Spotlight on Industry Headlines
BACK-TO-SCHOOL SPENDING LIKELY TO TOP PRE-PANDEMIC LEVELS T he back-to-school season is usually a time of new begin- nings, but consumers are more eager than usual for a fresh start after the pandemic. That emotion will fuel spending, according to a new forecast. Back-to-school sales in the U.S. are expected to grow 6.7% from 2019 and 5.5% from last year’s Covid days, according to a forecast by Mastercard SpendingPulse. The company uses nonautomotive spending patterns online and in stores to make retail projections for the period that spans from mid-July to early September. The sales season is typically a major driver for retailers as fam- ilies buy school supplies, clothes and college dorm decor. This year however, it will also serve as a barometer for consumer confi - dence as Covid cases wane in the U.S. and many people return to routines like full days in a classroom, meetings at the office and a busier roster of activities. A s the amount of driving consumers did fall, auto insur- ers refunded $14 billion in premiums last year, accord- ing to the Insurance Information Institute. Rates continued to stagnate, or even decline, through the first quarter for this year. However, the most recent consumer price index data showed the auto insurance index up 16.9% in May, following a 6.4% rise in April — the first increases since March 2020. Auto insurers are facing a number of challenges as the econ- omy reopens. Workers are returning to offices and vaccina - tions are prompting many people to take summer vacations. Government data from March, the most current statistics available, show driving up 19%. The result of people returning to pre-Covid driving levels means the rate of car accidents will rise and thus rates will soon follow. AUTO INSURANCE RATES ON THE RISE
OUT-OF-CONTROL SHIPPING COSTS T he skyrocketing cost of shipping goods across the globe may hit your pocketbook sooner than you think -- from that cup of coffee you get each morning to the toys you may want to buy for your kids. With upwards of 80% of all goods trade transported by sea, freight-cost surges are threatening to boost the price of every- thing from toys, furniture and car parts to coffee, sugar and an- chovies, compounding concerns in global markets already brac- ing for accelerating inflation. A confluence of factors -- soaring demand, a shortage of contain - ers, saturated ports and too few ships and dock workers -- have contributed to the squeeze on transportation capacity on every freight path.
I ndustry rumors are that oil giant Royal Dutch Shell is review- ing its holdings in the largest oil field in the United States for a possible sale as the company looks to focus on its most profitable oil-and-gas assets and grow its low-carbon invest - ments, according to sources familiar with the matter. The sale could be for part or all of Shell’s about 260,000 acres (105,200 hectares) in the Permian Basin, located mostly in Tex- as. The holdings could be worth as much as $10 billion. Shell is one of the world’s largest oil companies, all of which have been under pressure from investors to reduce fossil-fuel investments to stem changes to the global climate brought on by carbon emissions. Shell, BP Plc and TotalEnergies have pledged to lower emissions through increased investment in renewables while divesting some oil and gas holdings. COULD SHELL BE CONSIDERING SALE OF HOLDINGS IN LARGEST U.S. OIL FIELD
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JUNE 2021 • SPOTLIGHT ON BUSINESS MAGAZINE
SPOTLIGHT ON BUSINESS MAGAZINE • JUNE 2021
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