Companies Choose the Northshore For New Headquarters

Two major companies have announced plans to locate headquarters on the Northshore. Ampirical Solutions and Medline are slated to build two new headquarters in the area.

Ampirical Solutions LLC based out of Mandeville is an electrical infrastructure firm that specializes

in design and construction of electrical substations and switchyards, protective relays and controls, transmission lines, distributions lines and related infrastructure. Customers include investor-owned utilities, municipalities, industrial plants, electrical cooperatives and independent power producers.

The company wants to take the existing St. Tammany Parish locations and combine them into the new 78,000-square foot corporate headquarters on a 5.5-acre site. The new building, located near Covington, will create 400 direct jobs over the next 10 years. The average salary will be more than $85,000 and will include the existing 120 current Ampirical employees. Indirect jobs are expected to be around 350 construction jobs that will result in a $20 million capital investment. The project is projected to be completed by the end of 2020 and would not be taking place without the help from the Louisiana Economic Development, Greater New Orleans Inc. and St. Tammany Corporation.

Medline Industries is the largest privately held company that is both a manufacturer and distributor of medical supplies and clinical programs. The company, based out of Illinois, wants to build a medical distribution center near Covington. The new center will manage packaging and shipment of all medical supplies ordered by the individual health care providers of the Southeast U.S. region, including items such as exam and surgical gloves, face masks, isolation gowns, reusable textiles, incontinence products, electrosurgical products and housekeeping supplies, according to the Louisiana Economic Development press release.

The 53-million dollar distribution center will be located north of I-12 and LA 21. The new building will replace the existing distribution center between Covington and Goodbee. The 800,000 square foot facility will create over 460 new jobs and retain the existing 36 jobs.

“As a member of the Louisiana community for more than a decade, we are very pleased to continue to grow as an employer and investor in the state,” said Bill Abington, executive vice president of global operations for Medline. “With health care growing so rapidly in the region, the location is ideal for easy access to health care providers while also letting us maintain and grow our current team. We are grateful to the state, Louisiana Economic Development and officials in St. Tammany Parish who have recognized the potential of the project and worked to bring it to fruition.”


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Phase One of I-12 Widening in St. Tammany Parish

St. Tammany Parish residents are familiar with the I-12 traffic especially after the May 26, 2018

crash that closed the highway for hours leaving commuters stranded on the eastbound side. The state Department of Transportation and Development is ready to begin the first phase of the $55 million I-12 widening project.

The first phase of the three phase project will be completed by James Construction Group based out of Baton Rouge, LA. The two and a half year first phase will cover 3.26-miles of I-12 between US 190 and LA 59 which over 76,000 vehicles travel per day. A third lane will be added in both directions along with widening bridges over U.S. 190, Ponchitolawa Creek and the Tammany Trace.

“This (first) project is just one phase in the overall three-phase plan to widen this critical corridor to reduce traffic congestion along I-12 and strengthen this section as a vital economic corridor,” DOTD Secretary Shawn Wilson said.

Funds to complete the first phase will come from federal transportation dollars. Funds belonging to the federal transportation that were not used by other states were given to states that had obligated all of their federal highway funding.

“The widening of I-12 in St. Tammany Parish is a project that has been on the books for years but was not able to move forward due to funding,” Gov. John Bel Edwards said in a statement.

As for phase two, which will include widening LA 21 and US 190, will take place west of the first phase. Bids for the second phase will be looked at in the Spring of 2020. Cost will be covered for phase two with a $25 million federal grant, $5 million from the state and $7.2 million from St. Tammany Parish.

Plans are also being made for the third phase that will widen I-12 from LA 1077 to LA 21.

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A 4.1% Rise From November 2018 In Construction Spending

The Census Bureau reported the November 2019 U.S. spending rate for U.S. construction is 4.1% above 2018’s rate for last November. According to the report construction spending amounted to a seasonally adjusted annual rate of $1.324 trillion.

Out of the total construction spending, spending on private construction was 1.6% above November

2018’s and is at a seasonally adjusted annual rate of $985.5 billion. Residential construction spending came in at a seasonally adjusted annual rate of $536.1 in November making it 2.7% up from a year ago.

“Single-family builders are currently reporting ongoing positive conditions, spurred in part by low mortgage rates and continued job growth,” NAHB Chairman Greg Ugalde said. “In a further sign of solid demand, this is the fourth consecutive month where at least half of all builders surveyed have reported positive buyer traffic conditions.

Homebuilders are confident in the current housing market. The National Association of Home Builders and Wells Fargo suggest the sentiment levels are at 70 points making the rate the second-highest level in 2019. The points are 10 points higher than reported this time in 2018.

The positive housing market is expected to continue in 2020. This forecast is based upon the number of applications for new building permits which were at the highest level in November 2019 than they have been in a decade.

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2020 Is The Year For Millennial Home Buyers

“After a decade of cocooning, millennials want to buy homes that represent value, which is in keeping with the way they shop for everything else,” CNBC’s Jim Cramer said. “The delay in … homebuying is over, the spending is just beginning.”

The year 2020 will bring a new era to dominate the housing market. According to CNBC.com, ” Millennials are expected to be the largest single cohort of homebuyers in 2020.”

“People who have jobs and feel confident in the future are taking advantage of affordable luxury

wherever they can find it,” Cramer said. “I think that gives you great insight into the behavior of millennials, or at least the millennials who have money to spend.”

This generation, born between 1981 and 1997, make up around 33% of the homebuyers which is up from 20% just five years ago.

“In fiscal year 2019 over 20% of our closings had one purchaser 35 years old or under,” CEO of Toll Brothers Doug Yearley said.

Toll Brothers is the nation’s leading builder of luxury homes. The company builds in 23 states and the District of Columbia. The company had a strong fourth quarter in 2019. They reported earning $1.41 per share on revenue of $2.38 billion. Toll Brothers sold 2,672 units in home sales that totaled $2.29 billion in a three-month period.

Toll Brothers is focusing its affordable luxury communities on move-up, active adult and millennial

buyers. The older more affluent millennials have been the biggest factor in this decision.
“This market is strong and demographics suggest it will grow over the next decade as millennials mature,” Yearley said.

Another big homebuilder, Taylor Morrision, agrees that millenials are on an upward trend when it comes to homebuying. The homebuilder, which builds in nine states among the south, southwest and midwest regions, reports that a good majority of their homebuyers are millennials.

“People who have jobs and feel confident in the future are taking advantage of affordable luxury wherever they can find it,” Cramer said. “I think that gives you great insight into the behavior of millennials, or at least the millennials who have money to spend.”

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The Nation’s Housing Market To Boost 2020 Economy

Good news for the new year in the nation’s economy sector. According to CNN Business, the housing market is thriving and will continue to thrive into the new year boosting the economy in 2020.

Although the housing market is just a small factor in the boost, it still is important for the economy as a whole. Purchasing a home is one of the most important and largest purchase decisions one can

make. Consumer spending makes up approximately two-thirds of US economic growth.

“The housing market is probably going to be a modest tailwind to the economy,” David Berson, chief economist at Nationwide, told CNN Business.

Catalyst for the boost in the housing market stems from low mortgage rates, a strong labor market with rages that are rising and low unemployment rates.

Mortgage rates  are at a three-year low and home loans are very affordable. The Federal Reserve says it will keep rates on hold for the time being which stands at about 3.96% to 4.01%.

The central bank cut interest rates three times in 2019. The cut makes the adjustable-rate mortgages cheaper according to Lawrence Yun, chief economist at the National Association of Realtors.

The US Labor Department reports the 21st straight month that the unemployment rates have been at or below 4%.

They also reported that wages are up 3.1% over the last year. On average, annual wages have increased 3% or greater every month since the summer of 2018. Unemployment is down near a 50-year low.

The National Association of Home Builders and Wells Fargo reported a 20-year high this December in the Housing Market index. In fact, the Housing Market Index did not even reach this high pre -2008 mortgage crisis.

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Interest Rates Hold Steady For 2020

To aid in the country’s economic expansion, the Federal Reserve announced they are holding interest rates between 1.5% and 1.75% at the December meeting. There will be no more rate cuts but this is a positive, shifting the fears that there will be a recession.

With the nation’s economic expansion in its 11th year, the Fed will watch closely to the U.S.Federal Open Market Committee’s policy-setting body, thirteen agreed with keeping the rates steady going into the new year. Only four on the committee feels that rates should be increased.

economy. Of the seventeen participants on the

Federal Reserve Chairman Jerome Powell is also in agreement with keeping interest rates level. According to Powell, “the Fed can hold rates steady, because historically unemployment has been able to remain at very low levels for an extended period of time without having an effect on inflation.”

The Commerce Department announced in the meeting that consumer prices are up by 2.1% over 2019 but overall  inflation has remained below the Fed’s 2% target range. Powell comments that the monetary policy is in a “good place”. The Fed’s predict the US economy will grow at 2.2% and slow to 2% the next year.

Although the global economic growth is sluggish and there is uncertainty with global trade, the US economy is a “star performer” says Powell. This is thanks to the nation’s strong consumer spending and steady job growth.

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Home Sales Higher Than This Time Last Year

The National Association of Realtors reported good news for home sales this fall. According to their data, home sales were 4.4% higher annually. This stems from the boost in newly built home sales,

lower 30-year fixed rates and an overall increase annually in pending home sales.

Across the country for-sale inventory has fallen but the demand has increased. October 2019, showed a major spike in sales of newly built homes compared to those reported in October 2018. Builders across the United States are focusing more on construction of more affordable homes.

Lower rates throughout this year has definitely pushed an increase in demand for new construction. The average 30-year fixed mortgage rates reached almost a full percentage

point lower this October than it was a year ago. Reports are showing an increase in mortgage applications and this will continue as the lower interest rate holds.

All the regions reported an annually higher percentage in pending home sales. The Northeast reported a 3% higher increase, the Midwest was 1.8% higher, the South reported a 5.1% increase from this time last year and the West was a 7.5% increase.

“There is no shortage of buyers seeking homes,” said Lawrence Yun, chief economist at the NAR.

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