of detached properties rose by 10% in 2020 compared to a 5% growth in pricing for flats and maisonettes. 

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“Recent price increases may reflect a range of factors, including pent-up demand, some possible changes in housing preferences since the pandemic, and a response to the changes made to property transaction taxes across the nations.”

In July 2020 the chancellor announced a stamp duty holiday as a means of getting the property market moving. The holiday released property purchases in England and Northern Ireland up to the value of £500,000 ($607,897) from tax payments, according to reports. 

Sarah Coles is a personal finance analyst in the US who claims there’s already hopeful signs that the market will begin to cool down. “Early calculations from Halifax are that house prices fell back 0.3% in January, while the RICS survey showed sales had plummeted, and estate agents expect things to get worse as we go through the spring. A shortage of properties on the market should keep prices from falling, but there’s not going to be a great deal of enthusiasm for more rises.”

Coles went on to explain that “the chancellor could breathe some new life back into the market in the budget if he makes some kind of concession for people mid-sale when the stamp duty rules change. However, there’s no guarantee he’ll do this, and, even if he does, buyers and sellers may be reluctant to get back into the race.”

Travel Industry Is Bracing For A Slower Recovery Than Expected In 2021

The tourism industry has been one of the most heavily impacted sectors of the US economy, and while 2021 was initially looking hopeful in terms of recovery, experts aren’t as convinced now.