VENTURE CAPITAL FUNDRAISING ACTIVITY HEALTHY AND PRUDENT IN SECOND
QUARTER OF 2007
Expansion Stage Fundraising Breaks Record
" Sixty eight venture capital firms raised $7.2 billion dollars in the second
quarter of 2007 according to Thomson Financial and the National Venture Capital Association (NVCA).
This quarter’s figures represented a decline in the number of funds but an increase in dollars raised. For the
first half of 2007, venture capital firms have raised approximately 62 percent of volume raised in the first
half of 2006."
For Entire NVCA Report
Click Here
Friday, July 27, 2007
Monday, July 23, 2007
More Jobs Expected
Business Economists Expect Stronger Hiring
Companies’ economists are more upbeat about hiring than they’ve been in more than a year, according to the latest quarterly survey by the National Association for Business Economics.
About 41% of respondents said they expect their firms to add employees over the next six months, up from 29% in April and 31% a year ago. About 17% predicted decreases in employment through attrition or layoffs, while the rest expected no change.
The NABE industry survey showed stronger profit margins, hiring and capital spending in the second quarter compared to the first quarter and a better outlook for the economy in the months ahead. But companies also reported cost pressures that could start weighing on their results.
More than 40% of firms reported that wages and salaries rose in the second quarter, the second-highest reading since early 2000, and 40% reported shortages of skilled labor. Other costs also surged: About two-thirds of companies said materials costs are rising, twice as high as January’s levels. Some 60% expect non-labor input prices to rise over the next three months.
Despite higher costs, only 22% of firms said they had raised prices last quarter, marking the lowest percentage in four years. And about that many expect to do so in the third quarter. Yet industry profit margins have continued increasing for four years, and a key reason may be productivity, the NABE said. About 91% of firms reported productivity gains over the last year, due largely to technology improvements or investing in more productive capital.
– Sudeep Reddy WSJ Econ Blog
Companies’ economists are more upbeat about hiring than they’ve been in more than a year, according to the latest quarterly survey by the National Association for Business Economics.
About 41% of respondents said they expect their firms to add employees over the next six months, up from 29% in April and 31% a year ago. About 17% predicted decreases in employment through attrition or layoffs, while the rest expected no change.
The NABE industry survey showed stronger profit margins, hiring and capital spending in the second quarter compared to the first quarter and a better outlook for the economy in the months ahead. But companies also reported cost pressures that could start weighing on their results.
More than 40% of firms reported that wages and salaries rose in the second quarter, the second-highest reading since early 2000, and 40% reported shortages of skilled labor. Other costs also surged: About two-thirds of companies said materials costs are rising, twice as high as January’s levels. Some 60% expect non-labor input prices to rise over the next three months.
Despite higher costs, only 22% of firms said they had raised prices last quarter, marking the lowest percentage in four years. And about that many expect to do so in the third quarter. Yet industry profit margins have continued increasing for four years, and a key reason may be productivity, the NABE said. About 91% of firms reported productivity gains over the last year, due largely to technology improvements or investing in more productive capital.
– Sudeep Reddy WSJ Econ Blog
Sunday, July 15, 2007
Building Boom - continued
As I mentioned last week, it seems most economists are baffled by the strength of employment in light of the temporary residential construction slowdown. What they don't realize is that many of these firms are general and specialy contractors that can shift their focus to commercial construction which has been booming. In this week's Businesweee Outlook James Mehrig backs up this hypothesis with data.
Builders Are Busy With Offices And Factories
Outside of housing, there's a construction boom. The protracted recession in residential building is getting all the attention, but nonresidential building shows scant signs of letting up. That's softening the blow from housing for both the industry and the overall economy.
In the second quarter, U.S. office-vacancy rates fell to 12.6%, down from 13.7% a year ago, according to commercial real estate services company CB Richard Ellis Group (CBG ). The decline came despite a 21.5% yearly increase in the amount of office space constructed during the second quarter.......
......The outlook remains upbeat. "There is still a large pool of buyers" for office space, says Ward Caswell, U.S. director of research at CB Richard Ellis. In May, new nonresidential construction starts increased at an annualized rate of 4.4% from April, while nonbuilding starts, such as constructing new highways and bridges, spiked by 43%, according to McGraw-Hill Construction.
JULY 23, 2007 - Business Outlook, James Mehring - BusinessWeek
For Full Story Businessweek subscribers link here
Builders Are Busy With Offices And Factories
Outside of housing, there's a construction boom. The protracted recession in residential building is getting all the attention, but nonresidential building shows scant signs of letting up. That's softening the blow from housing for both the industry and the overall economy.
In the second quarter, U.S. office-vacancy rates fell to 12.6%, down from 13.7% a year ago, according to commercial real estate services company CB Richard Ellis Group (CBG ). The decline came despite a 21.5% yearly increase in the amount of office space constructed during the second quarter.......
......The outlook remains upbeat. "There is still a large pool of buyers" for office space, says Ward Caswell, U.S. director of research at CB Richard Ellis. In May, new nonresidential construction starts increased at an annualized rate of 4.4% from April, while nonbuilding starts, such as constructing new highways and bridges, spiked by 43%, according to McGraw-Hill Construction.
JULY 23, 2007 - Business Outlook, James Mehring - BusinessWeek
For Full Story Businessweek subscribers link here
Thursday, July 12, 2007
Building Boom - The Real Story of Construction Employment
Economists and nay sayers who claim that the economy is destined for ruin due to construction layoffs from the temporary housing slowdown, forget many of these firms and their workers have multi- dimensional skill sets that transfer quite well to the booming commercial sector.........
Building boom won't quit
Commercial construction up 37% despite housing slump
Residential construction has fizzled but Sacramento is otherwise booming, with about $180 million more in non-residential building under construction so far this year compared to early 2006 -- a 37 percent increase.
The area's top general contractors report they haven't seen a decline in work that typically accompanies a new-housing slump. They're tied up with projects for years to come. ...................
............"We're booked for two years," said David Higgins, president of Harbison-Mahony-Higgins Builders Inc., the area's No. 3 contractor based on revenue of $330 million in 2006. Like other large contractors, the company does a substantial amount of work in the medical field, which hasn't been hindered by the housing market. One reason for that, Higgins said, is state seismic safety requirements. Some of the work on hospitals has already started.
"Our volume is going to be up this year and next year," said Frank DaiZovi, vice president of Turner Construction Co., the area's top builder, with $475 million in revenue last year through the Sacramento office. The company is building medical centers and schools among many other projects. ......
Sacramento Business Journal
Link Here
Building boom won't quit
Commercial construction up 37% despite housing slump
Residential construction has fizzled but Sacramento is otherwise booming, with about $180 million more in non-residential building under construction so far this year compared to early 2006 -- a 37 percent increase.
The area's top general contractors report they haven't seen a decline in work that typically accompanies a new-housing slump. They're tied up with projects for years to come. ...................
............"We're booked for two years," said David Higgins, president of Harbison-Mahony-Higgins Builders Inc., the area's No. 3 contractor based on revenue of $330 million in 2006. Like other large contractors, the company does a substantial amount of work in the medical field, which hasn't been hindered by the housing market. One reason for that, Higgins said, is state seismic safety requirements. Some of the work on hospitals has already started.
"Our volume is going to be up this year and next year," said Frank DaiZovi, vice president of Turner Construction Co., the area's top builder, with $475 million in revenue last year through the Sacramento office. The company is building medical centers and schools among many other projects. ......
Sacramento Business Journal
Link Here
Wednesday, July 11, 2007
7/11 - Lucky Day Brings Good Tidings
Housing Bottoming.............
U.S. home loan demand climbs even as rates surge
NEW YORK (Reuters) - U.S. mortgage applications rose last week, fueled by increased demand for home purchase loans even as interest rates hit their highest level in nearly a year, an industry group's data showed on Wednesday. .....
Full Story Link Here
Rebounding Nicely Next Year...........
Realtors Pare Back Forecast Again,But Project Rebound Next Year
"WASHINGTON -- The National Association of Realtors continued to pare back its forecast for existing U.S. home sales in 2007, while projecting a modest rebound for the struggling housing market in 2008.....
"This should help the overall inventory level to move steadily into a more balanced state," he added. With that in mind, NAR remains sanguine about the housing market in 2008, projecting existing home sales will rise 4.2%, to 6.37 million....
......New home sales are expected to increase at a much more modest pace, with NAR forecasting a 1.4% rise to 878,000 in 2008. "Markets that sharply reduce new construction in 2007 will generally experience respectable price increases in 2008," Mr. Yun said.".....
By BENTON IVES-HALPERIN- WSJ
Full Story Link Here
U.S. home loan demand climbs even as rates surge
NEW YORK (Reuters) - U.S. mortgage applications rose last week, fueled by increased demand for home purchase loans even as interest rates hit their highest level in nearly a year, an industry group's data showed on Wednesday. .....
Full Story Link Here
Rebounding Nicely Next Year...........
Realtors Pare Back Forecast Again,But Project Rebound Next Year
"WASHINGTON -- The National Association of Realtors continued to pare back its forecast for existing U.S. home sales in 2007, while projecting a modest rebound for the struggling housing market in 2008.....
"This should help the overall inventory level to move steadily into a more balanced state," he added. With that in mind, NAR remains sanguine about the housing market in 2008, projecting existing home sales will rise 4.2%, to 6.37 million....
......New home sales are expected to increase at a much more modest pace, with NAR forecasting a 1.4% rise to 878,000 in 2008. "Markets that sharply reduce new construction in 2007 will generally experience respectable price increases in 2008," Mr. Yun said.".....
By BENTON IVES-HALPERIN- WSJ
Full Story Link Here
Friday, July 06, 2007
Goldilocks Keeps on Cruisin' Along
Job Growth Is Better-Than-Expected
Employers Boost Payrolls by 132,000 in June,
Unemployment Rate Holds Steady at 4.5 Percent
"WASHINGTON (AP) -- Employers boosted payrolls by a better-than-expected 132,000 jobs in June, enough to keep the unemployment rate at a relatively low 4.5 percent. It was another sign that the economy is snapping out of a nearly yearlong sluggish spell.
The latest picture of the nation's employment climate, released by the Labor Department on Friday, also showed that workers saw solid gains in their wages last month.
The tally of 132,000 new jobs was stronger than the 125,000 that economists were forecasting. They did, however, predict that job growth would be sufficient to hold the unemployment rate at 4.5 percent, where it has stood for three straight months.........
.........Meanwhile, the economy added more jobs in April and May than the government previously thought. Revised figures released Friday showed that payrolls grew by a strong 190,000 in May, much stronger than the 157,000 reported last month. In April, 122,000 positions were added, which was better than the 80,000 previously reported, which had been the fewest in two and a half years."
By Jeannine Aversa, AP Economics Writer
Full Story Link Here
Employers Boost Payrolls by 132,000 in June,
Unemployment Rate Holds Steady at 4.5 Percent
"WASHINGTON (AP) -- Employers boosted payrolls by a better-than-expected 132,000 jobs in June, enough to keep the unemployment rate at a relatively low 4.5 percent. It was another sign that the economy is snapping out of a nearly yearlong sluggish spell.
The latest picture of the nation's employment climate, released by the Labor Department on Friday, also showed that workers saw solid gains in their wages last month.
The tally of 132,000 new jobs was stronger than the 125,000 that economists were forecasting. They did, however, predict that job growth would be sufficient to hold the unemployment rate at 4.5 percent, where it has stood for three straight months.........
.........Meanwhile, the economy added more jobs in April and May than the government previously thought. Revised figures released Friday showed that payrolls grew by a strong 190,000 in May, much stronger than the 157,000 reported last month. In April, 122,000 positions were added, which was better than the 80,000 previously reported, which had been the fewest in two and a half years."
By Jeannine Aversa, AP Economics Writer
Full Story Link Here
Tuesday, July 03, 2007
Venture Capital IPO's Best in 7 years
Q2 IPOs hit 6-year high, raising $2.73B
"U.S. venture-backed companies raised $2.73 billion in initial public offerings in the second quarter, according to a report by Dow Jones VentureOne on Monday.
This more than doubled the $1.25 billion raised via IPO during the same period last year and was the highest amount raised since the third quarter of 2000.
Additionally, the $3.93 billion raised through venture-backed IPOs thus far in 2007 has surpassed the total amount raised through IPO in all of 2006."
Courtesy-Silicon Valley / San Jose Business Journal
Full Story Click Here
"U.S. venture-backed companies raised $2.73 billion in initial public offerings in the second quarter, according to a report by Dow Jones VentureOne on Monday.
This more than doubled the $1.25 billion raised via IPO during the same period last year and was the highest amount raised since the third quarter of 2000.
Additionally, the $3.93 billion raised through venture-backed IPOs thus far in 2007 has surpassed the total amount raised through IPO in all of 2006."
Courtesy-Silicon Valley / San Jose Business Journal
Full Story Click Here
Monday, July 02, 2007
Paulson: Housing 'at or near bottom'
Paulson: Housing 'at or near bottom'
But Treasury secretary gives no timetable for recovery; says financial markets remain healthy despite subprime mortgage mess.
July 2 2007: 4:40 PM EDT
WASHINGTON (Reuters) -- Treasury Secretary Henry Paulson said Monday the U.S. housing market correction was "at or near the bottom," although it could be some time before an upturn.
"In terms of looking at housing, most of us believe that it's at or near the bottom," he told Reuters. "It's had a significant impact on the economy. No one is forecasting when, with any degree of clarity, that the upturn is going to come other than it's at or near the bottom."
Courtesy CNN Money.com
Link Here
But Treasury secretary gives no timetable for recovery; says financial markets remain healthy despite subprime mortgage mess.
July 2 2007: 4:40 PM EDT
WASHINGTON (Reuters) -- Treasury Secretary Henry Paulson said Monday the U.S. housing market correction was "at or near the bottom," although it could be some time before an upturn.
"In terms of looking at housing, most of us believe that it's at or near the bottom," he told Reuters. "It's had a significant impact on the economy. No one is forecasting when, with any degree of clarity, that the upturn is going to come other than it's at or near the bottom."
Courtesy CNN Money.com
Link Here
Economy Stronger and Rates Lower
Some excellent indicators today of a strong economy with low inflation............The ISM came in better than expected and hit a 14 month high concurrenlty as interest rates headed lower. The 10 year dipped below 5% to 4.99%, once again signifying that there is not an inflation threat out there.
"The June ISM national manufacturing survey came in at 56.0. This was up a bit from 55.0 in May and was about in line with expectations. It represents good news in that it reflects steady and decent growth for manufacturing. A reading above 50 is intended to show growth for the sector."
-courtesy of Briefing.com
"The June ISM national manufacturing survey came in at 56.0. This was up a bit from 55.0 in May and was about in line with expectations. It represents good news in that it reflects steady and decent growth for manufacturing. A reading above 50 is intended to show growth for the sector."
-courtesy of Briefing.com
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