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The Return of the Dry-Clean-Only Wardrobe

PARIS—With the frisson of a downturn in the air, designers at fashion week here better known for drama battened down the hatches, sending out streams of polished, functional blouses, jackets, skirts, pants and pumps.

Above all, however, they sent coats. Some highlights: strictly cut propositions at Givenchy and Alexander McQueen, luxe puffers at Schiaparelli, and today’s belted, no-tricks camel-coloured overcoats at Louis Vuitton. Liane Wiggins, head of womenswear at British retailer MatchesFashion, praised Paris Fashion Week’s notably beautiful coats in an interview and rated them the “number-one investment” for customers who, in a change from their usual habits, might be choosing between luxuries this year.

And those buying habits are indeed changing. At a dinner for his independent Vienna-based brand, Petar Petrov told me that his clients are no longer searching for the comfort-forward attire of post pandemic life. Instead, women are again craving silk dresses and blouses, things to be worn to appear soignée at work, dinner, on dates (and then dry-cleaned… unthinkable in 2020).

Button-up blouses, a neutral palette, androgynous coats—if it sounds familiar, that may be because Lydia Tár pretty much foretold the fall collections. Although Cate Blanchett’s problematic composer in the Oscar-nominated movie “Tár” was not exactly an aspirational figure, her impeccably tailored wardrobe resonated well beyond the film.

Ms. Wiggins said this season was all about “more tailoring, cleaner looks and what I always call ‘real clothing’—but with added value and details that mean you will have it in your wardrobe forever, and it won’t feel too trend-heavy.”

Here, five brands that made persuasive cases for “real clothing”:

Loewe: Where ‘innovation’ is not just a buzzword

Jonathan Anderson, the designer behind Spanish LVMH brand Loewe, is one of the rare designers who uses innovative techniques and materials to make clothing that is supremely wearable. Without last season’s dependence on surreal elements such as exaggerated anthurium-flower tops, the fall collection focuses on more realistic pieces, like long leather coats and proper trousers.

That realism was imbued with tireless experimentation—the kind that people who love clothing will want to pay for. The seemingly simple silk printed dresses were printed with faded images of dresses from decades past, giving the contemporary pieces a sense of history. Shearling coats were moulded into hourglass shapes. Cropped leather jackets and skirts were vacuum-stiffened into firmness.

Mr. Anderson also excels when he considers and updates familiar and functional pieces—like last season’s Barbour jackets, or this season’s work boot. The Loewe representative who took me around the showroom said that the house’s employees—both men and women—were all excited to wear fall’s comfortable work boot, with its large toe box and nubbly texture.

Balmain: An approachable elegance

In recent seasons, the Balmain show has been an over-the-top spectacle bringing together thousands in stadium-style shows, often with live music. Last season, a raised runway showcased nearly 100 looks, Cher sang and there was a hamburger stand. The styles—as befits a brand beloved by Beyoncé and the Kardashian sisters—prioritised drama, including wide hats and sculpted pieces in unorthodox fabrics like banana leaf. But the show was late and chaotic, and attendants complained (a Vogue reviewer bemoaned his soggy bottom).

So this season the brand swung back to basics, or as close to basics as Balmain gets. In an interview, creative director Olivier Rousteing stressed the importance of looking to the house’s founder Pierre Balmain’s “legacy, and the power of the distinctive tailoring, structure and spirit behind his ‘New French’ style.” The term “New French” was coined by Gertrude Stein’s partner Alice B. Toklas after seeing the brand’s first collection in 1945. It’s a moment—as crystallised by a famous Horst photograph of Stein with her poodle Basket and a Balmain model—that Mr. Rousteing referenced with this collection.

That resulted in a collection full of elegance, like jackets with nipped waists, capes, full skirts and reworked tuxedos. Many looks were worn with simple black velvet cropped pants, the kind of piece that could augment any wardrobe. One guest—74-year-old model Maye Musk (Elon’s mom)—nodded her head in approval.

The Row: Creature comforts, from cashmere to chocolate

The Row, the American design house founded by Mary-Kate and Ashley Olsen, has found a spiritual home in Paris, where it has an office. Like the Japanese brands Yohji Yamamoto and Issey Miyake, both of which show their collections in the French capital, the Row’s pure and formally inventive clothing makes sense when seen against the backdrop of Haussmannian moldings and herringbone floors.

This collection did not stray from the brand’s specialties: Lydia Tár-like suits, shirting and Serious Coats, spare evening wear, elbow-length gloves, flat boots perfect for city walking. But it felt particularly right in the context of a season of realistic, investment-grade fashion—as if the world synced up to the Row than vice versa.

At the show’s conclusion, young men proffered green juice, green tea, perfectly ripe pears and hunks of dark chocolate. Along with great knitwear and flat shoes, these are the keys to many women’s affection.

Balenciaga: A postscandal return to ‘the art of making clothes’

The most hotly anticipated show this season was Balenciaga’s, but not for the usual reasons. With a hint of schadenfreude, editors gossiped about how creative director Demna would react (or not) to the uproar around the brand’s recent campaigns that some interpreted as endorsing child pornography. Demna has apologised for featuring children in the campaign, and Balenciaga’s owner François Pinault last month said “we’re allowed to make mistakes in a group like Kering.”

In his show notes, Demna declared a return to the purity of design: “Fashion to me can no longer be about entertainment, but rather as the art of making clothes.” That manifested as elemental forms and silhouettes, starting with sweeping black lace dresses punctuated by crested shoulders. Blazers, denim jackets, overcoats and trenches were all oversize, dwarfing their wearers. Demna applied his contemporary touch to ladylike Balenciaga signatures like bows and florals.

But under the designer, Balenciaga has always been about far more than clothes. Stunt shows commenting on current events, a Simpsons collaboration and Kim Kardashian mummified in danger tape made it a part of the zeitgeist. Are clothes alone—even ones as thoughtful as this—enough?

Saint Laurent: A powerful vision of business-not-very-casual

When was the last time you saw someone wearing a proper skirt suit—outside of a retro movie or TV show? Chances are, you’re scratching your head, but if Anthony Vaccarello’s Saint Laurent show has anything to do with it, the skirt suit will be on the ascendant come fall.

The show’s vision of a powerful businesswoman—albeit one who still values comfort and sex appeal—began Paris Fashion Week with a slap of chicness. Some fashion obsessives on Twitter used the occasion to compare Mr. Vaccarello’s early work—characterised by micro party dresses and lots of leather—to his sophisticated forays of recent years. The brand has grown up with him.

Although the extreme shoulder of the blazers and the deep décolleté of the camisoles will not be for everyone, the pinstriped wool suit separates and blanket coats are future classics. And Ms. Wiggins of MatchesFashion pointed to the show’s organza blouses, with their dramatic streaming neck ties, as the perfect tops for a dinner date.

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Why the Recession Is Always Six Months Away

The next economic downturn has become the most anticipated recession in recent U.S. history. It also keeps getting postponed.

Recent strong hiring and consumer spending are the latest evidence that the pandemic and the unprecedented policy measures that followed are interfering with the Federal Reserve’s campaign to tame inflation.

The government’s stimulus measures left household and business finances in unusually strong shape. Shortages of materials and workers mean companies are still struggling to satisfy demand for rate-sensitive goods, such as homes and autos. And Americans are splurging on labor-intensive activities they avoided in recent years, including dining out, travel and live entertainment.

Wall Street economists began 2023 broadly anticipating a recession by mid-year caused by the weight of the Fed’s rapid interest-rate increases. Some still expect that could happen. Many now think it will take longer to cool the economy and will lead the central bank to raise rates to higher-than-expected levels.

“It’s the ‘Godot’ recession,” said Ray Farris, chief economist at Credit Suisse. Mr. Farris found himself among a small minority of economists last fall who predicted the economy would narrowly skirt a downturn this year. Every six months, economists have predicted a recession six months later, he said. “By the middle of the year, people will still be expecting a recession in six months’ time.”

The Fed has been trying to slow investment, spending and hiring to combat inflation by raising rates, which makes it more expensive to borrow and can push down the price of assets such as stocks and real estate. After holding the benchmark federal-funds rate near zero during and after the pandemic, officials lifted the rate more over the past 12 months than any time since the early 1980s, most recently to between 4.5% and 4.75% last month.

The economy’s recent pickup will delay Fed officials’ deliberations about when to pause rate increases. Investors are instead looking for clues about whether they will raise rates by a quarter-percentage-point, as they did last month, or a half-point, as they did in December, at their next meeting, March 21-22.

Fed Chair Jerome Powell is set to begin two days of congressional testimony Tuesday, where he’ll have an opportunity to explain the central bank’s most likely response to a more resilient economy. In December, most Fed officials expected to lift rates this year to between 5% and 5.5%, and officials have indicated those projections could rise at their next meeting.

The economy remains weird

Three factors illustrate the peculiar nature of today’s economic recovery.

First, Washington’s reaction to the initial shock of Covid-19 in March 2020, including holding interest rates at very low levels and showering the economy with cash, left household, business, and local government finances in unusually strong shape.

Through last June, U.S. households had around $1.7 trillion more in savings accumulated through mid-2021 than if income and spending had grown in line with the pre pandemic economy, according to estimates by Fed economists. Even after it is spent, money can still slosh through the economy (one person’s spending is, after all, someone else’s income).

“We are going through the second, third, and fourth-round effects of the initial savings spurred by all these transfer payments during the pandemic,” said Peter Berezin, chief global strategist at BCA Research in Montreal. Rate increases can slow the economy more immediately when expansions are fuelled by credit growth, as opposed to incomes and stimulus, the big drivers of the post-pandemic recovery.

Businesses were able to lock in lower borrowing costs as interest rates plumbed new lows in 2020 and 2021. Just 8% of junk bonds, or those issued by companies without investment-grade ratings, mature over the next two years, according to Goldman Sachs.

Secondly, shortages of materials and workers have made the rate-sensitive housing and auto markets more resilient to higher interest rates—for now. Home builders are resorting heavily to what’s known as buydowns, where they pay to lower the buyer’s mortgage rate for the first year or two. Many current owners are reluctant to sell because they’d have to give up a much lower rate, a phenomenon that is holding for-sale inventories at historically low levels.

Typically when the Fed raises interest rates, demand for housing and cars fall, leading builders and automakers to cut production and lay off workers. This time around, companies are still playing catch-up.

Construction employment hasn’t fallen despite a severe slump in home sales. Builders are still completing homes and apartments started before the Fed increased interest rates. Supply-chain disruptions have extended the amount of time it takes to complete construction. In addition, apartment building ramped up sharply after the pandemic, and those take longer to finish.

In the auto sector, brands of popular fuel-efficient cars are benefitting from pent-up demand after shortages of semiconductor chips kept inventories of new cars at very low levels.

That could make the usual rate-induced slowdown in autos and housing more gradual, said Eric Rosengren, who was president of the Federal Reserve Bank of Boston from 2007 until 2021. “It may take higher interest rates or interest rates higher for longer to get supply and demand back in alignment.”

Thirdly, U.S. consumers, throwing off their pandemic caution, have ramped up spending on services that require lots of workers—think dining out and travel—another example of pent-up demand interfering with the typical business and interest-rate cycle.

Those sectors are often among the first to see demand fall, prompting job cuts, when consumers worry about losing theirs. The easiest way for households to reduce their expenses is to stop eating out and taking vacations.

Consumer spending has enjoyed a rebound in recent months thanks to lower gasoline prices and an additional boost in January from bigger Social Security checks, which are indexed to prior-year inflation. Gas prices jumped last spring after Russia’s invasion of Ukraine. They then steadily declined over the second half last year, easing a cash-crunch for some households that may have offset higher rates on auto loans, credit cards, and mortgages, said economists at Morgan Stanley in a recent report.

Travel, live entertainment and eating out, such as at this Chili’s in Flower Mound, Texas, are booming. PHOTO: LAURA BUCKMAN FOR THE WALL STREET JOURNAL

Economists at Goldman Sachs said Sunday the Fed could end up raising rates to just below 6% this year if consumer spending runs at higher-than-anticipated levels. That could extend a string of quarter-point rate increases into September.

Labor market conundrum

The labor market sits at the centre of Mr. Powell’s worries about inflation. That’s because steady income growth will sustain consumer spending power and allow companies to keep raising prices.

In the 2000s, then-Fed Chairman Alan Greenspan called it a conundrum that longer-dated bond yields stubbornly refused to rise as the Fed increased rates. For Mr. Powell, the labor market’s strength represents his version of the conundrum. Recession calls keep getting delayed because companies keep hiring and holding on to workers rather than letting them go.

Employers added 517,000 jobs in January, a big figure that shocked economists who were anticipating a slowdown, and pushed the unemployment rate down to 3.4%, a 53-year low. Revisions to earlier reports also pointed to less weakness than initially thought.

The Labor Department’s report on February hiring, due for release Friday, will offer clues as to whether January’s was a one-off blip or a sign of an economy that’s accelerating. A separate report Wednesday could show whether workers continue to quit their jobs at historically high rates, which can indicate greater confidence in their ability to find new jobs with better pay.

Economists at Morgan Stanley estimate that staffing levels across the U.S. are still slightly below what would have been if the pandemic hadn’t hit. They expect that gap to close this year, which could lead hiring rates to slow.

M. Keith Waddell, chief executive of recruiting firm Robert Half International Inc., highlighted a disconnect between a resilient labor market and business surveys that point to signs of easing demand for workers. “Having said that, orders have not dried up,” he said on a Jan. 26 earnings call. “It’s just taking longer to get them closed. Our clients are less urgent. They’re taking more steps. They want to see more candidates.”

Fed officials are in a race to slow down the economy before inflation becomes entrenched. They are also trying to guard against raising rates too much and causing unnecessary economic pain.

Some Fed officials say it could take time to see the effects of their moves, because they had pursued such ultra-stimulative policies until a year ago. Because interest rates have only very recently reached levels that could be considered restrictive, “there is a plausible case to suggest that we’re going to see” more slowing to come, Atlanta Fed President Raphael Bostic told reporters last week.

Business owners report confidence about their own prospects but unease about the broader economic backdrop, said Mr. Bostic. “Everyone is wondering if and when the shoe will drop, but they’re all expecting it to drop for somebody else,” he said.

The need for speed

Uncertainty over when and how much the economy will slow is due in large part to Mr. Powell’s decision to raise interest rates rapidly. The Fed previously spaced out increases, such as in the periods 2004 to 2006 and 2015 to 2018, when lower inflation allowed officials to move more gradually.

The strategy appeared to work because it prevented households and businesses from expecting higher future inflation, which would have kicked off a destructive price spiral, said Kristin Forbes, a professor at the Massachusetts Institute of Technology and former member of the Bank of England’s monetary policy committee. Now, the downsides of that strategy are coming into view.

“If you front-load hikes, it makes it harder to tell whether you need to wait a little longer to see the effects, or whether the economy is just more resilient,” she said.

Officials slowed the pace of rises in December and again last month to have more time to study the effects of their past moves. Despite reports of hotter growth and inflation over the past month, Mr. Rosengren sees the slower rate-rise pace as appropriate. “You still are waiting for information about when the previous tightenings are going to have more of an impact,” he said. The timing of a recession “is impossible to predict, but the likelihood remains quite high,” he said.

Since October, the Fed has faced a challenge in which bond investors began to anticipate inflation would fall quickly without a serious downturn. As a result, they expected the Fed would cut rates sooner and faster than central bank officials said they anticipated.

That risked an unhelpful feedback loop for the Fed. While the central bank controls short-term interest rates, long-term rates are influenced by broader market conditions, and they ticked lower between October and February, leading borrowing costs to ease slightly. The 30-year fixed rate mortgage slid to around 6% from 7% last fall.

That has led to a perverse sequence where expectations that the economy will slump are holding down long-term rates, which can stimulate economic activity and make it harder for the economy to slump.

Long-term Treasury yields have since ticked up as investors become more concerned about inflation and stopped believing the Fed would cut rates anytime soon. A big question is whether the run-up in yields will be enough to shift the economy into the slower gear the Fed seeks.

“The Fed needs to get long-term yields high enough to slow the economy,” said Mr. Berezin. “There won’t be a recession until more people are convinced that there won’t be a recession.”

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Australian residential property market is on the up in capital cities

The property downturn in Australia may have turned a corner, information from data analytics company Neoval suggests, with capital city prices increasing by 1.9 percent since December.

Ray White chief economist Nerida Conisbee said while it’s unlikely increases will happen at the same pace that they did during the pandemic, the market appears to have stabilised, with Sydney leading the way. Neoval data showed Sydney prices have increased 2.7 percent, followed by Canberra and Melbourne, which both saw a 2.0 percent rise. Hobart and Brisbane prices went up by 1.8 percent, while Adelaide (1.4 percent), Perth (1.3 percent) and Darwin (1.1 percent) rounded out the capitals.

Ms Conisbee noted that the increases reflected different circumstances in each capital, making it harder to predict price movements going forward. While a resources boom in Perth and less sensitivity to interest rate rises in areas like Darwin may have contributed to higher prices, flooding in Brisbane last year will continue to put pressure on accessibility to trades in that city as homeowners try to rebuild. 

The impact of further interest rate rises and fixed rate home loans soon ending for a substantial number of borrowers across the country was also yet to be felt. The RBA is scheduled to meet tomorrow, with most experts predicting a further rate rise.

“If house prices do now show a continual increase from this point forward it highlights the complexity of property markets,” Ms Conisbee said. “House prices are very sensitive to interest rates and there is almost complete consensus that these will continue to increase for a bit longer.

“We also have a lot of loans coming off fixed rates and this is likely to make some investment properties less financially attractive. It will also mean that holding a vacant property such as a holiday home, less desirable. It is likely more properties will come to market.”

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Bars, Hotels and Restaurants Become the Economy’s Fastest-Growing Employers

Operators of hotels, bars and restaurants—hit hard as the Covid-19 pandemic took hold—are now among the country’s fastest-growing employers, offsetting a slowdown in tech-related hiring.

The leisure-and-hospitality industry is rebuilding its workforce after cutting back during the pandemic’s early days. In contrast, companies focused on providing business and tech-related services have slowed their growth in recent months.

Because the hospitality industry includes a larger number of private-sector jobs than the tech and information sectors, the shift in hiring patterns has helped keep the U.S. unemployment rate at a 53-year low and the overall job market tight.

Here is a look at how hiring patterns have shifted in recent years.

Since November, about half of job-cut announcements among U.S.-based employers have come from tech companies, according to outplacement firm Challenger, Gray & Christmas.

The cuts partially reverse some of the hiring made during the height of the pandemic, when lockdowns led to increased demand for tech products and services.

Payrolls grew faster at most companies in the S&P 500’s technology and consumer-discretionary sectors during the first two years of the pandemic than during the preceding two-year period, according to a Wall Street Journal analysis of FactSet data.

Factors such as a return to prepandemic consumer habits, rising interest rates and fears of an economic downturn have prompted some companies to recalibrate their head counts.

Amazon.com Inc., for example, nearly doubled its workforce amid increased demand for its e-commerce, grocery and cloud-computing businesses. The company grew to more than 1.5 million employees at the end of last year from about 800,000 at the end of 2019, FactSet data show. Amazon recently announced layoffs totalling more than 18,000 staffers.

The tech layoffs might not be affecting the broader employment data for other reasons. Job-cut announcements don’t always shrink company workforces as much as promised. Business can improve, vacant jobs can go unfilled and layoffs can sometimes take months to execute.

Hiring also remains strong among some of the country’s biggest companies. Chipotle Mexican Grill Inc. said in January that the restaurant chain plans to hire 15,000 workers in the U.S. ahead of an expected increase in demand. Some food businesses—such as Kroger Co., the largest U.S. supermarket operator by sales—are recruiting former employees to fill staffing gaps.

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The Surprising Ways Walking Delivers a High-Intensity Workout

Intensifying your fitness routine could come from the simplest change possible: how you put one foot in front of the other.

Walking with more intensity can burn as many calories as higher-impact activities such as running or even HIIT classes, experts say. That could mean incorporating weights, hills, intervals or a faster pace without breaking into a jog.

Reba Dodge always thought she needed to spend money on trendy workouts from spin to hot yoga to get fit. But the Maui, Hawaii-based floral designer and mother of two says she gets the best results from walking.

Over the past eight years, Ms. Dodge, 46, has experimented with ways to turn her daily fitness walk into a serious workout, including walking up a steep hill near her home, walking backwards and carrying 2-pound hand weights.

“The weights force me to engage my core more,” she says. “I’m even considering buying a weighted vest.”

Walking as a workout can provide stress relief and improve heart health. It is also one of the easiest ways to achieve the weekly physical activity—150 to 300 minutes of moderate activity or 75 to 150 minutes of vigorous activity—recommended by the World Health Organization.

“Lack of time is the number-one excuse people give for not getting enough physical activity,” says Thomas Allison, director of the Sports Cardiology Clinic at Mayo Clinic in Rochester, Minn.

He recommends people focus on the quality versus the quantity of their steps. The latest science suggests that we don’t need to take 10,000 steps a day (about 4 to 5 miles) for improved health or longevity.

Taking an 11-minute brisk walk daily will also lower your risk of stroke, heart disease and a number of cancers, according to a study from the University of Cambridge published in February.

Faster tempo

Speed up those steps and research suggests you can boost longevity. Plus, you can get the same—if not greater—calorie burn on a 20-minute walk where you incorporate intervals at a brisk pace as you would from a 40-minute walk at a leisurely pace, Dr. Allison says.

Katie Breden, 42, tries to always keep a pair of sneakers in her car. The mother of two grade-school-aged boys likes to have a backup plan for when she can’t fit in her Peloton workout. She will briskly walk laps around the field during their hourlong sports practices, or walk the perimeter of the park while they play.

“So many parents sit on the bench on their phones,” says Ms. Breden, a pre-K teacher based in Point Pleasant, N.J. “This is an easy way to squeeze in a workout, and I don’t get as sweaty as I would running or spinning, so I can go on with my day.”

Get moving

Scoring fitness gains from walking can be as easy as putting a little extra spring in your step. A study published in the British Medical Journal in December found that the lurching “silly walk” made famous in the British TV show “Monty Python’s Flying Circus” increased energy expenditure in adults by about 2.5 times compared with their usual walking style.

The researchers don’t expect people to start walking down the street high-kicking like John Cleese’s character, Mr. Teabag, says Glenn Gaesser, one of the study’s co-authors. He just hopes the study shows that you don’t need to spend a ton of money or time to burn more calories. Tiny changes in your routine can add up, especially when one is just getting back into shape.

“Upping the energy expenditure of your current movement or activity by taking higher steps a few times throughout the day can raise your metabolic rate,” says Dr. Gaesser, a professor at Arizona State University’s College of Health Solutions.

But for those looking to lose weight: Along with making healthy diet choices, you need to increase the intensity of your exercise. If jogging or running is uncomfortable on your joints, Dr. Allison suggests power walking, where you swing your arms, and race walking, where one foot remains in contact with the ground at all times.

Head for the hills

Incorporating hills into your walking routine is a low-impact way to challenge the muscles and heart more, says Abrea Wooten, senior national education manager for gym company Life Time Inc. Ms. Wooten walks uphill wearing a weighted vest on a treadmill to help train for ultramarathons. “It’s so much gentler on my joints,” she says. “The incline puts less stress on the knees.”

Treadmill walking got a huge boost of cool when social-media personality Lauren Giraldo’s 12-3-30 workout went viral on TikTok in 2020. The influencer says the workout, which involves walking on a treadmill for 30 minutes at the speed of 3 miles an hour on a 12% incline, helped her lose 30 pounds.

Ms. Wooten estimates that you can burn three to five times more calories a minute walking at an incline because of the extra work your quads and hamstrings put in. She advises gradually ramping up on the treadmill rather than jumping straight to a 12% incline. Start at 0.5% or 1% and add 1% to 2% every week.

Maintaining proper form is also important to get the most benefit and avoid injury. “If you need to hold on to the front rail of the treadmill, you should have slightly bent arms and keep your posture tall,” she says. “If you’re holding on for dear life and leaning back with straight arms, you need to ramp down the incline and pace.”

Leaning back disengages the core muscles, she says. Ideally you will find a pace that allows you to pump your arms.

Ms. Wooten suggests mixing up the types of walking you do every few months to keep the body challenged. On vacation, walk on the beach where the uneven sand works your stabilising muscles. Find a new route in your neighbourhood with rolling hills.

“Low-impact exercise does not have to be low-intensity,” she says.

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Make your mark with this exceptional Norwest business site

It takes a certain kind of business to be ready for a site like this. With four executive offices, a boardroom, eight partitioned offices and a large open plan space ideal for workstations, this site at 705-707/12 Century Circuit Norwest ticks all the boxes for a business on the way up.

But it’s so much more than that.

With views overlooking the lake and local district, and a rooftop garden ideal for hosting clients or celebrating company events, it’s the kind of location that has the potential to place a business on the map. The light-filled spaces are offered on three separate strata titles, providing the option of leasing or selling what might be surplus to need. Alternatively, take all three and enjoy exclusive naming rights on the building. Zoned and temperature controlled reverse cycle air conditioning ensures thermal comfort all year round, while 26 security basement carpark spaces on title offer maximum convenience to staff and clients. 

The site is being offered as is, with a quality fit-out and high end furniture included. 

Located in the heart of Norwest, this exceptional office site offers immediate access to cafes, restaurants and Norwest Shopping Centre, as well as services such as bus and train stations, banks and child care.

Address: 705-707/12 Century Circuit Norwest

Inspection: By appointment only

For more information on this rare opportunity, contact Lebba Khater at Blueprint Property 0411 590 189 lebba@blueprintproperty.com.au

 

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Homestead living without leaving the city

If there’s anything we’ve learned from the past few years, it’s how to balance connection and seclusion.

This property at 14 Lancewood Drive, Dural in the heart of Sydney’s Hills District offers the best of both worlds. Surrounded by lush bushland, the 2.02ha site includes a gracious four-bedroom home, a classic rectangular pool with purpose-built pool house, as well as two separate outbuildings and lock-up double garage, all set in beautifully maintained gardens.

Indeed, there’s not much reason to leave home, with easy access to a spacious north-facing open plan living area, as well as a generous separate drawing room with bay window. There’s something of the homestead feel about this property, with the ground floor bedrooms all opening onto the wraparound verandas offering ample outdoor living space, as well as providing thermal comfort to the interior spaces. A separate study with French doors onto the veranda will appeal to those who have adopted the hybrid working model.

On the upper floor, it’s the ultimate parents’ retreat with a large corner bedroom leading onto a full ensuite and spacious walk-in robe. The perfect hideaway, the bedrooms also leads onto a separate library which, in turn, leads onto a media room.

Ideal for quiet nights in front of the stone fireplace or for hosting a crowd of family and friends, this property is the getaway you can enjoy without leaving the city.

Address: 14 Lancewood Drive, Dural

Price guide: On request

Inspection: By appointment

Agent: Elise Lau, McGrath Real Estate, Castle Hill 0414 548 130

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Art Market Appears on Strong, if Cautious, Footing After London Sales

Major auctions in London this week are proving the art market is in solid health at the start of 2023, yet high interest rates and inflation in addition to the war in Ukraine continue to keep enthusiasm in check.

Overall, more than 90% of the lots were sold at combined evening sales of modern, contemporary, and ultra-contemporary work at Christie’s and Sotheby’s, while Phillips evening sale was 100% sold. Those are unquestionably good results.

But there are signs throughout the market that consignors and collectors are holding back a bit, says Drew Watson, head of art services at Bank of America Private Bank.

“The sales were fairly solid, but there was kind of a lack of major headliners,” Watson says. “We’re seeing some increased conservatism among the collector base. There’s more of an emphasis on people looking at established categories like modern masters, blue-chip post-war, [and] Surrealism.”

A dedicated evening sale at Christie’s focused on Surrealism did well, for instance, realizing nearly £39 million (nearly US$47 million) with 30 of 32 lots sold. Sotheby’s will hold a dedicated Surrealist sale on March 15 in Paris.

But works by young contemporary, often female, artists continued to attract interest all week. At Phillips, “it was the cutting-edge woman artists who stole the show this evening,” Olivia Thornton, head of 20th-century and contemporary art, Europe, said at a news conference following an evening sale on Thursday.

Most notable among these artists at Phillips was Caroline Walker, whose large-scale work Threshold, painted in 2014, generated consistent back-and-forth volleying for more than 11 minutes. It eventually sold to a bidder in the sale room for a hammer price of £730,000, £927,100 with fees—a record for the artist.

Other records were achieved by Sarah Ball, whose Elliot, sold for £120,600, with fees, above an £80,000 high estimate, and by Angela Heisch, whose Egg White Blue sold for £76,200, above a £30,000 high estimate.

The results followed strong bidding for female artists at Christie’s earlier in the week, which included the previously minted record for Walker of £693,000 for The Puppeteer. Cristina Banban’s La Fatiga Que Me das (You Exhaust me) also achieved a record, selling for £163,800, above a high estimate of £70,000, and Michaela Yearwood-Dan’s Love me nots achieved £730,800, far above a £60,000 high estimate.

But also at Phillips, a dynamic canvas by Gerhard Richter offered by French collector Marcel Brient for between £10 million and £15 million, was withdrawn at the last minute. Although the work “generated interest from collectors,” it was not at a level that met Brient’s expectations, and so he “was not prepared to let it go,” Cheyenne Westphal, Phillips chairman, said at a press briefing after the sale.

The absence of the Richter resulted in a dramatically different overall auction total of £20.3 million for Phillips. The revised estimate for the 23 remaining works was between £15.8 million and £22.2 million.

Another work offered by Brient, an untitled late work by Willem de Kooning from 1984, sold for a hammer price of £5 million, £6 million with fees, below the presale low estimate of £7 million.

While the froth may be out of the market at the moment, there is some cautious optimism of the future, with a handful of single-owner collections anticipated for May. Already announced at Sotheby’s is a group of works to be offered by Jan Shrem and Maria Manetti Shrem of San Francisco, including a major work by Pablo Piccaso, in addition to the Erving and Joyce Wolf Family Collection of decorative and fine arts. Christie’s, meanwhile, will be selling 16 modern and post-war paintings from the collection of S.I. Newhouse that could realise more than US$144 million.

“We’re only going to see more as we get closer to those sales,” Watson says. It’s a sign, he adds, of “cautious optimism for the higher end of the market in New York.”

Buyers, however, remain more conservative, as was evident with some of the major works offered this week, such as Lucian Freud’s portrait, Ib Reading, 1997, which sold for £17 million, within expectations, at Sotheby’s. They are willing to buy, but at the right price.

“Buyers are pretty savvy, especially at the high end, and will kind of expect a bit of a discount” considering current macroeconomic and geopolitical conditions, Watson says. As a result, auction houses will need to be disciplined in how they price works. “It’s not really a market where you want to push estimates,” he says.

One notable shift this week was renewed active bidding from buyers in Asia, Watson says.

At Christie’s, a bidding war between collectors in Japan and Singapore for a painting by Shara Hughes, Rough Terrain, ended in the hands of the collector from Singapore who placed a bid of £500,000, well above the £300,000 high estimate. Overall, 13% of bidders were from Asia during Christie’s evening sale of 20th- and 21st-century art and a separate sale of Surrealist works.

Sotheby’s, meanwhile, credited “deep bidding” from Asia for driving results at its evening sales, with several of these collectors noted as the “underbidder.” Over half the lots in Sotheby’s The Now sale of ultra-contemporary works received bids from Asia, while Asian buyers secured Barbara Kruger’s Untitled (Out of your mind… In your face), 1989, which realised £889,000, above a high estimate, and Andy Warhol’s portrait of Debbie Harry, which realized £6.9 million, also above a high estimate, after spirited bidding in both instances.

An Asian buyer also bought Richter’s Abstraktes Bild, 1986, at Sotheby’s, in another active bidding round. The final price, with fees, was £24.2 million.

At Phillips, the last two lots attracted several online bids from China, although the paintings—Ball’s Elliot, and Danica Lundy’s Bonefire—went to a collector bidding via a specialist on the phone and to a Canadian online bidder, respectively.

Whether the results in London portend the future for the art market this year remains to be seen. It may be best at this point to consider a post-sale press conference comment from Phillips CEO Stephen Brooks, who said, “It’s difficult to draw conclusions from one week of sales.”

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IKEA’s Latest Climate Target: Glue

Swedish furniture brand IKEA is switching to a new glue to help meet its climate goals, underscoring how small changes can make a measurable impact.

Inter IKEA—which owns the IKEA brand, develops its products and manages its supply chain—said around 5% of its value chain’s carbon footprint comes from fossil-based glue in its particle-and-fiber boards, used in products such as cupboards, wardrobes and shelves. It said Wednesday that it is aiming to eliminate 40% of its fossil-based glue in the boards by fiscal 2030, which could cut its greenhouse-gas emissions by 1.5 percentage points, depending on future business growth.

A factory in Kazlu Ruda, Lithuania will be the first to use a biobased glue made from corn in industrial plants rather than the food chain. IKEA is also trialing other biobased glues. The changes are part of IKEA’s efforts to meet its goal to use only renewable or recycled materials by fiscal 2030.

“It’s not an easy transformation. We are talking about the industry using the same glues for 60 years and that glue has been optimized for performance and cost for 60 years,” said Venla Hemmilä, material and technology engineer at IKEA of Sweden.

IKEA began searching for alternatives to fossil-based glue more than a decade ago, but found lower carbon, biobasedoptions were too expensive and the industry wasn’t well prepared to supplythem. Today, there is still a premium for biobased glues but it isn’t expected to be passed onto shoppers and should come down as production scales up.

The company expects biomaterials to become more cost competitive with fossil-based materials in the coming years. IKEA hopes its manufacturing footprint will accelerate that cost reduction of greener alternatives and that other companies will follow its lead. It declined to provide the names of the green glue suppliers for competitive reasons.

Glue became a focus for the group after 2016. That year IKEA examined how its climate goals aligned with the Paris Agreement and charted how they could expand the business while cutting their emissions, said Andreas Rangel Ahrens, head of climate at Inter IKEA Group.

“It is so easy to set goals, but how do you actually understand the impact and what to drive?,” Mr. Rangel Ahrens said.

To address that challenge, Mr. Rangel Ahrens said IKEA carried out a breakdown analysis of the sources of its carbon footprint, including production, materials and food. It also enlisted consultants to conduct life-cycle assessments of certain materials. In the 2022 financial year, IKEA said 52% of its emissions came from the materials in its products, the next highest contribution was 14% from people using its products at home, followed by production, which was responsible for around 8%.

Companies often use spending metrics, such as purchased goods, to calculate the carbon footprint of their materials. Instead, Mr. Rangel Ahrens said IKEA uses weight because it allows them to measure changes in a material, such as recycled and renewable content.

For example, when IKEA looked at its particle-and-fiber boards, it estimated the emissions coming from transport, forestry and energy, among other areas. It discovered around half of the material’s emissions were from the glue used to bind the wood chips and fibers together, meaning that fossil-based glue was responsible for about 5% of IKEA’s carbon footprint, Mr. Rangel Ahrens said.

This detailed approach to break down a product’s footprint allows sustainability teams to identify specific areas for other parts of the business to work on. “We are not just telling them you should reduce emissions from suppliers by 80% and go fish,” Mr. Rangel Ahrens said. We tell them where to focus and then they actually know what to do rather than just getting a very ambitious goal dropped on their laps, he said.

The company has also reduced emissionswith other targeted changes, including plant-based meatballs, a bookcase that uses paper foil instead of veneer, and switching to LED lightbulbs. It is also exploring how to add biobased content into coatings.

“It’s very important for us that sustainability is not a luxury for the few. It needs to be available also for people with thin wallets,” Mr. Rangel Ahrens said.

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Natural disasters are changing attitudes to long term property values

Flooding is beginning to have long term effects on property values, a new report from CoreLogic reveals.

The East Coast Floods – One Year One report examined the impacts of the extreme weather events on the Richmond-Tweed area (also known as the Northern Rivers region) on the far north coast of NSW, as well as the Brisbane region in early 2022, which some described as a ‘rain bomb’.

The report, authored by Corelogic economist Kaytlin Ezzy, said while residential values were historically fairly resilient following flooding events, recovering within three to five years, the 2022 disaster had changed perceptions among homeowners and potential buyers.

“Attitudes towards flood-prone areas, and climate risk in general, are changing,” the report said. “Homeowners, lenders and insurers are becoming more cautious of the risks associated with climate change and are adjusting their risk premiums accordingly. For some impacted homeowners, the risk of another flood is likely to be top of mind, and we could see a number of residents accept government buy-back offers where they are available. 

“For others, the increased costs of insurance could price out existing owners and dissuade new buyers from areas vulnerable to flooding.”

The report noted that while the Insurance Council of Australia had closed 80 percent of claims from the events, which are estimated to have cost $5.7 billion – Australia’s most expensive natural disaster on record – that was only part of the story.

“A sizable number of people are still waiting for building repairs to start, while other uninsured residents have been left with limited resources to undertake repairs,” the report said. “Government intentions around buy backs are still playing out and the number of post flood home sales is still low. 

“The full impact of the floods won’t be known until these factors have played out.”

Using satellite imagery, CoreLogic has zeroed in on areas most affected by floods. Perhaps unsurprisingly, flood-prone areas such as South Lismore and North Lismore recorded flooding across 80.8 percent and 70.1 percent of properties respectively. The news was similarly grim in West Ballina, where 56 percent of properties were impacted.

However, areas considered low risk, such as Girards Hill (35.1 percent) and East Lismore (22.4 percent) were also heavily affected.

In the Byron Bay region, Mullumbimby experienced the highest numbers, with 17.4 percent of properties impacted by flooding.

The impact on values has been immediate, and not just in those areas directly affected by floods, CoreLogic data reveals.

“Mullumbimby recorded the largest 12-month decline nationally, down -30.1 percent, roughly equivalent to a $432,000 decline in the median value, followed by South Lismore (-27.0 percent), Ocean Shores (-26.8 percent) and Byron Bay (-25.4 percent). The other impacted suburbs saw values fall between -22 percent and -25 percent,” the report said. 

“Interestingly, a number of suburbs that were relatively unimpacted by flooding also recorded significant declines. Values across Bangalow, Lismore Heights and Suffolk Park fell by -28.4 percent, -25.7 percent, and -24.3 percent, respectively, and East Ballina and Alstonville recorded slightly smaller declines of -20.2 percent and -19.6 percent.” 

While it noted that reduced economic activity across the whole region was a likely contributing factor, the report said that the decline had been less in Lismore’s elevated suburbs of Goonellabah which recorded a milder -7.2 percent drop in values, as well as a number of surrounding farming communities where declines were less severe. 

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Germany, Italy Signal They Could Block EU Combustion-Engine Ban

A group of large European Union countries is threatening to block a plan by Brussels to effectively ban the internal combustion engine, endangering the bloc’s ambitious agenda to combat climate change.

Germany and Italy said this week they could block the plan’s formal approval at crucial meetings this week and next. Berlin said it would oppose the plan unless Brussels agrees to allow so-called synthetic fuels that can burn like gasoline and diesel but spew fewer climate-damaging emissions alongside fully electric vehicles.

Under the leadership of the European Commission, the EU’s executive body, Europe has adopted an ambitious plan to fight climate-change-causing greenhouse-gas emissions. The plan relies heavily on the mass adoption of electric vehicles and effectively bans new combustion-engine vehicles from 2035.

Parts of the auto industry, which employs 3.4 million people in the EU—nearly 12% of all manufacturing jobs—have pushed back, arguing that including so-called e-fuels into the plan would allow emission targets to be hit while stretching the costly move away from combustion engines over decades.

Some governments have expressed sympathy with the demand as the move to electric vehicles, which are less complex to produce than their combustion rivals, threatens large numbers of jobs in the region.

Under a compromise reached last October, lawmakers agreed that the European Commission could put forward additional rules allowing new vehicles with engines that use carbon-neutral fuels to continue to be sold, but it has yet to do so.

German Transport Minister Volker Wissing on Tuesday said Berlin now wanted Brussels to present this legislation ahead of the plan’s approval, saying that because it had yet to do so, “the German government cannot approve the compromise.”

Italy’s Environment Ministry said that environmental targets should be pursued in a way that avoids harming jobs and production and that electric vehicles shouldn’t be seen as the only route to zero emissions.

Two other countries have also pushed back on the legislation. Poland has informed other member states it plans to vote against the plan, and Bulgaria has indicated it plans to abstain, four EU diplomats said. Poland’s government has previously said that such a ban would restrict consumer choice and lead to higher costs. By acting together, those countries have enough votes to block the plan’s approval.

A spokesman for the commission said it is up to the commission’s political leadership to determine what legislation to propose and when to do so. “The transition to zero-emissions vehicles is absolutely necessary” to meet the bloc’s climate targets, he said.

The European car sector and countries that have begun investing heavily in e-fuel development have spearheaded the effort against the provision in the commission’s plan stating that vehicles should be emissions-free by 2035—a de facto combustion-engine ban.

Germany, home to the region’s largest car makers, said this week that it would soon approve the use of synthetic fuels in the country, a move that would force Brussels to either follow suit or challenge the German law.

German auto makers, including Volkswagen AG, Mercedes-Benz Group AG, Porsche AG and Bayerische Motoren Werke AG, have pushed for the use of synthetic fuels to be allowed.

“I’m in favor of intelligent solutions rather than blanket bans,” VW CEO Oliver Blume was quoted as saying in the weekly Welt am Sonntag newspaper in January, adding: “E-fuels are a sensible addition to electric mobility.”

The shift to electric cars is beginning to affect auto-industry employment, raising concerns among politicians that the transition could be moving too fast.

Stellantis NV, which includes Italian auto maker Fiat, this week announced it would cut 2,000 jobs in Italy. Ford Motor Co. recently said it would shed about 3,800 jobs in Germany and the U.K., or around 11% of its European workforce, because fewer employees were needed as the company shifted to electric vehicles.

Meanwhile, Carlos Tavares, chief executive of Stellantis NV, whose brands include Fiat, Peugeot, Jeep and Chrysler, warned on an earnings call with reporters last month that the industry may be getting ahead of its customers.

“I don’t know if people will adapt to a new lifestyle as fast as the car companies have adapted to a new technology,” he said.

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New York Remains the World’s Top Super-Luxury Property Market

New York retained its title as the world’s top super-luxury housing market last year—though it had to share the laurels with London, according to the latest index from Knight Frank.

Both cities registered 43 sales of $25 million or more. In London, that marked a 26% increase from 2021; while New York’s figure was down 35% from the prior year.

“Despite rising economic headwinds and growing uncertainty, the world’s wealthy have been committing to luxury residential property, with London and New York the standout cities in demand for ultra-prime sales,” Liam Bailey, global head of research at Knight Frank, said in the report released Wednesday.

Claiming the third spot was Los Angeles, with 39 sales priced at $25 million or above. It was followed by Hong Kong, with 28 ultra-prime sales, even during a tumultuous year for its housing market; and Miami, with 23.

Not surprisingly, these cities also had the most $10 million-plus sales in 2022. New York topped the list with 244 sales at this price point, Los Angeles and London had 225 and 223, respectively, according to the report.

Across the top 10 cities—which also included Singapore; Palm Beach, Florida; Geneva; Sydney; and Paris—there were a total of 1,392 sales at or above $10 million, a decline from the record 2,076 transactions at this level recorded in 2021, but up 49% from pre-Covid 2019.

Of the 100 prime property markets tracked by Knight Frank, 85 recorded positive or flat price growth in 2022. Dubai led the pack with a staggering 44.2% annual growth rate, boosted by its visa incentives that have attracted many ultra-high-net-worth buyers, Knight Frank said.

Other prime markets that saw surging home prices included Aspen, with a 27.6% increase year over year; Riyadh, capital city of Saudi Arabia, with a 25% annual growth rate; Tokyo, with 22.8%; and Miami, with 21.6%.

Markets that had some of the strongest growth during the pandemic recorded the deepest price declines in 2022, which included the New Zealand cities of Wellington (-24%) and Auckland (-19%); Stockholm (-8%); Vancouver (-7%); and Seoul (-5%), according to the report.

Overall, the Knight Frank Prime International Residential Index rose 5.2% on an annual basis in 2022, the highest growth rate since the global financial crisis excluding the record year of 2021.

“Wealth preservation, safe-haven capital flight and supply constraints played their part in driving prime price growth, but it was the post-pandemic surge that continued to push prices higher,” Kate Everett-Allen, partner of residential research at Knight Frank, said in the report.

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The year of investing wisely

Experienced investors are adopting a ‘wait and see’ approach for the start of the year, a new report on investment intentions in the Asia Pacific region reveals.

The 2023 Asia Pacific Investor Intentions Survey released by global real estate and investment firm CBRE this week examined responses from more than 500 investors across the region.

It found that while the fundraising market remained ‘healthy’, many were taking a back seat as lower yields and the impacts of interest rate hikes played out.

Although industrial and logistic real estate assets proved to be the most popular options, there was growing interest in the residential sector for built-to-rent and multifamily properties. Multifamily properties are where there are several separate dwellings on the same site, such as duplexes, townhouses or apartments.

Weekend auction activity in Sydney last weekend bore out this trend, with fierce bidding for a block of four two-bedroom Art Deco units in Clovelly. Selling agent Theo Karangis of NG Farah said there was strong interest from families looking to buy the whole block on behalf of their children. It eventually went under the hammer for $5.05m.

The CBRE survey also revealed that properties in the healthcare sector are proving desirable in the Asia Pacific, overtaking data centres, although available stock remains low.

The outlook for 2023 remains positive, the report found, with investors keeping a close an eye distressed opportunities and price dislocations.

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America Is Trying to Electrify. There Aren’t Enough Electricians.

Electricians, the essential workers in the transition to renewable energy, are in increasingly short supply. They are needed to install the electric-car chargers, heat pumps and other gear deemed essential to address climate change.

Electricians say they are booked several months out and struggling to find enough workers to keep up with demand. Many are raising wages and prices and worried that they won’t be able to keep up as government climate incentives kick in.

“I’m tired of telling people I can’t help them,” said Brian LaMorte, co-owner of LaMorte Electric Heating and Cooling in Ithaca, N.Y., which does residential heat-pump installations and electric-service upgrades. His six-person company is booked roughly six months out, so he has been referring potential new customers to other firms in the area.

The 48-year-old brought on two apprentices last year and has seen the price of an average job rise to roughly $20,000 from about $16,000 two years ago due to rising raw materials, equipment and labor prices.

Dan Conant says he worries about getting enough electricians for his West Virginia renewable-energy company Solar Holler. The company started an internship program in partnership with a local high school and expects the state will need several thousand more electricians over the next decade.

“Ultimately, this is the bottleneck,” Mr. Conant said.

The scarcity is part of a nationwide labour shortage and most acute in the Northeast and California, where demand for green-energy products is highest, in part due to state incentives. Some economists expect the pinch to spread across the country as incentives from the new federal law known as the Inflation Reduction Act kick in.

The current total of more than 700,000 electricians in the U.S. is expected to grow about 7% over the next decade, slightly faster than the nationwide average of 5%, according to the Bureau of Labor Statistics. The shift to renewable energy and the need to update electrical systems is expected to drive that growth. Some analysts say that expansion needs to be several times faster for the U.S. to meet its climate and electrification goals.

The BLS includes a separate category of solar photovoltaic installers, some of whom could also be electricians. Growth in that much smaller sector is expected to be above 25%.

Industry analysts say it will be difficult to meet that demand, particularly because more electricians retire every year than are replaced, and many retired during the coronavirus pandemic.

The median age of electricians is over 40 years old, in line with the broader workforce. But nearly 30% of union electricians are between ages 50 and 70 and close to retirement, up from 22% in 2005, according to the National Electrical Contractors Association.

The average annual electrician salary rose from roughly $50,000 to about $60,000 from 2018 to 2022, an increase roughly in line with the national average, according to the BLS.

The climate law will put several hundred billion dollars’ worth of incentives into the economy designed to accelerate the energy transition and boost clean-energy supply chains in the U.S. The law followed an infrastructure spending package and incentives for domestic semiconductor manufacturing that are also expected to spur demand for labour and could end up pushing up total construction costs.

“We’re definitely in a new era of industrial policy,” said Philip Jordan, vice president at BW Research, a firm that studies how policies will impact the economy and workforce. “We’re putting our finger on the scale in a much more aggressive way than we ever have before.”

The impact of these policies differs from that of broad-based stimulus passed under the Trump and then Biden administrations in 2020 and 2021. Those packages raised demand across the board for goods and services. These latest policies are much smaller in total dollars, but also more focused, with their effects falling acutely on certain types of workers and products and in certain regions.

“There’s not enough people to do all this,” said Georgia Republican Gov. Brian Kemp, who argues the programs should have been spread out over a longer period. His state has attracted billions of dollars in investments from companies such as Norwegian firm Freyr Battery and Koch Industries Inc. since the climate law’s passage.

To help address worker shortages, the law ties tax credits for renewable projects to the number of hours worked by apprentices.

Product makers such as Schneider Electric SE are working to make simpler products and drive down installation times. The company has been investing tens of millions of dollars in expanding its product manufacturing in North America and partnering with trade associations on training programs for electricians who install them, said Michael Lotfy, senior vice president of power products.

“We’re really trying to cope with the spike in demand that will happen,” he said.

On a recent week in Ithaca, three of Mr. LaMorte’s employees were installing a heat pump for Matthew Minnig, a 40-year old engineer who lives with his wife in a four-bedroom house. Mr. Minnig hopes to use the heat pump—which moves air between the inside and outside of a home—to replace a natural-gas boiler for heat in the winter and add air conditioning in the summer.

He ordered the units in April, but was told installation would take several months. “There are times I can remember last summer thinking, ‘We’ve already paid a considerable amount for this project, and I’m still sweating in my house,’ ” he said.

Demand for electrical upgrades and heat pumps is likely higher in Ithaca than many cities because of local and state policies and incentives encouraging a shift away from fossil fuels.

Electricians say jobs can be bigger than expected because of the high electricity demands of devices such as car chargers and induction stoves. That often entails upgrading home electric panels to accommodate 100, 200 or 400 amperes, they say.

Jesse Kuhlman, owner of Kuhlman Electrical Services Inc. in Massachusetts, said the company’s South Shore division is booked out to the summer, its longest such backlog in recent years. The company focuses on rewiring old homes and has been doing many more electric-car charger installations lately.

Mr. Kuhlman has tried to grow the company by training apprentices over time. He expects new demand for rewiring homes and electric-panel upgrades to support the business even if the economy slows, a shift from the 2008 financial crisis, when he remembers not having jobs for weeks at a time.

“You can’t just take people off the street and throw them into what we do,” he said.

—Greg Ip contributed to this article.

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As Americans Work From Home, Europeans and Asians Head Back to the Office

While U.S. offices are half empty three years into the Covid-19 pandemic, workplaces in Europe and Asia are bustling again.

Americans have embraced remote work and turned their backs on offices with greater regularity than their counterparts overseas. U.S. office occupancy stands at 40% to 60% of prepandemic levels, varying within that range by month and by city. That compares with a 70%-to-90% rate in Europe and the Middle East, according to JLL, a property-services firm that manages 4.6 billion square feet of real estate globally.

Return to office was even more common in Asia, JLL said, where rates ranged from 80% to 110%—meaning that in some cities more people are in the office nowadays than before the pandemic.

Bigger homes, longer commutes and a tighter labor market help explain why Americans spend less time in the office than Europeans and Asians, workplace consultants say.

This divergence in return-to-office habits not only benefits overseas landlords more than their U.S. peers. It has a direct impact on how quickly metro areas rebound from the pandemic’s economic shock. Cities in Europe and Asia have bounced back relatively well. But empty office buildings and missing commuters have undermined recoveries in U.S. cities such as New York and San Francisco, where local restaurants, shops and other businesses that rely on office workers as their primary customers have suffered.

The number of unemployed in New York City increased by 83,500 between early 2020 and the third quarter of 2022 as the city’s unemployment rate surged far above the national average, according to a report by the New School Center for New York City Affairs. Many of those who lost their jobs worked in Manhattan in face-to-face industries such as retail, accommodation and food services.

While Manhattan has been particularly hard hit because of its dependence on office commuters, other U.S. central business districts are also struggling. Falling office values are threatening to hit city budgets that depend on property taxes. Lower transit ridership is weighing on the finances of public-transportation authorities. Adding more apartments can help revitalise central business districts, but that will take time.

Several overseas capitals experienced periods where more than 75% of their workers were back at their desks in 2021 and 2022, JLL said. That includes Tokyo, Seoul and Singapore in Asia. Paris regularly topped the list of workers back in the office in Europe. Stockholm wasn’t far behind with several months at a more-than-75% return-to-office rate.

No major U.S. city tracked by JLL achieved that high a return rate during the period.

“The U.S. has borne the brunt of this,” said Phil Ryan, director of city futures at JLL.

Living arrangements are one reason for the difference in work habits. Americans are more likely to live in spacious suburban houses. That makes it easier to set up a home office away from distractions. Hong Kong’s small apartments, for example, often house multiple generations, making working from home less appealing.

Suburban sprawl means many Americans have longer, more tedious commutes plagued by worsening traffic jams—another reason to stay home. While a number of European cities also have long average commutes, New York and Chicago are unmatched, according to mobility-services company Moovit Inc. Public-transit systems in Europe and Asia are often more reliable and less prone to delays, making it easier to get to work.

“We have high-density cities with effective public-transport systems,” said Caroline Pontifex, London-based director of workplace experience at consulting firm KKS Savills. “That makes a difference.”

Another explanation for America’s office exceptionalism is its labor market. At 3.4%, the U.S. unemployment rate is barely more than half the European Union’s unemployment rate of 6.1%. While Europe is also facing labor shortages, U.S. companies have been particularly hard hit, said JLL’s Mr. Ryan.

That has forced them to look farther afield for employees and hire remotely. Tech firms, which account for a particularly high share of employment in some big U.S. cities, have long been more tolerant of remote work.

Co-working companies are also reporting lower occupancy in some U.S. cities. WeWork Inc. said 72% of its desks in New York were leased as of the fourth quarter of 2022, compared with 80% in Paris, 81% in London and 82% in Singapore.

Workplace consultants say they expect the office-use gap between the U.S. and the rest of the world to persist.

It doesn’t help that U.S. offices were emptier long before the pandemic. A construction glut led to high vacancy rates, and even within leased offices companies tended to put fewer people on each floor than their European and Asian peers.

All that empty space is now creating a negative reinforcing cycle, said Phil Kirschner, an associate partner at business consulting company McKinsey & Co. Americans sitting in big, mostly empty offices find the experience depressing, making them more likely to stay at home in the first place. “It feels less energetic,” he said.