The 2020 Mid-Year Economic Update_long

Day: June 18, 2008

Housing Starts Fall 3.3% From April

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 975,000, 3.3% below April and 32.1% below May 2007, according to the U.S. Census Bureau and the Department of Housing and Urban Development.
Single-family housing starts in May were at a rate of 674,000; this is 1% below April. The May rate for units in buildings with five units or more was 280,000.

Kennametal Agrees to Sell On Time Machining Company

Latrobe, PA-based Kennametal Inc. has agreed to sell On Time Machining Company to Kyocera Industrial Ceramics Corporation, Vancouver, WA.
OTM, based in Wapakoneta, OH, manufactures indexable cutting tools, including drills, aluminum cutting mills and counterbores. The acquisition will increase Kyocera's North American manufacturing capacity.
Kyocera Industrial Ceramics Corp., a subsidiary of Kyocera International Inc. of San Diego, CA, manufactures cutting tools and advanced ceramic components.
Kennametal supplies tooling, engineered components and advanced materials consumed in the production ...

ProBuild Taps New COO

ProBuild Holdings Inc., Denver, CO, has appointed Bill Myrick as chief operating officer.
Myrick joined ProBuild in February 2007. Before his appointment as CEO, Myrick served as president of the company's Strategic Initiatives group and had responsibility for supply chain, manufacturing, gypsum and market development.
ProBuild supplies building materials to professional contractors through more than 550 lumber and building product distribution, manufacturing and assembly centers, serving 42 ...

Now Not the Time to Shy Away from Price Increases

A recent survey by McKinsey Quarterly (found here) says that nearly half of all respondents don't expect their companies to raise prices over the next six months. The manufacturing sector was the one exception. 

On the manufacturing side, nearly 90% have seen an increase in the cost of inputs. And only in the manufacturing sector, McKinsey says, did a majority of respondents say their companies had raised prices and will continue to do so in the next six months.

My takeaway: Now is not the time to shy away from price increases. Suppliers are eager to pass on their rising ...

Retailer Goes Wholesale with Proposed Purchase of Corporate Express

After four months and four bids, retailer Staples Inc., Framingham, MA, finally found the formula for reeling in Corporate Express NV. The offer to purchase the international office supplies distributor received the recommendation for approval from Corporate Express's supervisory and executive boards on June 11.
The move represents a significant shift in business focus for Staples that until now has centered on the retail market. After this acquisition, 60% of its business will be in the delivery and contract markets.
It's a great strategic fit that continues to build the delivery side of our business,"Paul Capelli, Staples vice president for public relations, tells MDM. In North America, delivery has been the fastest growing and most profitable segment for ...

Industrial Distribution Group Stockholders Approve Acquisition

The stockholders of Industrial Distribution Group, Inc., Atlanta, GA, distributor of maintenance, repair, operating and production (MROP) products and integrated supply services, have voted to approve the merger in which the company will be acquired by an affiliate of Luther King Capital Management.
The closing of the deal is expected to occur in mid-July 2008.
We are pleased to have completed this essential step for the merger with LKCM. We will be working closely with LKCM and its personnel to achieve an expeditious closing and smooth transition," said President and CEO Charles Lingenfelter.
"We are delighted that IDG's other shareholders saw the value in this transaction, just as we are excited about our acquisition of IDG," said J. Bryan King, ...