Finance topics

Jeff Andrews tried to remain diplomatic when asked about the McGuinty government’s $7 billion green-energy deal with South Korean titan Samsung Group.

The president of Pro-Power and Energy Ltd. in Port Hope could see, on the surface, the attraction of the deal. Samsung C&T and its consortium partner, Korean Electric Power Corp., have assured four manufacturing facilities will be established between 2013 and 2015. Two will make wind towers and wind blades, the other two will assemble solar modules and inverters.

Samsung has also committed to developing 2,000 megawatts of wind power and 500 megawatts of solar power across parts of Ontario. Together, these manufacturing and power-development initiatives are expected to create 16,000 jobs over six years, welcome news during tough economic times, Premier Dalton McGuinty said Thursday.

But there’s a catch. Samsung will get 4 per cent more for the wind and solar power it produces, and it will get priority access to Ontario transmission capacity that’s in short supply. Many energy developers who have been waiting patiently for access to transmission will now have to wait a little longer.

Why, asked Andrews, is the Ontario government giving a deep-pocketed, foreign conglomerate special treatment that’s not being extended to local ventures struggling to create homegrown manufacturing and green energy?

"It’s great for Samsung, but Samsung doesn’t need it as much as we need it," he said.

Pro-Power, in partnership with CWind Inc. of Owen Sound, has been busy putting together its own consortium that aims to build wind turbine nacelles, blades and towers in Ontario. It signed a 10-year contract with auto-parts manufacturer Linamar Corp. to make the nacelles, and has established two subsidiaries, WindPro and WindBlade, to make turbine towers and blades.

This all-Ontario consortium has been attracting investors and wind developers with thousands of megawatts of projects in the pipeline are placing orders fast cash loans. Linamar is on course to make 350 nacelles a year in 2012, well before Samsung will be up and running.

"We have been working hard, digging deep and trying to get the government’s support," said Andrews. "We’ve had some response, but not as much as we think we should get. We’ve proven beyond doubt that we’re serious about it. The Ontario government needs to step up and give support to the people who have really proven they’re committed."

The Green Energy Act, passed last year, was supposed to create a level playing field, he added. Along with the feed-in-tariff program launched in September, Pro-Power and hundreds of other manufacturers and developers have been working on the assumption all are playing by the same rules.

Andrews is clearly frustrated. "We are the Ontario story. I know that sounds cocky, but we are. Our technology was developed and proven here in Ontario by Ontario residents. The patents were established here in Ontario."

McGuinty justified the deal Thursday as a way to accelerate Ontario’s green economy, by drawing an "anchor tenant" that can stimulate jobs and exports much more quickly. The alternative, he said, is to "hope" our industry of smaller players will grow over time while the province misses out on export opportunities to a U.S. green-energy market ready to explode.

Ian MacLellan, vice-chairman of solar-cell manufacturer Arise Technologies Corp. in Waterloo, said that kind of thinking doesn’t work in the long run. "If you took that approach looking back 30 years to Silicon Valley, they would have funded Xerox and not talked to Steve Jobs."

Source

Instant payday loan. In a few quick and easy steps we will help you get up to $1500 the same business day.

Sweden’s central bank kept the benchmark interest rate unchanged and said it will stick to plans to leave the rate at a record low until autumn next year to support the economic recovery and reach its inflation target.

The seven-day repo rate was left at 0.25 percent, the Stockholm-based Riksbank, the world’s oldest central bank, said on its Web site today. The decision was expected by all 15 economists surveyed by Bloomberg.

“The recovery in the economy is continuing and inflationary pressure will be low in the coming period,” the Riksbank said in its statement. Today’s decision was necessary “to attain the inflation target of 2 percent and to support the economic recovery. The recovery is from a low level and there will be ample spare capacity over the coming years.”

The largest Nordic economy’s contraction this year will be the severest since World War II, Finance Minister Anders Borg said last month. The export-reliant nation’s slump has been deeper than in neighboring Denmark and Norway after Swedish manufacturers, including the world’s biggest maker of ball bearings SKF AB and truck maker Volvo AB, cut thousands of jobs to adjust to smaller markets. Exports make up half of Sweden’s $480 billion economy.

‘Earlier’

“We still believe that the Riksbank will hike earlier than they forecast since the labor market will stabilize earlier and develop better than they predict,” said Annika Winsth, chief economist at Nordea Bank AB in Stockholm. Nordea forecasts a rate increase to 0.75 percent in April.

The krona was up 0.3 percent against the euro, after earlier having appreciated 0.5 percent, at 10.4310 at 10:19 a.m. in Stockholm. Against the dollar, the krona was up 0.4 percent at 7.1989.

The economy will shrink 4.5 percent this year and grow 2.7 percent next year, the bank forecast today. That compares with an earlier forecast of a 4.6 percent contraction in 2009 and 2.5 percent growth next year.

The central bank also revised its unemployment forecast, saying the rate will peak at 10.1 percent next year, compared with a previous estimate of 10.3 percent, and fall to 10 percent in 2011.

Unemployment

Sales abroad slumped for a 12th consecutive month in October, forcing companies to cut more jobs and threatening to send unemployment higher than the 8.1 percent rate recorded in October, not adjusting for seasonal swings. Ericsson AB, the world’s largest maker of mobile-phone networks, last week said it must continue cutting jobs and costs, affecting 946 people.

“We’re facing rising unemployment,” Borg said on Dec instant payday loans. 4. His ministry predicts the jobless rate will peak at 10.7 percent in 2010 and the economy will shrink 4.9 percent this year.

Industrial production fell for a third month in October, with the decline deepening to 2.7 percent from a 0.5 percent fall in September, Statistics Sweden data show. Industrial output sank an annual 16.1 percent in October and hasn’t grown for 15 months, according to the office.

“The Swedish economy is split in two, where industry is performing very poorly while other parts are doing better,” Winsth said. “The Riksbank focuses a lot on industry and the problems we’re experiencing there.”

Inflation Outlook

The Riksbank today said prices will fall 0.3 percent this year compared with an earlier estimate of a 0.4 percent drop. It cut its inflation expectations to 0.8 percent from 0.9 percent next year and said prices will rise 3 percent in 2011.

The recession has undermined price pressure, with Sweden posting eight months of deflation through November, the longest period of price declines since 1980, when records start. Consumer prices fell an annual 0.7 percent last month, compared with the Riksbank’s 2 percent price growth target.

Prime Minister Fredrik Reinfeldt’s government, which is preparing for an election in September, will spend 32 billion kronor ($4.5 billion) in 2010, or about 1 percent of gross domestic product, on tax cuts and welfare to support demand. His administration came to power in 2006 promising to create jobs by reducing taxes and unemployment benefits. The government trails the opposition by 7.5 percentage points, according to an opinion poll published this month by Statistics Sweden.

Some indicators have pointed to economic improvement. Sweden emerged from recession in the second quarter and expanded 0.2 percent in the three months ended September. Stimulus measures have helped send consumer confidence higher, with the index rising to 11.4 in November from 7.5 in October, marking a fourth consecutive month of positive readings.

“The economic ground should be sufficiently solid for the Riksbank to start hiking the repo rate by the end of summer next year,” Danske Bank said in a report yesterday.

Other central banks are also exercising caution. Oslo-based Norges Bank will probably leave its benchmark rate on hold today after raising the rate a quarter point on Oct. 28 to 1.5 percent as policy makers adjust their stance to lower oil investment and the impact of a strong krone on exports.

Source

Sprint Nextel Corp reported a wider quarterly loss and a revenue decline, but its success in slowing the loss of the most valuable wireless subscribers took some of the sting out of the results.

At the heart of Sprint’s struggles is the loss of postpaid monthly-bill-paying subscribers, the most lucrative subscribers in the mobile business. That dwindling subscriber base has put Sprint further behind rivals Verizon Wireless and AT&T Inc in the wireless wars.

In the third quarter, Sprint, the No. 3 U.S. mobile service, lost 801,000 postpaid subscribers, a significant number but well below the 870,000 losses analysts had feared.

Helped by the introduction of Palm Inc’s popular Pre smartphone, the subscriber losses slowed from 991,000 in the second quarter and 1.25 million in the first quarter.

“They still have an extremely long way to turn around the business and generate positive post-paid subscriber growth,” said Soleil/Nelson Alpha Research analyst Michael Nelson.

“Clearly, a loss of 800,000 a quarter isn’t going to cut it, but it does show some sign of improvement and says they are at least heading in the right direction.”

Its shares fell 4 percent in early afternoon trading.

Sprint Chief Executive Dan Hesse called the sequential improvement the best in more than five years, and said he expected a smaller postpaid subscriber loss again in the fourth quarter. Hesse expects improving subscriber trends in 2010.

The results are a far cry from the numbers put out by AT&T and Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc no teletrek payday advance. Between them, AT&T and Verizon Wireless added more than 3 million subscribers in the third quarter.

Still, the improvement in the postpaid business helped offset depressed quarterly financial results, analysts said.

“Although it generated lower financial results, certainly the highlight of the quarter was the improvement in postpaid customer losses,” said Nelson.

Sprint’s third-quarter loss widened to $478 million, or 17 cents a share, from $326 million, or 11 cents a share, a year earlier. Revenue fell about 9 percent to $8.04 billion.

Excluding items, Sprint posted a loss of 19 cents a share, according to Thomson Reuters I/B/E/S, compared with analyst estimates of a loss of 15 cents per share. Revenue was forecast at $8.09 billion.

While losing monthly-bill-paying wireless customers, Sprint fared well with prepaid customers, adding some 666,000 of them in the quarter due to Boost Mobile, a service that allows for unlimited calls and texting at a set monthly fee.

Still, investors worry that Sprint could be overly dependent on growth from prepaid, a business that tends to be less profitable and less predictable than postpaid. Some also worry the market will pull back once the economy improves. 

Read more

A U.S.-led group that includes former Ford Motor Co director Michael Dingman is in talks to acquire the automaker’s money-losing Volvo brand, a source familiar with the matter said on Monday.

The group, called the Crown consortium, has been in talks with Ford over Volvo for some time, said the source, who asked not to be named because the discussions are private.

The discussions raise a potential rival bid for Volvo to that of China’s Geely Automotive, which confirmed in September an interest in the Swedish brand.

Ford, the only large U.S. automaker not to restructure under a government-supported bankruptcy this year, in December said it was considering selling Volvo. The automaker has been divesting brands to focus on Ford, Mercury and Lincoln and conserving cash to support a turnaround.

A Ford spokesman said the automaker was in discussions with parties interested in acquiring Volvo. He declined to identify the parties or to comment on the potential timing of any sale.

“We will provide an update as soon as we have something to say,” Ford spokesman Mark Truby said.

The Financial Times first reported the Crown consortium’s interest in the Volvo brand and said the group was fronted by Dingman and former Ford and Chrysler executive Shamel Rushwin.

Dingman served on Ford’s board from 1981 to 2002, when he reached its mandatory retirement age.

The FT said the consortium had fully secured financing from U.S. private equity groups and was seeking additional backing from Swedish investors to signal its intent to keep Volvo in the country, citing people close to the sale.

The FT reported another informed person as saying the U.S. consortium had offered significantly less than Hong Kong-listed Geely, but that both plans involved similar plans for more than $3 billion of additional investment in Volvo.

The FT quoted a person close to the sale as saying Geely had offered just less than $2 billion for Volvo. Other media reports have put the price tag at about $2.5 billion.

The timing of the sale remains unclear. Ford has been restructuring Volvo to cut costs and to separate its operations to run on a stand-alone basis. It started discussions on the sale of Volvo in the first quarter of this year.

The unit was designated as held for sale during the first quarter, meaning that Ford expected to sell it within a year, but the process has moved at a deliberate pace.

Volvo is the last brand left at Ford from the automaker’s former premier auto group. Ford previously sold off Aston Martin, Jaguar and Land Rover, but has continuing relationships with each brand and likely would retain ties to Volvo also.

The process of separating Jaguar and Land Rover from Ford for the sale to Tata Motors required working out continuing relationships that may be even more extensive between Ford and any new owner of Volvo.

As a result, Ford’s interests run beyond transaction price to the long-term financial stability of Volvo. 

Read more

The 700,000 cars sold in the cash-for-clunkers program prompted U.S. automakers to boost 2009 production after a long period of inventory cuts, spurring North American steelmakers to restart idled mills.

Now that the clunkers program has wound down, the steel industry is unsure whether demand will stay high enough to absorb the additional output. So far, analysts are not seeing a U.S. economic recovery robust enough to sustain the pick-up in steel demand.

“As a result of the cash-for-clunkers program as wells as some restocking throughout the automotive supply chain, there has been an increase in end-user demand. And there is very little steel inventory at present,” said Luke Folta, steel analyst at Longbow Research.

By late August, some steel producers had already closed order books for October and are now working to fill them. But analysts are waiting to see whether the increased production will still be needed after the next few months.

“Aside from automotive, and a few other smaller pockets, there hasn’t been a real pick up in end-user order activity. There’s a meaningful amount of capacity coming online and we’re somewhat concerned that it may have gone too far,” said Folta.

Europe-based ArcelorMittal, the world’s largest steelmaker, and U.S. Steel, said late last month they were restarting production at two blast furnaces each in the U.S. Midwest and Canada in response to improving demand.

Adding production capacity mostly to accommodate increased car output will boost U.S. steelmakers’ operating rate to 60 or 70 percent of capacity, analysts said.

“It doesn’t get you all the way back, but the industry is running at a 55 percent operating rate (up from about 45 percent) and it is justified by what we have seen in real consumption over the last several months,” said Charles Bradford, partner at Affiliated Research Group good credit score.

A major drawdown in steel service center inventories, a process that kept steel mill capacity near a 45 percent operating rate for the first seven months of 2009, has meant consumers now need to order steel just to maintain current levels of output even if the economy stays flat.

“The absence of inventory destocking has been the most significant driver of the increases in steel production and mill shipments over the past couple of months,” said Folta.

With inventories extremely low, it is unlikely steel output will fall again to this year’s low levels. But it is also unlikely to surge dramatically, said Anthony Young analyst on the Dahlman Rose metals team in New York.

Shipments from service centers, the middle men between raw steel producers and end users like manufacturers of appliances, cars or computer boxes, have stood fairly flat for months.

In July, steel mills saw a 15 percent increase in orders even though actual sales at service centers barely rose.

“I think it’s fair to say that the bulk of inventory destocking is behind us. If you look at stock inventory levels at the distribution level they are very low,” said Folta.

About 50 service centers indicated in the latest monthly Longbow survey that they are not carrying any excess stock. 

Read more

The collapse of Lehman Brothers a year ago has been likened to the 1994 crash that killed Formula One star Ayrton Senna, in the way it has spurred calls for root-and-branch review of risk in the financial sector.

Senna’s tragedy led to regulatory changes in racing that have been effective; deaths on the track are now a rarity.

But governments are not finding it nearly as easy to make quick and comprehensive changes to financial regulation.

That means risks may remain for another collapse on the scale of Lehman in coming years, though authorities would probably be able to act more decisively next time to prevent a financial crisis from spreading around the globe.

The core lesson from Lehman for governments has been clear — regulating against all future crises is futile but there are ways to limit fallout and need for government bailouts.

Britain witnessed at first hand with Lehman the legal nightmare when a complex, global bank goes under. Its financial services minister, Paul Myners, wants banks to simplify their structures and make “living wills.”

“We need to move to implementation across the EU. The time has come to move from theorizing to action. Simple structures are an essential precondition for effective arrangements,” Myners said.

Patrick Buckingham, a partner at Herbert Smith law firm in London added: “The sheer complexity of the Lehman insolvency has inevitably triggered a desire for a plan for an orderly wind down in the form of a living will, and may also lead to regulators asking for current entity arrangements to be simplified.”

Bankers see the Lehman crash as a major turning point.

“Was Lehman the Senna of international banking? Yes. All the changes to regulation are going to add up to less systemic risk,” an investment banking industry official said.

“But are all the lessons learnt feeding through into policy changes? Only up to a point,” he added.

Leaders of the G20 group of major nations pledged in April this year to strengthen financial supervision.

In the U.S. city of Pittsburgh this month, almost exactly a year after Lehman went bust, they will meet again to reinforce the need for stronger bank capital and wind up arrangements.

But some of the leaders are openly complaining the reforms are too slow or timid. Talk of a new, commonly adopted framework for financial supervision around the world has fizzled out as governments struggle with the nitty gritty of reaching agreements on regulatory change.

CONSENSUS 

Read more

Cisco Systems Inc and EMC Corp are in talks to create a new joint venture to provide technology services, the Wall Street Journal said, citing people briefed on the plan.

The paper said the new venture, code-named Alpine, would be aimed at data centers — the giant computing rooms that power the Internet and corporate networks.

The joint venture plans to target large businesses and emphasize installing products from Cisco and EMC, the newspaper said, adding that it was unclear when the new venture could be announced.

Cisco and EMC would both have board representation on a new company, the people told the paper.

“EMC and Cisco have a long-standing strategic alliance and over the years we continue to broaden and strengthen the alliance” a spokesman for EMC was quoted as telling the paper. A spokesman for Cisco told the paper the company did not comment on rumor or speculation.

Cisco and EMC could not be immediately reached for a comment by Reuters.

(Reporting by Chakradhar Adusumilli in Bangalore; Editing by Greg Mahlich)

Read more

When General Motors executives stopped in St. Louis last fall to meet with auto dealers, the economy was entering a free fall.

"We were right in the middle of the meltdown when we were out doing this. We just didn’t know it," said Mark LaNeve, GM vice president for sales. "I mean we thought it was a bad couple of weeks. And as it turned out, the vehicle market was collapsing, the stock market was collapsing, the banking sector (too)."

Last week, LaNeve, CEO Fritz Henderson and other GM executives met with Midwestern auto dealers in downtown St. Louis for the first time since emerging from bankruptcy last month. The automaker is going forward with fewer brands, fewer vehicle "nameplates" and, ultimately, fewer dealerships.

The launch of the nine-city dealer tour comes at a pivotal time for the American automaker. The deep recession has hurt auto sales, and consumers have been lukewarm to some of its vehicle brands.

Henderson called last week’s meeting a good opportunity to reconnect with GM dealers and get people "charged up about winning in the marketplace." To do so, the new, smaller GM has to win back the hearts and minds of U.S. consumers, he added.

"For those people who own our vehicles today, and are happy with them, we want to make sure we make them even happier," Henderson said after the meeting. "And for those that don’t want to consider us, we want to compete and get back on their consideration list."

Several area dealers were upbeat about what they heard and the prospects for the future. The fact that Henderson attended this year’s meeting was further evidence that "they mean business; that they’re serious," said attendee Greg Flotte, general manager of Don Brown Chevrolet in St. Louis.

Flotte said there already had been some signs that it wasn’t business as usual at the new GM. When the federal government was slow to reimburse dealers on Cash for Clunkers rebates, GM came up within 48 hours with a loan program to help dealers who had not been paid.

"That would not have happened under the old General Motors," Flotte said. "To have that happen that quickly and take action that was effective was something that I was very, very impressed with."

General Motors plans to put more marketing muscle behind fewer vehicle models within its core brands — Chevrolet, Buick, Cadillac and GMC, LaNeve said. "We’re going to very aggressively get our story told. That’ll kind of start in September."

Dealers said they welcomed that focused approach to advertising.

LaNeve said reducing the number of dealerships proved "an enormously emotional, painful process." The company plans to shed about 1,200 dealers nationwide under its reorganization, but GM officials would not disclose how many are in the St. Louis region or elsewhere.

It also plans to sell off Hummer, Saturn and Saab, and discontinue the Pontiac brand.

"So we’ll have a 24, 25 percent reduction in the overall number of dealers, which we did to strengthen the dealers," he said. "We’ve got to have dealers that can compete."

The weakened economy has hurt demand for GM’s full-size GMC Savana and Chevrolet Express vans built at the company’s Wentzville plant, where GM eliminated one of two production shifts. But Henderson said that the van remained an important product and that Wentzville was "the only place where we build that van."

One analyst said GM’s campaign for the hearts and minds of consumers, dealers and auto enthusiasts was not unlike a political campaign.

"A lot of it, at the end of the day, is to get votes," said Erich Merkle, president of Autoconomy in Grand Rapids, Mich. "GM wants to be elected. They want to be perceived as a cutting-edge, high-quality company."

Source

The federal government does not plan to intervene in Nortel Network Corp.'s sale of its key wireless unit to Sweden-based Ericsson until the deal has been reviewed by U.S. and Canadian courts next week, a spokesperson for Industry Minister Tony Clement said today.

“It would be inappropriate to speculate on this issue while it is still being reviewed by the courts,” press secretary Laryssa Waler wrote in an email to the Star. “Because it's before the courts, I can't comment further.”

The $1.13 billion (U.S.) deal will be reviewed on July 28.

But New Democrat MP Paul Dewar called this attitude irresponsible and said the Conservatives were “sitting on the sidelines.”

“This do-nothing approach by the Conservatives when it comes to jobs needs to be put to an end,” he said in a phone interview today. “They're waiting for what the courts say, but they should have been at the table (during bankruptcy proceedings). It's astonishing they didn't take the option of having representation at the table.”

Dewar, whose riding in Ottawa Centre encompasses many Nortel employees, said it was the federal government's lack of attention to the floundering company that “let it get away.”

“It didn't have to be this way. Nortel was the premier telecommunications company not too long ago,” he said. “It should have been Nortel acquiring Ericsson – not the other way around.”

Liberal Industry, Science and Technology critic Marc Garneau said he agreed Nortel's announcement Saturday makes it “a sad day for Canadians,” but there does not appear to be grounds for Ottawa to step in at this point.

“Obviously, as a Canadian, it hurts and it's a pity this is happening. But once you get past the emotional part of it, the fact is (Nortel) has been in bankruptcy protection for the past six months … Something was wrong,” he said. “If we want to play in the big leagues, we have to play by international rules … (And) it appears everything did go according to the rules established.”

Garneau, MP for Westmount-Ville-Marie, said everything in Nortel's bankruptcy protection proceedings seemed to follow regulations despite BlackBerry-creator Research in Motion Ltd.'s claim it had been blocked from bidding in the auction.

“I have no basis to say RIM was excluded. I'm assuming RIM could've bid if it complied with payday loan no faxing… the rules,” he said. “I have no evidence to say anything unfair occurred.”

Garneau added Clement's inaction when Nortel approached the government months ago resulted in the tragic outcome for Canada's largest high-tech research and development investor. “Because nothing was done, events took their course.”

The Swedish telecom equipment giant's winning bid beat out Europe's Nokia Siemens Network and a U.S. private equity firm for the unit, Nortel announced early today. RIM says it would have bid $1.1 billion if allowed to join the auction.

Nortel has said at least 2,500 employees will be offered jobs at Ericsson.

Garneau said he hopes this is the case. “Hopefully, these jobs will be (offered). They're high-tech jobs. They're very qualified people.”

The government would review the deal if national security was at stake, the Liberal industry critic said, but he has yet to see any evidence the sale involves sensitive intellectual property being handed over to Ericsson.

Last year, Ottawa blocked MacDonald Dettwiler and Associates Ltd. from selling its sensitive satellite and robotics technology to American rocket-maker, Alliant Techsystems Inc., for $1.3 billion.

But that was a different case from Nortel, Garneau said. “If Nortel were providing the Canadian government with some (technology) that was classified for Canadian defence or security purposes … that (was) going to be turned over to Ericsson, then there would be an argument.”

Dewar, on the hand, said investment review should be based on the overall effect on the country – not just national security.

The Macdonald Dettwiler and Associates Ltd. case was the only time Ottawa intervened in a deal using the Investment Canada Act, which outlines the legal guidelines non-Canadian investors are required to follow, the New Democrat MP said.

“Our investment review should be strengthened. What's the net benefit to Canada? That's what we should be looking at here. It shouldn't be just around security. (The Nortel-Ericsson) deal should be reviewed and looked at very closely,” he said. “(The act) is a joke. It's a paper tiger.”

With files from Chris Sorensen.

Source

Confidence among U.S. house builders rose this month to the highest since September as sales of single-family units increased and more prospective buyers expressed interest.

The National Association of Home Builders/Wells Fargo index of builder confidence rose to 17 this month from 15 in June, the Washington-based NAHB said Thursday. A reading below 50 means most respondents view conditions as poor.

Lower house prices and tax credits have helped the housing industry stabilize after almost four years of decline. Combined sales of existing and new houses climbed to a 5.1 million annual pace in May, the highest level so far this year. Economists are incorporating an easing in the housing slump in their forecasts of an economic recovery in the second half of 2009.

"Builders are seeing slightly better sales conditions this month as consumers take advantage of the first-time buyer tax credit, low interest rates and attractive home prices," NAHB Chairman Joe Robson said in a statement. At the same time, he said, "many remain quite concerned" about competing with foreclosed properties and a lack of available credit for some potential buyers.
The builder confidence index was forecast to increase to 16 this month, according to the median estimate of 46 economists surveyed by Bloomberg News. The gauge, which fell to a record low of 8 in January, averaged 16 in 2008 payday loans. It was first published in January 1985.

The survey asks builders to characterize current sales as "good," "fair" or "poor" and to gauge prospective buyer traffic. It also asks participants to assess the outlook for the next six months.

The builder group’s index of current single-family house sales rose to 17, the highest since September, from 14 last month. The gauge of buyer traffic increased to 14, also the highest since September, after holding at 13 for three months. A measure of sales expectations for the next six months held at 26 for a second month, after readings of 27 in May and 24 in April.

"The component gauging sales expectations for the next six months remained virtually flat for a fourth consecutive month," David Crowe, chief economist at NAHB, said in a statement. "Builders recognize the recovery is going to be a slow one and that we are facing a number of substantial negative forces."

Confidence increased in one of the four regions, rising to 20 in the South from 15 in June. It held steady at 15 in the West and at 14 in the Midwest, falling to 16 from 19 in the Northeast.

Source