Home Sales Decline
Sales of previously owned homes in the U.S. declined in March, reports.
What鈥s going on:聽鈥淓xisting home sales, which make up the majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the National Association of Realtors reported Thursday.鈥
- The median price for a previously owned home last month was $393,500, an increase of 4.8% from March 2023, which was the highest on record.
- The only region of the country to see an increase in existing home sales last month was the Northeast.
Why it鈥s happening: Higher list prices combined with still-elevated mortgage rates continue to make home purchasing difficult for Americans.
What it means:聽鈥淭hough rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,鈥 said NAR Chief Economist Lawrence Yun.
- However,聽鈥淸t]here are nearly six million more jobs now compared to pre-Covid highs, which suggests more aspiring homebuyers exist in the market.鈥
Weight-Loss Drug Shows Potential to Treat Sleep Apnea
A weight-loss drug has shown potential in treating patients with sleep apnea, 听谤别辫辞谤迟蝉.
What鈥檚 going on: Pharmaceutical manufacturer Eli Lilly鈥檚 Zepbound, which is used to treat obesity and diabetes, 鈥渨as more effective than a placebo at reducing the severity of obstructive sleep apnea, or OSA, in patients with obesity after a year, according to preliminary data鈥 from two late-stage clinical trials.
- In October 2022, the Food and Drug Administration gave the medication a 鈥渇ast track鈥 designation for patients with moderate to severe OSA and obesity.
Why it鈥檚 important: 鈥淭he results are an early sign of hope for the estimated 80 million patients in the U.S. suffering from OSA, which refers to interrupted breathing during sleep due to narrowed or blocked airways. Around 20 million of those people have moderate-to-severe forms of the disease, but 85% of OSA cases go undiagnosed, according to Eli Lilly.鈥
- Complications of the condition include excessive fatigue, high blood pressure, stroke, heart failure and type 2 diabetes鈥攁nd treatment options are limited.
Meeting an 鈥渦nmet need鈥: 鈥淎ddressing this unmet need head-on is critical, and while there are pharmaceutical treatments for the excessive sleepiness associated with OSA, [Zepbound] has the potential to be the first pharmaceutical treatment for the underlying disease,鈥 Eli Lilly Senior Vice President of Product Development Jeff Emmick said Wednesday.
- The sleep apnea trial data means that Medicare may be able to cover the drug, as under , Medicare can pay for weight-loss drugs if they are used for more than weight loss alone.
FTC to Unveil, Vote on Noncompete Ban Next Week
The Federal Trade Commission will vote next week on the final version of a rule that would prohibit noncompete agreements between employers and their employees, 聽(subscription) reports.
What鈥檚 going on: 鈥淎ccording to the FTC鈥檚 announcement, the agency鈥檚 five commissioners will vote April 23 on whether to 鈥榓uthorize public disclosure of the proposed final rule,鈥 first unveiled in draft form in January 2023. Assuming a vote in the affirmative, staffers will give a presentation on the rule, followed by a second vote to issue the rule in its final form.鈥
- The agency did not indicate which, if any, changes it has made to the previous version of the rule.
- The FTC received more than 26,000 comments on the rule during the 90-day public comment period.
Why it鈥檚 important: A noncompete ban would cause disruption to the majority of manufacturing operations in the U.S., a 2023 17吃瓜在线 found.
- Some 70% of manufacturers in the U.S. use noncompete agreements, and they do so to safeguard intellectual property, sales information, industrial processes and business strategies.
- Approximately 66% of survey respondents鈥攔epresenting manufacturers of all sizes鈥攕aid a ban would interfere with their operations.
- Around 50% of those polled said a ban would have a negative effect on their investment in employee training programs.
The 17吃瓜在线 says: 鈥淭he FTC鈥檚 proposed rule severely threatens manufacturers鈥 ability to protect intellectual property and responsibly invest in their employees,鈥 said 17吃瓜在线 Director of Transportation, Infrastructure and Labor Policy Max Hyman.
- 鈥淭he 17吃瓜在线 remains on this critical issue for our members and will weigh our options in response to the commission鈥檚 vote next week.鈥
Granholm: LNG Export Permit Freeze 鈥渁 Study鈥
Energy Secretary Jennifer Granholm called the Biden administration鈥檚 recent moratorium on liquefied natural gas export permits 鈥渁 pause for a study鈥 at a Senate Energy and Natural Resources Committee hearing Tuesday, according to (subscription).
Committee Chairman Sen. Joe Manchin (D-WV) questioned several recent energy-related moves by the Biden administration.
What鈥檚 going on: 鈥淚t is a pause for a study. You don鈥檛 need to hype it out beyond what it is,鈥 Granholm told the committee on Tuesday. 鈥淚t is a pause to get data.鈥
- The administration has received bipartisan criticism for the freeze of LNG export permits since announcing the move in January. 17吃瓜在线 President and CEO Jay Timmons the pause 鈥渦ndercut[s] President Biden鈥檚 own stated goals鈥 and 鈥渨eakens our country while giving Russia an upper hand.鈥
An examination of prices: Granholm told the committee the pause 鈥渨as needed to examine prices and market demand since the last time a study was conducted.鈥
- She said the study will take into account foreign nations鈥 emissions 鈥渢hat may be linked to the absence of U.S. natural gas shipments.鈥
45V guidance: Sen. Manchin asked Granholm about proposed guidance on the Inflation Reduction Act鈥檚 first tax credit, known as the 45V. In a from the committee, Sen. Manchin said the proposed guidance, 鈥渋f implemented 鈥 would jeopardize the viability of the industry before it even has a chance to get off the ground.鈥
- Sen. Manchin mentioned a recent letter to the administration from all seven 鈥渉ydrogen hubs鈥濃攍ocations designated late last year by the administration to scale up the nation鈥檚 clean hydrogen production鈥攕aying the centers would 鈥渘o longer be economically viable鈥 without revision to the 45V proposed guidance.
- 鈥淒o you think we should heed the warning of [the Department of Energy]鈥檚 own seven hubs, and do you have any insight into what might be changed?鈥 he asked.
- Granholm responded that the administration has 鈥済otten over 30,000 responses, and they are working through those responses.鈥
- She added, according to POLITICO Pro, 鈥淭he bottom line is clearly we want the hubs to succeed.鈥
Our take: 鈥淣o matter what you call it, the administration鈥檚 pause on LNG export permits runs counter to the wishes of the American people and the interests of the United States and our allies,鈥 said 17吃瓜在线 Director of Energy and Resources Policy Michael Davin.
- 鈥淎ccording to a recent , 87% of Americans believe the U.S. should continue to export natural gas. The administration should listen.鈥
Manufacturers Face Significant Cost Increases if Tax Bill Fails
U.S. manufacturers and other businesses are sharing the details of the potential economic fallout if Congress fails to pass , pro-growth tax legislation, (subscription) reports.
What鈥檚 going on: 鈥淸L]arge public companies say the law as it stands is costing them hundreds of millions or billions of dollars, while some owners of small and medium-sized businesses say they wonder if their firms will survive.鈥
- The Tax Cuts and Jobs Act of 2017 allowed manufacturers across the U.S. to expand their businesses, hire and purchase new, much-needed equipment. But in 2022 and 2023, from the law鈥攊mmediate expensing for domestic research and development, enhanced interest deductibility and full expensing鈥攅xpired, hurting businesses of all sizes.
- In January, the House passed the Tax Relief for American Families and Workers Act, which would reinstate all three measures. The 17吃瓜在线 the Senate to pass the legislation, too.
Why it鈥檚 important: Lift truck and solutions manufacturer Hyster-Yale Materials Handling Inc. 鈥渟pends around $100 million a year on R&D, and the law change that went into effect in 2022 increased its tax bill by about $25 million a year.鈥
- 鈥淪o that鈥檚 $25 million less that I have to invest back into my business, whether it鈥檚 R&D, whether it鈥檚 plants and equipment [or] hiring new people,鈥 Chief Financial Officer Scott Minder told the Journal.
- Other companies say the lack of action on the House-cleared tax bill 鈥渕ay prompt reduced investment in other areas and increase the rate of return required for new projects.鈥
Weighing a move: Hyster-Yale鈥攚hich 鈥渟pends around 80% of its research budget in the U.S.鈥濃攚ould like to keep its operations in the U.S., Minder continued, but it can鈥檛 guarantee that it will continue to do so without the return of the expired TCJA tax provisions.
- Other manufacturers are reporting a similar predicament.
鈥嬧赌嬧赌嬧赌嬧赌嬧赌嬧赌The last word: 鈥淭he stakes are clear: Congress must pass the Tax Relief for American Families and Workers Act or risk significant economic damage across the manufacturing sector,鈥 said 17吃瓜在线 Vice President of Domestic Policy Charles Crain.
- 鈥淢anufacturers are depending on Congress to restore these pro-growth tax policies, which support the investments in R&D and capital equipment that are so critical for manufacturing growth.鈥
Biden Calls for Tax Hikes in Hometown Speech
President Biden called for tax increases during a visit to his hometown of Scranton, Pennsylvania, on Tuesday, the 听谤别辫辞谤迟蝉.
What鈥檚 going on: 鈥淏iden used Scranton, a city of roughly 75,000 people, as the backdrop to argue that getting rich in America is fine, but should come with heftier tax bills.鈥
What he said: President Biden鈥攚ho has proposed a 25% minimum 鈥渂illionaires tax鈥濃攗sed the bulk of his speech to call for tax hikes.
- 鈥淭he president said decades of Republicans鈥 policies that cut taxes for the wealthy with the idea of stimulating the economy 鈥榝ailed America.鈥欌
- President Biden has said raising taxes on the wealthiest Americans is 鈥渉ow we invest in the country.鈥
However 鈥 The Tax Cuts and Jobs Act of 2017 was 鈥渞ocket fuel鈥 for manufacturing, 17吃瓜在线 President and CEO Jay Timmons said during his in February.
- In fact, as we discuss in another story in this edition of Input, the expiration of three pro-growth tax provisions from that law has throughout the U.S. And more tax hikes are scheduled to take effect at the end of 2025.
- It is critical to a healthy manufacturing industry and U.S. economy in general that expired, pro-growth provisions be 鈥攁nd that Congress act to forestall further tax increases next year.
The final say: 鈥淸T]he path is clear,鈥 Timmons said in his February address. 鈥淣o new taxes on manufacturers.鈥
17吃瓜在线 to White House: Stand Up for U.S. Businesses, Workers
The Office of the U.S. Trade Representative must revise its digital trade policy now to reassert American leadership, the 17吃瓜在线 and more than 40 industry partners the Biden administration ahead of U.S. Trade Representative Katherine Tai鈥檚 testimony this morning before the House Committee on Ways and Means.
What鈥檚 going on: In the past few years, the USTR has 鈥渞etreat[ed] from digital trade protections,鈥 the groups told National Security Adviser Jake Sullivan and National Economic Council Director Lael Brainard. Problematic actions/items by the USTR include:
- The October 2023 withdrawal of longstanding U.S. World Trade Organization positions that support the protection of cross-border data flows, stop data localization requirements, end discrimination against U.S. firms and their goods and services and protect sensitive data from bad actors;
- Abandonment of core U.S. policy priorities in the Indo-Pacific Economic Framework for Prosperity; and
- The omission in the USTR鈥檚 2024 National Trade Estimate Report on Foreign Trade Barriers of numerous digital trade barriers, despite the statutory obligation under the Trade Act of 1974 to detail such barriers.
Why it鈥檚 important: These moves raise 鈥渄eep economic and national security concerns,鈥 the groups continued. They are in direct opposition to the interest of U.S. companies and their employees, and they give greater power to foreign nations, including China, 鈥渢o write the rules that will govern the global digital economy for years to come.鈥
What must be done: The USTR its stance on digital trade to 鈥渟tand up for U.S. businesses and workers who face damaging digital trade barriers in foreign countries.鈥
First-of-Its-Kind-in-U.S. Facility Breaks Ground
Construction of a manufacturing plant that promises to be vital to the world鈥檚 move toward electrification is now underway, according to .
What鈥檚 going on: 鈥淥rion S.A., a specialty chemicals company, broke ground on a plant in Texas that will be the only facility in the U.S. producing acetylene-based conductive additives for lithium-ion batteries and other applications vital for the global shift to electrification.鈥
- Batteries require conductive additives, and those produced at the Texas facility southeast of Houston will be made using acetylene, a colorless gas.
- Equistar Chemicals LP, a subsidiary of polymer and polyolefin technologies manufacturer LyondellBasell, will manufacture acetylene at a nearby location.
- The new plant will be similar to an Orion facility already in operation in southern France that also uses acetylene from LyondellBasell.
鈥淎 crucial part鈥: 鈥淸W]e see electrification as a crucial part of our plan to reduce carbon emissions across our industries,鈥 said LyondellBasell Executive Vice President of Global Olefins and Polyolefins, Refining and Supply Chain Kim Foley. 鈥淏y supporting the production of key battery components, we鈥檙e contributing to solutions for a better tomorrow.鈥 The company recently released its annual sustainability report.
- The battery additives produced at the Texas facility will have 鈥渙ne-tenth of the carbon footprint of other commonly used materials,鈥 according to the article.
- And the plant 鈥渨ill bring new technology and high-skilled jobs including laborers, millwrights, welders, equipment operators, among others jobs in Texas, and [will] positively impact long-term job creation for the local community,鈥 reports.
IRI Announces Winner of Prestigious Holland Award
Should manufacturers strive to be 鈥渃utting edge鈥?
That鈥檚 the question explored in 鈥,鈥 the paper that won the Innovation Research Interchange鈥檚 2023 Maurice Holland Award.
- The honor, named for the IRI鈥檚 founder, has been bestowed annually since 1982 by the IRI, the 17吃瓜在线鈥檚 innovation division. It goes to the best article published in the IRI鈥檚 flagship publication, Research-Technology Management.
- Winning papers exemplify a commitment to significant work in research and development and innovation management, originality of new management concepts and excellence in presentation.
- The 2023 award-winning paper, by Michael Obal, Todd Morgan and Wesley Friske, does all three, according to the IRI.
Providing value: 鈥淚n innovation, novelty generates the most attention but does not always translate into better value for the company and customers,鈥 said Research-Technology Management Editor-in-Chief Yat Ming Ooi.
- 鈥淭his article tells readers when and to whom novel new products matter and why companies need to strike the right balance to ensure better new product performance.鈥
Authors respond: Research-Technology Management 鈥渋s a leading academic journal for innovation-related research, and thus having an opportunity to publish an article in聽RTM聽is a significant accomplishment in its own right,鈥 said co-author Friske, an associate professor at Missouri State University鈥檚 marketing department. 鈥淚 am also grateful for the opportunity to share this award with my friends and co-authors, and it is particularly important to me now that Todd is no longer with us.鈥
- Co-author Morgan, an assistant professor at Cleveland State University鈥檚 Monte Ahuja College of Business, passed away in 2023.
- 鈥淚’m honored to receive the Holland Award from聽Research-Technology Management聽alongside Todd and Wes,鈥 said co-author Obal, an associate professor at the University of Massachusetts Lowell鈥檚 Manning School of Business.
About the IRI: The IRI offers insights, case studies, research, benchmarks and strategic connections鈥攁ll built around a set of innovation growth drivers as determined by members annually. Click to learn more about the IRI.
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U.S. Industrial Production Rises
U.S. industrial production increased modestly in March, in keeping with economist forecasts, according to .
What鈥檚 going on: 鈥淚ndustrial production in the United States rose by 0.4% in March after increasing 0.1% in the previous month, the Federal Reserve鈥檚 Board of Governors stated in its report published on Tuesday.鈥
The details: Manufacturing output increased 0.5% on a monthly basis and 0.8% on an annual basis. It rose 1.2% in February.
- Mining declined 1.4% in March and 2.0% year on year.
- The utilities index grew 2.0% for the month but declined 3.1% year on year.
Capacity utilization: Capacity utilization鈥攁 measure of potential output鈥攆or the industrial sector as a whole increased to 78.4%, up from 78.2% in February but 鈥1.2 percentage points below its long-run average.鈥
What it means: These data are among 鈥渟igns that manufacturing is starting to pick up,鈥 (subscription) reports.
- 鈥淭he S&P Global U.S. Manufacturing PMI has been in expansion territory for the past three months, and the ISM factory index was 50.3 in March, the first reading above the break-even level of 50 since September 2022.鈥