Category: Construction + Economy

Southern California Shipping Port Backlogs Gone; East & Gulf Ports Backlogged

The backup of container ships off the Ports of Los Angeles and Long Beach, CA was one the biggest sources of U.S. supply chain congestion during the COVID-19 pandemic and a contributor to inflation. Now, though, it’s over, thanks to a drastic decline in import demand nationally.

The backup of container ships off the Ports of Los Angeles and Long Beach, CA was one the biggest sources of U.S. supply chain congestion during the COVID-19 pandemic and a contributor to inflation. Now, though, it’s over, thanks to a drastic decline in import demand nationally.

The number of ships waiting to unload at the ports of Los Angeles and Long Beach fell from a peak of 109 ships in January to just four vessels in late October, according to the Marine Exchange of Southern California (see graph). The biggest impact came from fewer containers reaching U.S. seaports for container imports. Additionally, a growing share of shipments is heading to ports on the East and Gulf Coasts of the US.

The ports of Los Angeles and Long Beach together handled 686,133 loaded import containers in September, down 18% from a year earlier and the lowest level since June 2020, according to port figures. Container imports to the US in September declined by 11% from a year earlier and by 12% in August. The cost of shipping a container from China to the United States has fallen to about $2,700 compared to last year’s high of around $20,000.

Bottlenecks continue to delay cargo at other major U.S. seaports and at inland freight hubs. Ports including Savannah, Houston, New York, and New Jersey have coped with backlogs triggered by diverted cargo from SoCal ports.

With demand slowing, shipping lines have canceled between 26% to 31% of their sailings across the Pacific over the coming weeks, according to Sea-Intelligence, a Denmark-based shipping data group, signaling that carriers are preparing for a continued drop in bookings.

Read more in the Wall Street Journal, here.

Image: Wall Street Journal

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The Traditional Office Is Rapidly Being Replaced By Co-Working Spaces

A previous LightNOW post discussed the shift of offices from downtowns to suburbs, a significant reduction in downtown office occupancy, and the conversion of office buildings to residential use. There is another significant trend in office spaces. 39% of prospective office tenants report they either already use co-working spaces or are considering using co-working space solutions for their employees.

A previous LightNOW post discussed the shift of offices from downtowns to suburbs, a significant reduction in downtown office occupancy, and the conversion of office buildings to residential use. There is another significant trend in office spaces. 39% of prospective office tenants report they either already use co-working spaces or are considering using co-working space solutions for their employees.

Image courtesy Pixabay.com

Yardi Kube, a co-working management software company, released a survey of more than 1,100 prospective office tenants. Cost savings is the main reason for leasing flexible workspaces. 47% of respondents indicated they would require no in-office attendance or at most 2 days per week for their teams.

Office tenants have rapidly shifted towards remote and hybrid work arrangements after the onset of the pandemic, sending vacancy rates to all-time high levels across the U.S. Remote work, or work from home, has dominated the workspace landscape for the past two years, but many organizations are now making a move towards bringing employees back to the office, an adjustment that must take into account changing workforce expectations. Those working remotely have enjoyed no commute times, a flexible work schedule, extended family time and a more comfortable environment, among other work-from-home benefits.

Flexible workspace solutions have been getting a lot of attention as corporate America adapts to employee requests for hybrid work. Organizations across the country are reconsidering their office space needs while trying to provide their employees with a traditional workspace that fosters collaboration and empowers productivity.

The percentage of companies planning to return to the office full-time and those planning to work fully remote is almost the same, 34% and 35%, respectively. This means that the return plans for companies differ, and each company’s needs are important when considering the ideal office solution and work dynamic. Another 12% of companies are leaning towards some of the time (1-2 days) and 19% towards most of the time (3-4 days) in office.

How do you think the growth in co-working space will impact lighting products specified? Will it have other impacts on the office lighting market? Please share your thoughts below in the comment section.

The full article about the Yardi Kube survey can be found here.

 

 

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Lighting Industry Grew High Single Digits In Q3 But Will Slow To Low Single Digit Growth

Channel Marketing Group’s Q3 Pulse of Lighting survey was completed by 200 distributors, manufacturers, reps, and lighting agents.

Channel Marketing Group’s Q3 Pulse of Lighting survey was completed by 200 distributors, manufacturers, reps, and lighting agents.

Image courtesy Channel Marketing Group

Overall, they reported that:

  • Sales performance for Q3 approximated the projections that they shared in Q2, which is high single-digit numbers. This is consistent with the sales growth that occurred in Q2.
  • The difference, however, is that pricing increases grew at a slower rate, resulting in greater organic growth.
  • Distributors reported that the large new construction market appeared to slow, whereas the small and medium new and renovation markets continued to be strong.
  • From an inventory viewpoint, a lower percentage of distributors increased inventory, with over 50% maintaining inventory size.
  • At the same time, fewer distributors reported that their backlog grew. Most reported it remained flat, indicating that supply chain issues remain. Some distributors shared that their “hold till complete” inventory has increased, inevitably requiring only a few SKUs to complete an order.
  • Distributors were asked about their through-stock sales rate. Only 33% shared that they are selling more through stock, whereas 63% stated it has remained the same. At the same time, almost 40% have either reduced their inventory or have it “under consideration.” Some of this is due to product innovation/acceptance of selectable wattage and CCT products.
  • Some manufacturers shared that project sales cycles are taking longer.
  • All audiences reported that supply chain issues persist, and end-users are open to alternatives to avoid supply chain delays.
  • Much of the design community continues to work remotely, which hinders agent/reps sales interactions.

Looking forward:

  • All audiences foresee a lighting slowdown. While there will still be growth, the growth rate slows to low single digits.
  • Most do not see price increases being implemented in Q4.
  • Both manufacturers and agents/reps report that 40-50% of lighting specifiers/design build contractors look at their future project activity over the next 6 months, either slowing or they expressed concern.
  • Growth segments appear to be commercial retrofits, education, healthcare, and lighting for infrastructure projects.

The complete report is available for a fee from Electrical Trends.

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City Downtowns Evolving Away From Office Use….What’s Next?

The pandemic has changed office work in many ways. Companies that are creating new offices are doing so predominantly in suburbs now, rather than downtowns. Many companies and industries have accepted hybrid and remote work arrangements, dramatically reducing the need for office space altogether.

The pandemic has changed office work in many ways. Companies that are creating new offices are doing so predominantly in suburbs now, rather than downtowns. Many companies and industries have accepted hybrid and remote work arrangements, dramatically reducing the need for office space altogether. Many think these changes are here to stay for the foreseeable future. In 10 of the largest US cities, office occupancy averages are less than half, roughly 44% as of mid-August, of what they were in 2020 before the pandemic hit.

Will this bring the death of urban downtowns? Leading urban economist & professor Richard Florida argues in Bloomberg that downtown districts will continue to survive and evolve as they always have. Florida says that city downtowns have survived far worse than the pandemic’s current upheaval of the office real estate market. Downtowns have continuously adapted to great fires, floods and natural disasters, epidemics and plagues, wars, deindustrialization, and terrorist attacks. He points out that downtowns dominated by office buildings are as recent as the 1950s. Prior to that, they were filled with small businesses, factories, and residences.

Prior to COVID, downtowns were already shifting to restaurants, nightlife, cultural venues, schools, apartments & condos, and other services and amenities. The pandemic and its persistent increase in remote work have accelerated this shift. Downtown housing costs have recently rebounded and skyrocketed past pre-pandemic levels. This incentivizes more conversion of older downtown office buildings into residential apartments & condos. Some cities, including Salt Lake City, UT; Columbus, OH; Fresno, CA; and Bakersfield, CA have rebounded beyond pre-pandemic levels. Florida suggests thinking of downtowns as connectivity districts, a city’s most central location for business and social meetings at restaurants, cafes, and other venues. Read the full article here.

What does this all mean for lighting? Total office space is likely to decrease. New office construction will shift from downtowns to suburbs and small city locations that minimize commutes. Downtowns will continue their shifts toward restaurants, nightlife, cultural venues, schools, apartments & condos, and other services and amenities. This would argue for expansion of light commercial and resimercial lighting product lines.

How do you see the urban lighting markets changing? Please share your observations in the comment section below.

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Clean Energy Technologies Expected To Create Copper Shortages

Recent climate action is going to increase clean energy technology deployment that will significantly increase copper demand.

Lighting typically utilizes copper in:

  • Luminaire wires
  • LED module circuit boards
  • LED drivers
  • Smart lighting controllers
  • Most building electrical wiring

Recent climate action is going to increase clean energy technology deployment that will significantly increase copper demand. A recent article by David Gordon of Channel Marketing Group explores how climate action could impact the copper market.

Copper usage has historically been driven by new building construction in the US and, more recently, China. Copper demand is expected to double in the next 10 years. Electrification climate solutions, such as solar, offshore wind, onshore wind, tidal power, biomass, battery storage, geothermal energy, bioenergy, nuclear power, hydropower, EVs, and the need to improve the grid will spike demand beyond supply, and prices will go up.

 

There is likely to be accelerated research into copper alternatives, including aluminum alloys and graphene. The full article is available here.

 

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Big Activity With U.S. Computer Chip Manufacturing

Many LED drivers, luminaire controllers, and lighting control systems rely on computer chips. The COVID-19 pandemic created major disruptions to the global computer chip supply, affecting everything from cars to computers to all types of consumer electronic products.

Many LED drivers, luminaire controllers, and lighting control systems rely on computer chips. The COVID-19 pandemic created major disruptions to the global computer chip supply, affecting everything from cars to computers to all types of consumer electronic products.

THE CHIPS AND SCIENCE ACT OF 2022

Last week, the U.S. House and Senate each passed the CHIPS and Science Act, which provides $52 Billion to boost domestic production of computer chips, but also contains worker training funds and prevailing wage requirements for employers in the semiconductor industry. At the time of writing this article (7/31), the bill was on President Joe Biden’s desk, awaiting his expected signature. The law will direct $40 Billion to increase manufacturing, and $12 Billion for R&D. Today, only 12% of high-end semiconductor manufacturing is done in the U.S. The CHIPS and Science Act is expected to significantly increase that percentage.

INTEL PLANT

In January of this year, Intel announced plans for a new $20 Billion computer chip manufacrturing hub near Columbus, OH. The company expects it to grow to become one of the largest semiconductor manufacturing sites in the world. Back in June, Intel’s CEO warned that the new plant was in jeopardy if the Congress didn’t pass the CHIPS and Science Act. That issue is resolved with the Senate and House passage of the bill, last week.

SAMSUNG PLANT

In November 2021, Samsung announced its plan to build a $17 Billion computer chip factory, outside Austin, TX. To reinforce the deal, President Biden visited a Samsung plant in South Korea, during his recent visit, in May, 2022.

The three actions above represent $89 Billion of new investment in the US semiconductor production industry. This will boost the US economy and reduce computer chip costs, impacting countless industries, including automotive, computers, consumer electronics, IoT, and lighting.

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Product Monday: Award-Winning PC Amber & Narrow Band Amber Street Lights

I’ve written before about the mounting scientific evidence of a dramatic global collapse in insect and bird populations due to white LED streetlights. I predict, over time, a return to…

I’ve written before about the mounting scientific evidence of a dramatic global collapse in insect and bird populations due to white LED streetlights. I predict, over time, a return to amber streetlighting, but this time instead of HPS & LPS, it will be amber LED sources. This trend has already begun with several different manufacturers now offering amber streetlights. Another of my recent posts covered the recent DLC white paper about Non-White Light Sources For Nighttime Environments.

One of the pioneer manufacturers is Crossroads LED, whose innovative Astrophile Series street lights won the company the IDA’s 2021 Best Design And Technical Innovation Award. This award is given to individuals, organizations, or businesses that – through progressive design, construction, technological innovation, and entrepreneurship – support IDA and its mission to preserve night skies by promoting quality outdoor nighttime lighting.

The Astrophile Series is the first Phosphor Converted Amber (PCA) streetlight with a correlated color temperature range between 1650K and 2000K and a Narrow Band Amber (NBA) streetlight with a peak dominant wavelength of 592nm ±2.5nm. Most notably, the 1650K PCA and the 590nm NBA LEDs have zero emissions of short-wavelength blue light. Additionally, Crossroads LED incorporated an adjustable optical shield that reduces and eliminates both house and street-side light trespass, as well as a new aluminum housing designed exclusively to recess the LED lenses deep within the fixture, effectively reducing both nuisance and disability glare. Cities in New Mexico, Arizona, California, Missouri, and Washington state (USA) have all either committed or shown interest in the Crossroads LED “Astrophiles Series.”

More information is available here.

 

 

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‘Big Plumbing’ Muscling Into Lighting

For the past two decades, thought leaders in the lighting industry have been publicly lamenting that the lighting industry will be gobbled up by the electronics industry, Silicon Valley tech giants, and the big telecoms. 20 years into the LED era for general lighting, and this still has not come to pass.

For the past two decades, thought leaders in the lighting industry have been publicly lamenting that the lighting industry will be gobbled up by the electronics industry, Silicon Valley tech giants, and the big telecoms. 20 years into the LED era for general lighting, and this still has not come to pass.

However, there is another, less glamorous industry slowly increasing its acquisitions, footprint, and influence in the lighting industry, and it is hardly getting any attention. It’s Big Plumbing. Perhaps the most recent and largest move was Ferguson’s recent acquisition of Minka Group, a major decorative lighting manufacturer for the residential and resimercial markets. Ferguson is the largest wholesale distributor of residential and commercial plumbing supplies and pipe, valves and fittings in the U.S. The company also has 245 Ferguson Bath, Kitchen & Lighting Gallery locations in the United States that sell lighting and fan products. Ferguson is a $24 billion company that is listed on both the London Stock Exchange (LSE:FERG) and the New York Stock Exchange (NYSE: FERG).

The Minka Group acquisition was just the latest move by Ferguson into lighting. Back in January of this year, Ferguson quietly acquired RP Lighting + Fans, another decorative manufacturer of lighting and ceiling fans.

It’s not just Ferguson, either. Kohler Company introduced its Kohler Lighting line in 2020, in order to provide decorative luminaires that pair with its plumbing fixtures. Moen also offers decorative lighting. Keep your eye out for continued moves by Big Plumbing.

 

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Chinese Trade Rebounds In May With Eased COVID Restrictions

China’s trade growth rebounded in May after COVID restrictions that shut down Shanghai and other industrial centers began to ease.

China’s trade growth rebounded in May after COVID restrictions that shut down Shanghai and other industrial centers began to ease. Exports surged 16.9% over a year earlier to $308.3 billion, up from April’s 3.7% growth, a customs agency statement said Thursday. Imports rose gained 4.1% to $229.5 billion, accelerating from the previous month’s 0.7%.

China’s trade has been dampened by weak export demand and curbs imposed to fight COVID outbreaks in Shanghai, site of the world’s busiest port, and other cities. Consumer demand was crushed by rules that confined millions of families to their homes.

Read the full AP story here.

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Distributors Report Infrastructure Law Funds Flowing

A recent survey by Electrical Wholesaling of the Top 150 electrical distributor chains, revealed that Infrastructure Law funds are beginning to be spent in the electrical market.

A recent survey by Electrical Wholesaling of the Top 150 electrical distributor chains, revealed that Infrastructure Law funds are beginning to be spent in the electrical market. The following percentage of responding distributors report that they see infrastructure law funds already flowing:

  • Expansion of high-speed broadband internet for underserved rural or urban areas: 12%
  • Electric utility grid expansion or retrofit: 6%
  • Electric vehicle charging stations: 14%
  • Expansion or retrofit of traditional infrastructure projects, including roads, bridges, rail, ports, and airports: 9%
  • Build, preserve and retrofit homes and commercial buildings: 8%
  • Modernize schools and child-care facilities: 11%
  • Upgrade veterans’ hospitals and federal buildings: 22%

The four bolded spending categories above will lead to more lighting sales. The EV charging spending is another reason multiple lighting manufacturers are jumping into the EV charger market.

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