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It turns out that $1 trillion may not get you what it used to. A growing labor shortage in the commercial real-estate industry is driving up the costs of some projects, the WSJ's Peter Grant reports, and contractors say that could complicate lawmakers' plans for a big, new infrastructure-spending program. Construction businesses, excluding those building single-family homes, reached their highest employment level in April since November 2008, according to a builders' group, and contractors are starting to see shortages of electricians, carpenters and other subcontractor laborers. That's helping drive construction labor costs up 4% to 5% annually, outpacing inflation, and the industry still needs 500,000 more workers. The Associated Builders and Contractors estimates 600,000 more workers would be needed for the $1 trillion infrastructure plan President Donald Trump has said he will seek -- money that likely will have to include significant new training programs to get enough workers in place.
China's export engine appears to be slowing but it may still have enough power to push global trade growth. Outbound trade flows rose 8% in April from a year ago following a 16.4% gain in March, the WSJ's Mark Magnier reports, the latest signal that China's economy is shifting into a lower gear. That has sober implications for a big swath of the trading world, from iron ore producers in Australia to ports in Europe and the U.S., although analysts expect exports to continue to expand even if the pace of growth isn't robust. Even at a reduced pace, exports are expected to contribute to growth in the world's second-largest economy this year as demand for technology products expands in the U.S. and Europe. U.S. ports have been reporting strong inbound volumes from Asia, suggesting that the pull from developed markets remains strong even if China's internal economy is moving in fits and starts.
China's second-biggest e-commerce company says investors shouldn't get hooked on black ink. JD.com reported its first profit in the recent March quarter after revenue surged 41.2% from a year ago, supported by the nation's strong appetite for online shopping. But Chief Financial Officer Huang Xuande insists the company is focused on investing in "our aggressive expansion plan" rather than sitting back on its newfound profitability, according to a report in the Nikkei Asian Review. The warning highlights the fierce competition underway between JD.com and Chinese market leader Alibaba Group Holding. Both companies are bolstering their domestic reach in areas such as grocery delivery -- JD.com recently bought online supermarket Yihaodian from Wal-Mart Stores Inc. -- and in cross-border services in Southeast Asia. That suggests revenue should continue to soar but profits won't necessarily follow.
SUPPLY CHAIN STRATEGIES
Retail-industry consolidation is reaching into the luxury world. The new agreement by Coach Inc. to acquire rival Kate Spade & Co. will create a single company with $5.9 billion in annual sales and 1,300 retail stores and outlets around the world, the WSJ's Suzanne Kapner and Joshua Jamerson report, highlighting the changing landscape for retailing. The companies target different ends of the handbag market, but both have battled a retail environment that has been challenging, especially for designers with significant exposure to department stores. Coach has revamped its distribution strategy, pulling back from department stores and closing a third of its own sites while setting plans to reduce discount sales both through its own online channel and to off-price chains. Coach says it doesn't plan widespread store closing after the new acquisition, but analysts say that's exactly what they're expecting.
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IN OTHER NEWS
Copper extended its decline to a year-to-date low on new weak economic data from China. (WSJ)
Orders for Germany's manufacturing sector rose a more-than-expected 1% in March. (MarketWatch)
Quebec's big pension fund is opposing the re-election of Bombardier Inc. executive chairman Pierre Beaudoin, signaling a new level of investor activism at the ailing aerospace company. (WSJ)
Target Corp. will start testing a service called Target Restock for consumers to replenish their supplies of household goods. (Minneapolis Star-Tribune)
Yarn producer Frontier Spinning Mills will expand manufacturing and add a warehouse at its Alabama plant. (Sourcing Journal)
A COSCO Shipping container ship with capacity for 13,000 20-foot equivalent units became the largest commercial vessel to serve U.S. East Coast ports. (Virginian-Pilot)
BNSF Railway Co.'s first-quarter net income rose 7% to $838 million on an 8.8% gain in revenue. (Progressive Railroading)
ABF Freight parent ArcBest Corp. expanded its first-quarter net loss to $7.4 million as higher handling costs offset rising trucking revenue. (Heavy Duty Trucking)
Iron ore shipments in the Great Lakes and St. Lawrence Seaway rose 15.6% in the first four months of this year over last year. (American Shipper)
The board of directors of tanker operator DHT Holdings rejected the latest takeover offer from Norway's Frontline Ltd. (Maritime Executive)
China is considering taking a controlling stake in Myanmar's deep sea port of Kyauk Pyu on the Bay of Bengal. (Reuters)
Germany's Frankfurt-Hahn Airport saw freight traffic jump 41% in the first quarter as the cargo-focused site prepared for a takeover by Chinese conglomerate HNA Group. (Air Cargo News)
New York-based food delivery startup Maple shut down and will sell its technology to U.K.-based Deliveroo. (VentureBeat)
Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @jensmithWSJ and @EEPhillips_WSJ and follow the WSJ Logistics Report on Twitter at @WSJLogistics.
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(END) Dow Jones Newswires
May 09, 2017 06:45 ET (10:45 GMT)