Market Trends May 2023
Q1 Remodeling Index Remains High
The National Association of Home Builders (NAHB) Westlake Royal Remodeling Market Index (RMI) rose one point to 70 for the first quarter.
The Current Conditions Index dropped two points to 75 and two of the three components of the index dropped as well. The component measuring large remodeling projects ($50,000 or more) fell three points to 71 and the component measuring small remodeling projects (under $20,000) dropped two points to 77. The component measuring moderately-sized remodeling projects (at least $20,000 but less than $50,000) remained unchanged at 78.
The Future Indicators Index increased two points to 64. The component measuring the current rate at which leads and inquiries are coming in rose two points to 59 and the component measuring the backlog of remodeling jobs increased two points to 69.
NAHB noted that remodelers remain generally optimistic although some are noting the negative effects of higher interest rates and a shortage of materials. Customers are reportedly still undertaking large projects but are more frequently paying cash.
An RMI of 70 is consistent with NAHB’s projection that the market will grow in 2023, but at a slower pace. The overall RMI is calculated by averaging the Current Conditions Index and the Future Indicators Index. Any number over 50 indicates that more remodelers view remodeling market conditions as good than poor.
Remodeling to accommodate aging in place is popular, with 64% of remodelers reporting doing aging-in-place work during the first quarter, with bathroom projects like grab bars and curb-less showers being particularly common.
Generative AI for Business
Amazon joined the generative AI race and introduced Bedrock, a generative AI platform developed for businesses rather than consumers. The tools offered by Bedrock include two major language models designed by Amazon: Titan Text, which is a chatbot similar to ChatGPT that can create text for things like blog posts and emails, and Titan Embeddings, which helps with search personalization.
Customers will be able to customize the Titan models to their own data and needs, but the information they input will not train the Titan models, so all data will remain safe from other customers and competitors, according to Amazon.
Bedrock will also include models from Google-backed startups AI21, Anthropic, and Stability AI, which turns text into images, according to Amazon. Amazon says that they are “democratizing access” to AI development by offering a secure online service for businesses to build their own applications, which Amazon says is more efficient and less expensive than other choices because Amazon believes they can run AI software more efficiently and cheaply than their competitors.
Microsoft has a big lead in the AI race thanks to its multibillion-dollar investment in OpenAI, the creator of the ChatGPT chatbot. Analysts say one of the differences between Bedrock and other generative AI is that others are consumer-facing and Bedrock offers a platform for companies that want to incorporate generative AI capabilities.
In January, Amazon announced a $35 billion investment in data centers across Virginia as part of their expansion of Amazon Web Services.
Will Artificial Diamonds Revolutionize Computer Networks?
Amazon is teaming up with a unit of De Beers to grow artificial diamonds, betting that custom-made gems could help revolutionize computer networks. Amazon Web Services’ Center for Quantum Networking focuses on next-generation ways to transmit data securely over longer distances. Quantum networking uses subatomic matter to deliver data in a way that goes beyond today's fiber-optic systems.
The diamonds would be part of a component that lets the data travel farther without breaking down. Conventional signal repeaters can’t handle information in this form, known as qubits. De Beers is hoping to find a new application for industrial diamonds, more commonly used for lenses. Being able to use them in quantum computing would be a big opportunity for both companies. A diamond is the solid form of the element carbon. Its crystal structure makes it the hardest and most thermally conductive material occurring in nature. Diamonds also naturally pick up a limited number of impurities, such as nitrogen atoms, that give them color, which are actually beneficial for use in a quantum-based network.
Retail Theft Leads to Store Closings
Major retailers in the US have been forced to shut down stores due to millions of dollars in losses as rampant theft plagues big box stores across the country. Walmart recently shuttered 17 stores in nine states, including all of their stores in Portland and four stores in Chicago as shoplifting losses became too great to justify keeping the stores open. In 2021 retailers lost a combined $94.5 billion to shrink and organized retail crime incidents soared by 26.5%, according to the 2022 National Retail Security Survey. Self-checkouts have also made it easier for people to walk out without paying for items. In many cities, thefts under $950 are not prosecuted, effectively giving opportunistic thieves a license to steal.
Trafficking in counterfeit goods globally is approaching a trillion dollar problem. In 2020, the Department of Homeland Security called on the private sector to take a more active role in detecting and preventing the trafficking of counterfeit goods.
Amazon introduced the Anti-Counterfeiting Exchange (ACX), an industry collaboration designed to make it safer to shop online and more difficult for counterfeiters to move among different stores to attempt to sell their counterfeit goods. ACX allows participating stores to share information about confirmed counterfeiters who attempted to use their services to try to sell counterfeit products. By sharing information about these counterfeiters, ACX participants can identify and stop perpetrators more quickly. An independent third party ensures anonymity for participants so they can share information and make quick referrals to law enforcement.
Amazon has already detected hundreds of matching accounts where the same counterfeiter tried to create selling accounts on Amazon and at least one other store operator. ACX allows information about a counterfeiter to be shared immediately through the exchange, allowing other stores to stop the counterfeiter more quickly. Amazon invited all retailers and marketplace service providers to join the ACX and fight back against counterfeiters.
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