Fitch Ratings lowered its forecast for global economic growth this year partly because of the debt trouble with China Evergrande Group, one of the country’s largest real estate developers. In its October overview of the credit environment, the debt-rating firm said global gross domestic product could be 6% instead of the 6.3% it had forecast in June.
China’s credit risks around Evergande, which has missed debt interest payments and owes about $300 billion, and financial problems with distressed debt firm Huarong Asset Management Co. were factored into Fitch’s weakened global GDP outlook.
It also cited weaker production in other parts of Asia and supply chain constraints in the United States.
China’s real estate troubles worsened this week when China real estate developer Fantasia Holdings reported to the Hong Kong stock exchange Monday that it didn’t repay $206 million of principle on debt that matured that day.
Leisure and Hospitality Lead Job GrowthLeisure and hospitality and large companies led a surge in September private payrolls that beat expectations.
Payroll company ADP reported that private company employment increased by 568,000 in September, a big swing from the August figure that was revised downward by 34,000 to 340,000. Economists had estimated the September number to be about 430,000.
Large companies represented bulk of the overall increase with 390,000. Most of that increase came with firms employing more than 1,000 people. Leisure and hospitality led with 226,000 jobs, marking seven consecutive months that sector has led job growth. It was one of the hardest hit sectors last year at the start of the pandemic.
Daniel Zhao, senior economist for online jobs and company review site Glassdoor, said on Twitter that the ADP report is a positive signal ahead of the Labor Department’s report, “indicating faster jobs growth even in pandemic exposed sectors.”
Hotel Occupancy DipsU.S. hotel occupancy fell last week as the industry awaits the full return of group business.
Occupancy last week dropped 1.5 percentage points to 61.7% from the previous week, according to data from hotel industry research firm STR, which is owned by CoStar Group. Weekend occupancy fell 1 percentage point to 75%.
Though weekly occupancy was 91% of the comparable week in 2019, the comparison is against a week of lower occupancy because of where the Jewish holiday Rosh Hashanah fell on the calendar two years ago, Kelsey Fenerty, senior research analyst with STR said.
Demand for group hotel business declined last week, which Fenerty said could be related to fall break schedules for schools. Returning group business, which is more profitable than leisure business, is viewed as the key to the hotel industry's recovery.
For the week, Denver narrowly topped Nashville for the highest occupancy among the 25 largest tourism markets. Denver recorded 70.2% occupancy while Nashville came in with 69.9%, both of which are roughly 10 percentage points lower than 2019.
Source: CoStar Group, www.costar.com