Resilient Consumer, Messy Supply Chain
Companies are trying to bring supply chains closer to home
Summary: Consumer spending appears to be remaining surprisingly stable despite fluctuations in capital markets due to tariffs. Supply chains do not seem quite so stable, though. Companies are rapidly trying to adapt their sourcing strategies and will have varying levels of success. The circumstances are made more challenging by uncertainty over how policy will evolve. Either way, companies are trying to bring supply chains closer to home.
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Macro
U.S. consumer remains resilient
"The U.S. consumer remains a source of strength in the economy. That's true for almost any metric that we look at. The unemployment rate is low and stable. Job creation remains healthy, real wages are growing. Consumer debt servicing burdens remain stable near pre-pandemic levels...But on the whole, I'd say the U.S. consumer is in good shape." – Capital One Financial (COF 0.00%↑) CEO Richard Fairbank
"For now, the US domestic consumer continues to hang in there pretty nicely. So, I would anticipate the reasonable possibility for kind of a flattish year and visitor this year. And obviously, if the economy begins to trend out a little bit worse than what we're looking at right now, that may change. And if tariff sentiments become even more inflamed, that may change as well." – Bank of Hawaii (BOH 0.00%↑) CEO Peter Ho
Consumer spending has been consistent; no signs of pullback
"I think you see on the charts that we kind of showed in the earnings deck today, this narrative that the consumer is pulling back, we have not seen the consumer pull back for us. Sales have been consistent both on a weekly basis all the way throughout second week into April. So sales will be consistent, and we haven't seen any generational shifts, which we try to show in the chart. So the consumer is continuing to be resilient through this period of time." – Synchrony Financial (SYF 0.00%↑) CFO Brian Wenzel
But supply chains are showing tariff stress
"What I will emphasize, though, and I mentioned this in my earlier comments, following the April 2 announcement of tariffs, we have seen a significant slowdown in orders since that period. I think retailers for the most part are in latency mode. They're trying to understand where the trade discussions are going to go, how it's going to impact consumers. And so we saw some of this behavior during the pandemic." – Flexsteel Industries (FLXS 0.00%↑) CEO Derek Schmidt
Companies are rapidly trying to rework supply chains
"I met with the CEO of a US Auto Manufacturer, who is laser focused on increasing competitiveness in the face of tariffs. If they don't adapt their global supplier network fast enough, their costs will increase by up to $10,000 a vehicle. Unlike past disruptions in the global markets, supply chain AI agents now reconfigure business rules in real-time. Businesses reduce dependency on high tariff regions by reprioritizing tier two and three suppliers, while activating the certification of new vendors. This same conversation is happening across all industries as CEOs navigate this terrain." – ServiceNow (NOW 0.00%↑) CEO William McDermott
"The impact of tariffs on the energy business will be outsized since we source LFP battery cells from China. We are in the process of commissioning equipment for the local manufacturing of LFP battery cells in the U.S. However, the equipment which we have can only service a fraction of our total installed capacity. We've also been working on securing additional supply chain from non-China-based supplies but it will take time." – Tesla (TSLA 0.00%↑) Chief Accounting Officer Vaibhav Taneja
CEOs are uncertain about how to make investment decisions
"Most of the feedback that we're getting from the field is customers are reporting uncertainty as it relates to tariffs. And so that's just something that us and each one of our customers are having to deal with right now and how they make investment decisions. And ultimately, that's going to impact freight volumes." – Old Dominion Freight Line (ODFL 0.00%↑) CFO Adam Satterfield
"At this point, our customers are expressing more concern around cost impacts of tariffs and less concern regarding demand from their customers." – Knight-Swift Transportation (KNX 0.00%↑) CFO Adam Miller
Business sentiment has softened
"Beyond our financial results, customer sentiment took a step back as the market saw an increase in macroeconomic uncertainty." – Comerica (CMA 0.00%↑) CEO Curt Farmer
"I don’t care if you call it a recession or not, in this industry that’s a recession." SouthWest Airlines (LUV 0.00%↑) CEO Bob Jordan
Hiring cycles have lengthened
"Business confidence levels moderated during the quarter in response to heightened economic uncertainty over U.S. trade and other policy developments. Client and job seeker caution continues to elongate decision cycles and subdue hiring activity and new project starts." – Robert Half (RHI 0.00%↑) CFO Keith Waddell
Hopefully there will be a quick resolution
"I really believe this, my gut on this is it will be short, sharp, because there will be a policy outcome. That policy outcome could be very negative, or it could move on very quickly. And, I think it’s in control, right? We’re not waiting to see is COVID a disease that will rampage throughout the plan and have no solution. We sort of have people could call it off tomorrow if they wanted to, right, you go back almost with some shocks to the system. So it is a directed policy decision." – Moelis (MC 0.00%↑) CEO Kenneth Moelis
Maybe we could avoid a recession?
"And again, we're not projecting a recession. We don't feel that way. We feel like the economy is going to grow this year. And we feel like, we're in the right markets and lines of business to benefit from that growth, even if it's not what we've seen over the last year or two." – Comerica (CMA 0.00%↑) Chief Banking Officer Peter Sefzik
International
China remains in a slow recovery, with consumer demand subdued
"From a China perspective, the message hasn't changed. The market is still flat to down across our categories. We are making progress within that minus 15 quarter one; minus five quarter two; minus two quarter three. But I do believe that, again, recovery in China will take time and won't be a straight line." – The Procter & Gamble (PG 0.00%↑) CFO Andre Schulten
"Across the Zone, consumer sentiment remained subdued. This is particularly true in China. In that context, our organic growth in China was driven by sales phasing with a buildup of inventories, rather than by underlying consumption. Consumer demand remains broadly flat in the quarter." – Nestle S.A. ADR (NSRGY) CFO Anna Manz
European public investment momentum is building. €2T+ in new funding plans are underway.
"The first quarter marked an acceleration in funding commitments by European governments. What is new is the wake-up call for Europe, the German €1 trillion to €1.5 trillion investment plan and the €800 billion readiness program are just first steps...Europe is going to reinvest massively." – BNP Paribas SA (BNPQF) CEO Jean-Laurent Bonnafe
Canadian tourism shows early signs of softness amid tariff sentiment concerns
"Tourism, for the most part year-to-date, is hung in there pretty nicely. There are early indications that Canadian traffic, which is a meaningful component of our market, has been affected by the sentiment around the tariffs. Early to tell, but I think that that's not likely to go unscathed given all the chatter that's been out there, Jeff." – Bank of Hawaii (BOH 0.00%↑) CEO Peter Ho
Financials
Credit metrics are stable
"Consistent with prior quarters, persistent inflation and elevated rates pressured customer profitability, driving continued but expected normalization in criticized loans and notably, they remain well below historical levels. Non-performing loans remain well controlled and below our long-term average. The allowance for credit losses was down slightly due to lower loan balances, stable credit metrics and a relatively benign economic forecast at quarter end." – Comerica (CMA 0.00%↑) CFO Jim Herzog
Commercial real estate remains a headwind
"Part of our outlook actually includes commercial real estate not coming down as much as we thought it would 90 days ago. We still foresee it being a headwind, but I don’t think it’s maybe blowing as hard as it was 60 to 90 days ago. We’ve seen deal flow pick up in commercial real estate. I was really glad last year, we were one of the first banks to kind of get back to doing deals second quarter of last year, and I think that’s benefited us. So we’re seeing some opportunities." – Comerica (CMA 0.00%↑) Chief Banking Officer Peter Sefzik
Loan pipelines are growing, but loan growth is lagging
"It's a little bit interesting to see the pipeline go up, but not necessarily feel like we're going to see outstandings in the next quarter per se. But throughout the year, as it goes on, we feel like it's going to, I guess, you might say, get better with loan demand." – Comerica (CMA 0.00%↑) Chief Banking Officer Peter Sefzik
"I think there's a lot of conversations going on between developers and suppliers and contractors as they try and get a handle on the situation, but it's pretty fluid at this point. So, I think, we're going to just have to kind of see how things evolve. But at this point the deal -- the transactions we see are still moving forward...I mean, we're not seeing anything in particular right now, but I would note caution frankly. I mean, I think it was such an uncertain environment that we could see pipeline trends move pretty quickly here, certainly on the commercial side. So, we're hopeful that we can hang on to our current guidance, but I would note caution around that." – Bank of Hawaii (BOH 0.00%↑) CEO Peter Ho
M&A momentum was disrupted by tariffs
"...we finished the quarter with a very bullish point of view for 2025. However, the new wave of volatility introduced into the capital markets post-April 2 has definitely slowed M&A transaction activity. Although the scale and timeframe is hard to predict, we believe this is a temporary phenomenon and we are planning our business accordingly." – Moelis (MC 0.00%↑) CEO Kenneth Moelis
U.S. deals are more impacted than European ones, as Europe trades better post-tariff-shock
"Europe is an interesting market post-April 2. They’ve been less effective. They’re trading better. They don’t have some of the supply chain issues. So, I think transactions in Europe haven’t hiccupped as much. There are obviously less transactions to begin with, but they’re not directly in the line of fire right now, and there have been some indications that the economies in Europe are going to spend some capital and take some actions that I think could be actually positive for Europe. So, I’ll say, that’s a 3-week read. Remember, I’m reading the tea leaves while they’re still falling off the tree, I would say." – Moelis (MC 0.00%↑) CEO Kenneth Moelis
IPO activity remains up YoY, but volatility is delaying larger listings
"Well, first of all, we did have -- we had more IPO -- I think we've like doubled the number of IPOs in the first quarter as we had in the first quarter of last year. But it is still an environment where people are -- the larger deals in particular, where there were some companies that were really looking forward to coming out in the second quarter are now waiting." – Nasdaq (NDAQ 0.00%↑) CEO Adena Friedman
Consumer
Capital One observed a recent uptick in customer spending growth
"Spend trends were largely stable through the end of the first quarter. In recent weeks, we've started to see an uptick in spend growth per customer relative to this time last year across our consumer segments...Now some of this uptick is likely driven by the timing of the Easter holiday, which fell in April this year versus March last year. So we maybe should discount that a little bit. We've also seen a recent increase in retail spending, particularly electronics in the past few weeks. Maybe that's a pulling forward of purchases in light of the tariffs, we'll have to see over time. At the same time, we've seen some easing in the T&E growth and airfare in particular." – Capital One Financial (COF 0.00%↑) CEO Richard Fairbank
How much is due to a pull forward in demand ahead of tariffs?
"Prior to the formal announcement of tariffs, new vehicle sales were performing well, tracking approximately 5% up year-over-year, and the strong pace accelerated following the tariff announcement in late March, adding to our pace resulting in same-store new vehicle unit sales increase of 7% for the quarter from prior year. Premium Luxury increased 14%, Domestic 6% and Import increased 2%." – AutoNation (AN 0.00%↑) CEO Michael Manley
"Following the U.S. presidential election and the threat of additional tariffs, Asian producers have increased imports by over 30% year-over-year in the fourth quarter and February year-to-date this year. Essentially loading the U.S. industry." – Whirlpool (WHR 0.00%↑) CEO Marc Bitzer
"While it's early, when we look at industry data, there appears to be a bit of a pull forward in auto purchases likely as consumers are trying to get ahead of tariff impacts. And we continue to monitor our application and origination volumes. I think also there is some early indication that auction prices are increasing more than seasonal norms. All of this is very early, but that would be what we see right at the margin." – Capital One Financial (COF 0.00%↑) CEO Richard Fairbank
Others are seeing a gloomier picture
"So what we're seeing, I think, is a logical response from the consumer to pause. And that pause is reflected in retail traffic being down. It's also reflected in somewhat of channel shifting in the search for the best value shifting into online, shifting into big box retailers and shifting into the club channel in the US specifically." – The Procter & Gamble (PG 0.00%↑) CFO Andre Schulten
"Purchase volume at the platform level ranged from between down 1% and down 9% year-over-year, as customers generally remain selective in their discretionary spend and bigger ticket purchases, particularly in categories like furniture, dory, outdoor, dental and cosmetics." – Synchrony Financial (SYF 0.00%↑) CFO Brian Doubles
"Where we felt softness in particular as the quarter progressed was on the discretionary side of demand. That is also here not surprising because that's newly tied to consumer confidence. And as we all have seen, consumer confidence was taking a significantly hit kind of coming February, March. So the discretionary side of the demand is weak, has been weaker as we all know for last two years and the exit-rate of consumer confidence and discretionary demand end of Q1 was soft. Similar things probably will happen in Q2. So we're not -- that's why we said earlier market demands remain the same." – Whirlpool (WHR 0.00%↑) CEO Marc Bitzer
"Our dealers are reporting that the uncertainty of the macroeconomic environment and persistently high interest rates is causing a wait-and-see pattern in demand for large discretionary purchases." – Pool (POOL 0.00%↑) CEO Peter Arvan
Leisure travel is weakening
"So, what's kind of different about this environment is that if you have kind of any kind of macro weakness, usually it shows up in business first. And business travel is highly correlated with corporate earnings. Corporate earnings have held up. Business travel has held up. And so, we're pleased with that. It's the customer's discretionary travel that is really the crux of the slowdown." – Southwest Airlines Co. (LUV 0.00%↑) COO Andrew Watterson
"When we take a look at fourth quarter, a tremendous amount of momentum. You go into the first quarter, January kind of came in where we had anticipated, February look of solid. But really March and then continue into April changed considerably. So we're cautious about what we're looking at in terms of our forecast for the second quarter because there is so much uncertainty." – American Airlines Group (AAL 0.00%↑) CEO Robert Isom
Big ticket categories still pressured
"We've continued, however, to see pressure in our big ticket categories early in Q2. With Easter shifting and spring running roughly three weeks behind, as Curt mentioned, it's still difficult to parse whether consumer demand is delayed or fundamentally different this year." – Tractor Supply (TSCO 0.00%↑) CEO Hal Lawton
Growth has slowed
“All of that put together, means consumption levels are down in both Europe and the US. The US has been growing over the past 12 months around 3% in terms of value consumption. What we've read through February and March was closer to 1%. Similarly, European consumer has been at about 3% over the past 12 months. And again, that consumption level now is down to about 1%." – The Procter & Gamble (PG 0.00%↑) CFO Andre Schulten
Tariffs expected to impact margins in the coming quarters
"For Q2, we expect our cost of sales to be in the high 29% range as the mix benefit from Chipotle Honey Chicken will be more than offset by higher inflation across several items, the normalization of avocado prices and the impact of the newly enacted tariffs, including aluminum and the broad-based 10% tariff. We estimate these tariffs will ongoing impact of about 50 basis points, and due to inventory on hand, we anticipate a 20 basis point impact in Q2, which is included in our guidance. These estimates do not include any impact from the tariffs that were postponed or the 25% tariffs on Mexico and Canada since our imports fall under the U.S. MCA exemption." – Chipotle Mexican Grill (CMG 0.00%↑) CFO Adam Rymer
Technology
Big tech is full speed ahead on capacity expansion plans
"There continues to be significant interest and speculation about the data center expansion plans of AWS and other cloud providers, so I thought I’d share some of our thinking here. First and foremost, we continue to see strong demand for both Generative AI and foundational workloads on AWS...This is routine capacity management, and there haven’t been any recent fundamental changes in our expansion plans." – Amazon (AMZN 0.00%↑) AWS VP of Global Data Centers Kevin Miller
"With respect to CapEx, our reported CapEx in the first quarter was $17.2 billion primarily reflecting investment in our technical infrastructure, with the largest component being investment in servers, followed by data centers to support the growth of our business across Google Services, Google Cloud, and Google DeepMind...we're still planning to invest approximately $75 billion in CapEx this year. We do see a tremendous opportunity ahead of us across the organization, whether it's to support Google Services, Google Cloud, and Google DeepMind." – Alphabet (GOOG 0.00%↑) CFO Anat Ashkenazi
Data center and AI demand remains strong
"Data centers remain fundamental to all of it. AI adoption is spreading globally, data center demand remains robust and Vertiv is positioned extremely well to capitalize on these opportunities." – Vertiv (VRT 0.00%↑) Chairman David Cote
"The way to think about us as it relates to data centers is we're a service provider, not an owner. And we had a really good quarter with data centers... Turner & Townsend is a big project manager, the creation of new data centers. They have a lot of work going on. They have seen some pullback from some of the hyperscalers that we've all read about. But they're pretty much at capacity in terms of their ability to do that kind of work." – CBRE Group (CBRE 0.00%↑) CEO Bob Sulentic
"There continues to be strong demand for generative AI and our book of business stands at more than $6 billion inception-to-date, up more than $1 billion in the quarter" – IBM (IBM 0.00%↑) CEO Arvind Krishna
AI is now writing 30%+ of all code at Google
"Obviously, I had mentioned a few months ago in terms of how we are using AI for coding. We are continuing to make a lot of progress there in terms of people using coding suggestions. I think the last time I had said the number was like 25% of code that's checked in involves people accepting AI suggested solutions. That number is well over 30% now." – Alphabet (GOOG 0.00%↑) CEO Sundar Pichai
Waymo is now serving 250K+ paid rides weekly, 5x YoY
"Waymo is now safely serving over a quarter of a million paid passenger trips each week. That's up 5x from a year ago. This past quarter, Waymo opened up paid service in Silicon Valley. Through our partnership with Uber, we expanded in Austin and are preparing for our public launch in Atlanta later this summer. We recently announced Washington, DC, as a future ride-hailing city, going live in 2026 alongside Miami. Waymo continues progressing on two important capabilities for riders, airport access and freeway driving." – Alphabet (GOOG 0.00%↑) CEO Sundar Pichai
Tesla is aiming for 1 million Optimus units per year by 2030
"We expect to have thousands of Optimus robots working in Tesla factories by the end of this year beginning this fall. And we expect to see Optimus faster than any product, I think, in history to get to millions of units per year as soon as possible. I think we feel confident in getting to 1 million units per year in less than 5 years, maybe 4 years. So by 2030, I feel confident in predicting 1 million Optimus units per year. It might be 2029." – Tesla (TSLA 0.00%↑) Chairman Elon Musk
Industrials and Transport
Truck freight volumes are down 15% from 2021
"...when you look at our industry, we're down about 15% tonnage relative to 2021. And while GDP has been positive, I think that us and other carriers have felt the brunt of the overall volume environment being down. And so we've not seen anything that would change from a big picture standpoint. Obviously, this downturn has lasted a lot longer." – Old Dominion Freight Line (ODFL 0.00%↑) CFO Adam Satterfield
Tariff-driven uncertainty derailed March’s anticipated rebound in volumes
"We are expecting a nice seasonal volume rebound in March. However, toxic tariffs and the fluid trade policy spurred more cautious tone among shippers that brought a pause to the momentum in the market. The increased uncertainty among shippers and growing concern among consumers resulted in lower volumes and an absence of the typical seasonal build in March. This has also impacted current rate negotiations in the truckload bid season. We are still achieving increases in the low to mid-single digit percentage range. However, we are not seeing the increases build like we had originally anticipated the bid environment would play out." – Knight-Swift Transportation (KNX 0.00%↑) CFO Adam Miller
April volumes are stable so far, though
"With all that being said, during the first half of April, market conditions have largely been stable with where we exited the first quarter, but there is a wide range of possible path forward from here. There could be a low in volumes as shippers were to adjust supply chains or there could be a pull forward in anticipation of a return of reciprocal tariffs." – Knight-Swift Transportation (KNX 0.00%↑) CFO Adam Miller
"Now we started -- some of that could have just been pulling forward of freight and that helped boost the March numbers a bit. We did see a little bit of a drop off that first week of April, but it's come back pretty consistently with what we would expect since that time. So I've been pleased with our week-by-week trends. And hopefully, we'll see that continue on. ...While there are still several workdays that remain in April, our month-to-date revenue per day has decreased 7% on a year-over-year basis...We anticipate that our revenue per day for the full month of April will decrease approximately 6%, plus or minus 50 basis points." – Old Dominion Freight Line (ODFL 0.00%↑) CFO Adam Satterfield
Truck capacity exits have accelerated
"One of the data points we look at is there's a large load board company that provides detail of how many trucks are being posted on their load boards. And that's, I think, in March -- it's down 28% on a year-over-year basis in March. And so that tells us supply or capacity continues to exit. But I think it's still kind of hard to know what needs to happen for us to be back in balance. But certainly, the slowdown we're expecting to see in May is not going to help the small trucker." – Knight-Swift Transportation (KNX 0.00%↑) CFO Adam Miller
China-to-U.S. sea freight volumes are down 25–30%, but offset by rising Southeast Asia shipments
"...let's start with sea freight. Pretty much is overall as a slowdown of bookings out of China to the U.S. and the magnitude of, I would say, currently this week, next week of 25% to 30%. This is almost equalized by an uptick in the other Asian markets and other trade lanes. So, what we currently see is that everything what is missing out of China will be to a certain degree, maybe not 100% offset by other trade lanes. So, there is a clear shift into Southeast Asia. Whether it's 1:1 for the second quarter or there is a slight decrease in volumes, we cannot yet confirm, but the pattern shows that is almost equal and the volume will not collapse. This is what we can see from the first three weeks in April.... you see a lift and shift towards the other Asian markets and other Asian countries quite quickly in both in air and in sea. But if that is a long-term trend and if that can be subsidized completely, I cannot answer that question. It's far too early." – Kuehne + Nagel International AG (KHNGF) CEO Stefan Paul
China manufactures 70% of all drones. The US can't keep up.
"America cannot currently manufacture its own drones. Let that sink in, unfortunately. So China, I believe manufactures about 70% of all drones. And if you look at the total supply chain, China is almost 100% of drones are -- have a supply chain dependency on China. So China is in a very strong position." – Tesla (TSLA 0.00%↑) Chairman Elon Musk
China is aggressively investing in mainstream logic & memory
"The memory business in China was also strong in 2024 just as it was strong on a global basis. But also as many of you know, China is really investing to become a significant player in what we call mainstream logic. So the logic that you don't have at the cutting edge, not for AI, maybe not for the latest generation of smartphones, but the kind of stuff that you need for electrification of vehicles for instance." – ASML (ASML 0.00%↑) CFO Roger Dassen
Texas Instruments saw broad-based Q1 growth as industrial demand snapped back after extended decline
"The industrial market increased upper single digits after 7 consecutive quarters of sequential decline. The automotive market increased low single digits. Personal electronics declined mid-teens in line with typical seasonal trends. Enterprise Systems grew mid-single digits and Communications Equipment was up about 10%...What may be unique right now is that we are at the bottom of the semiconductor cycle, and customer inventories are at low levels across all end markets. So relative to where we are, history says, it is important to have capacity and inventory in times like this and we are well positioned." – Texas Instruments (TXN 0.00%↑) CEO Haviv Ilan
Elon Musk says Tesla isn't having a near-death sequel
"So at Tesla, we've gone through many a crisis over the years and actually been through many near-death experiences. I think we probably were in the edge of death at least on maybe a dozen times. It's been so many times. This is not one of those times. We're not on edge of death, not even close. So there are some challenges, and I expect that this year will be -- there'll probably be some unexpected bumps this year. I remain extremely optimistic about the future of the company." – Tesla (TSLA 0.00%↑) Chairman Elon Musk
Materials & Energy
Global electrification is entering a supercycle, with North American load growth strongest since WWII
"For perspective, we expect more than 450 gigawatts of cumulative demand for new generation between now and 2030 in the United States. To meet this demand, we believe it's important to exercise what I described as energy realism and energy pragmatism. Let me explain. Energy realism is about embracing all forms of energy solutions and understanding the demand for electricity in the United States is here now, and it's not slowing down. Frankly, it's unlike anything we've ever seen since the end of World War II." – Nextera Energy (NEE 0.00%↑) CEO John Ketchum
"We continue to see very strong end markets in Power and Electrification...To put today's investment super cycle into perspective in terms of energy needs and decarbonization, the scale of load growth we're seeing in North America is the most significant since the post-World War II industrial build-out. But unlike then, the growth is global, the most populous country in the world, India, nearly 1.5 billion people, derives 80% of its electricity from coal. Saudi Arabia, which relies on heavy oil for nearly half of its power has committed to a 50-50 mix of gas and renewables by 2030." – GE Vernova (GEV 0.00%↑) SVP Scott Strazik
"Let's talk more about beneficial load growth. We've updated our data center project pipeline from the year-end call. And as you can see, our pipeline has grown from 5.5 gigawatts to 8.7 gigawatts...We have 1.4 gigawatts in final engineering comprised of 18 projects. To-date, these have not been the mega data center project designed to power large language learning models. Rather, the demand in our service area has been mostly from customers looking to power inference models which are driving value for their businesses, true Goldilocks demand, big enough to matter, not so big that it's a problem." – PG&E (PCG 0.00%↑) CEO Patti Poppe
Natural gas plants will not be cheap to build. Renewables + storage wins on cost
"We expect 75 gigawatts of new gas to come online between now and 2030. That is significant for sure, but nowhere close to meeting the over 450 gigawatts of total generation we believe are needed. It's also important to understand that gas-fired plants will come online at a higher cost than renewables and storage. That's because gas turbines are in short supply and in high demand. It's also proving difficult to reestablish the highly skilled workforce required to build these complex power plants. Gas-fired combined cycle plants rely on approximately 1,000 workers across dozens of niche trades. We've learned EPCs are hiring thousands of extra people to address high washout rates with some workers leaving earlier for higher-paying jobs, building, for example, LNG terminals, data centers, semiconductor chip manufacturing facilities and other industrial facilities. Other workers are showing up to job sites without the necessary skills. All of this puts upward pressure on prices and the time to build gas plants. It's why the cost to build a gas-fired plant has tripled in the last few years and is poised to increase even further due to tariff exposure." – Nextera Energy (NEE 0.00%↑) CEO John Ketchum
Real Estate
Office demand is rebounding broadly across both primary and secondary markets
"What we have going on with office right now is two dynamics. One is a scarcity circumstance. And it's not just Park Avenue. It's all over the gateway markets and other big cities in second- and third-tier markets, companies realize that office space is important to them. They realize that there is somewhat of a return to the mean and that they're forcing that in some cases and it's happening on its own in some cases. And as a result, because there hasn't been much new office space created over the last few years for obvious reasons, the office space that's out there is in big demand. And the choppiness that we're now seeing in people's confidence about the economy is really not impacting their enthusiasm for leasing office space that much at this point." – CBRE Group (CBRE 0.00%↑) CEO Bob Sulentic
Spring selling season softer than expected amid choppy consumer confidence.
"...homebuilder sentiment waned somewhat as the quarter progressed, and prospective buyers turned more cautious in response to elevated uncertainty surrounding tariffs in the broader economy. This cautious sentiment continued into April as trade policy actions accelerated and markets experienced elevated volatility. Given these dynamics, the spring building season has gotten off to a softer start than we were expecting at the outset of 2025." – Weyerhaeuser (WY 0.00%↑) CEO Devin Stockfish
"As we begin 2025, it was clear to us that rate buydowns remain necessary for us to drive traffic and promote sales and that such rate buy downs would continue throughout the spring selling season unless and until it became clear that consistent and solid demand had returned. Clearly, that has not happened. Instead, what we have seen is the continuation of choppy and challenging conditions. While there has been some uptick in demand during the first quarter, the spring selling season has been just okay. Frankly, we graded somewhere between a B minus to C plus." – M/I Homes (MHO 0.00%↑) CEO Bob Schottenstein