Elgin Development Group

05/28/2026

05/26/2026

Discount Retailers ride sales growth

Ross Stores joined other major discount retailers posting strong sales gains in the first quarter, including Walmart and Target, as consumers trim budgets in response to spiking gas prices and other household expenses. The Dublin, California-based operator of nearly 2,300 stores, including Ross Dress for Less and dd’s Discounts, reported a 21% annual jump in total sales and 17% rise in same-store sales for the quarter ended May 2.

Total sales topped $6 billion as the company also increased its full-year same-store sales growth outlook to between 6% and 7%, after the company grew sales 5% in 2025. Ross Stores posted first-quarter net income of $650 million, up from $479 million a year earlier.

During an earnings call with analysts, Ross Stores CEO Jim Conroy cited factors including higher customer traffic, “compelling merchandise assortments,” improvements to the in-store experience and spending related to tax refunds. The company opened 13 new Ross stores and four dd's Discounts locations in the first quarter, with plans to continue 5% annual unit growth with about 110 stores to open in 2026. Conroy also reiterated plans to close or relocate about 10 to 15 older stores.

The CEO said first-quarter sales increased across multiple product categories, demographics and regions. The company’s off-price, clearance-focused stores historically have not seen immediate, direct correlation between gas prices and consumer spending, though Conroy said the impact could change depending on how high gas prices rise and how long they stay elevated.

“I would also add the silver lining for off-price is that any uncertainty in the macro environment could lead to customers seeking more value when shopping and create closeout opportunities for us from the supply side,” Conroy said.

05/22/2026

Walmart sales rise

Walmart posted a 7.3% annual boost in total revenue and a 4.1% increase in same-store sales in its latest quarter, with spending up in categories like patio furnishings, sporting goods and toys. Total quarterly revenue reached $177.8 billion, but the world’s largest retailer cautioned that sales could slow this year if consumers continue to suffer rising gasoline prices and other household expenses.

Walmart Chief Financial Officer John David Rainey said high-income customers are generally “spending with confidence into many categories.” But lower-income customers with tighter budgets are showing signs of financial distress, based on factors including lower average gas purchases at the retailer’s stores that sell fuel.

“We have a large fuel business, and we see that in the most recent period, the number of gallons that customers fill up with when they come to our fuel stations fell below 10 for the first time since 2022,” Rainey told analysts during a quarterly earnings call Thursday. “That’s an indication of stress.”

With expectations for rising inflation factored in, the Bentonville, Arkansas-based operator of more than 10,000 stores worldwide is maintaining a conservative outlook for full-year sales growth at between 3.5% and 4.5%. Walmart CEO John Furner said the company continues to cut prices, with new reductions now in effect for about 7,200 items, as it invests in distribution center improvements incorporating artificial intelligence to speed product deliveries.

“Approximately half of our e-commerce fulfillment center volume in Walmart U.S. is automated,” Furner told analysts. “More than 60% of our stores are receiving some level of freight from automated distribution centers. More than half of our regional distribution centers are in various stages of being retrofitted.”

05/21/2026

More Elgin Employment Numbers

The table below shows annual data that was released last week. The COVID pandemic period that began in the U.S. officially in March 2020 had a substantial impact on the labor force as some 22 million jobs vanished and was combined with the steady, continued exodus of 79 million baby boomers out of the labor force. COVID accelerated the decrease in the participation rate drop in the workforce to 60.1% in April of 2020 which was the lowest level since the 1970’s. The table below shows how Elgin’s labor force has bounced back and has been able to maintain its strong position in Kane County. Kane County’s labor force had a peak number of 286,581 people in the workforce in July 2019 and has fallen to 271,862 at the end of February 2026, while Elgin remained stable.

05/18/2026

Contractor project backlogs rise

The average construction backlog, reflecting the volume of projects under contract but not completed or billed by U.S. contractors, reached 8.8 months in April, according to the latest tracking by the Associated Builders and Contractors trade group. That was up 0.2 months from March and 2.2 months higher than in April 2025, signaling improving business prospects.

The project backlog surged to a 10-month high in April, though “the industry’s recent momentum is highly concentrated among a subset of contractors,” Anirban Basu, the trade group’s chief economist, said in a statement. He noted booming data center construction “has almost exclusively benefited” the largest contractors with more than $100 million in annual revenue.

Contractors generally remain confident in their outlooks for revenue and profits over the next six months. Also this month, data firm Dodge Construction Network reported a 6.2% April jump in U.S. nonresidential projects heading into planning after receiving necessary approvals, with commercial projects rising 8.1% from the prior month, led by offices, data centers and warehouses.

This followed three months of slowing momentum, according to Dodge analyst Sarah Martin. Dodge reported a total of 44 projects heading into planning that were valued at $100 million or higher, led by a $500 million Google data center in Buffalo, West Virginia, and a $470 million Stargate data center in Burlington, Texas.

05/14/2026

Producer prices soar

U.S. companies’ costs to provide goods and services during April spiked 6% from a year earlier, marking the biggest annual increase since December 2022, the Labor Department reported Wednesday. Also known as wholesale prices, producer prices often affect consumer inflation, which reached a three-year high of 3.8% in April, the government reported earlier this week.

Like consumers, U.S. firms were hit hard in April by a 7.8% jump in producer energy prices from the prior month, spurred largely by a 15.6% spike in gasoline costs. That affected numerous segments of the economy that rely on transportation services, with truck freight costs rising 8.1% for the month and 15.2% from April 2025.

The Associated General Contractors of America noted diesel prices climbed 13.6% from the prior month and increased 73.8% from a year earlier. Project developers were also pressured by a 1.7% monthly rise and a 6.6% annual jump in nonresidential construction materials. Asphalt prices rose 18% on an annual basis, with milled aluminum materials up 37.3%.

“Construction input costs continue to rise much faster than contractors’ bid prices, particularly for energy-intensive and metals-related materials,” Macrina Wilkins, the contractor group’s director of market insights, said in a statement Wednesday. “That gap is making it increasingly difficult for contractors to accurately price projects and raising the risk of delays, redesigns, and deferred construction activity if cost volatility persists.”

The National Association of Home Builders said material prices for residential projects, excluding energy, rose 3.7% from a year earlier, the biggest annual jump in three years. With all material and service expenses factored in, April’s new residential construction costs rose 1.3% from the prior month and 5.9% from a year earlier, the builder group said.

05/12/2026

Elgin's Employment Numbers

The Illinois Department of Employment Security released monthly employment numbers for Illinois municipalities, counties, and metropolitan districts for February 2026. February Metro and Local area data were released on Thursday, April 23, due to the additional time required to revise historical monthly, annual sub-State nonfarm jobs and unemployment statistics (benchmarking). The unemployment rate for Elgin went up from 1.0% year-over-year. Despite the increase, Elgin employment numbers are rather stable, and the local economy continues to show resilience.

05/12/2026

Dunkin’ owner files for IPO

Inspire Brands, owner of restaurant chains such as Dunkin’, Arby’s and Buffalo Wild Wings, has filed for an initial public offering of its stock. It’s the latest in a series of industry financial moves as operators respond to consumer spending pullbacks and shifts in dining traffic.

Atlanta-based Inspire Brands has “confidentially submitted a draft registration statement” with the U.S. Securities and Exchange Commission, a company statement said. Inspire plans to use net proceeds from the offering to repay outstanding debt under its existing term loan facility, and also pay fees and expenses related to the offering itself.

The company said timing, number of shares to be offered and pricing have not been determined. Inspire’s principal owner, private equity firm Roark Capital Group, is seeking to raise about $2 billion with the IPO, according to sources cited by Bloomberg.

Through a series of acquisitions, Inspire also owns brands including Baskin-Robbins, Sonic Drive-In and sandwich chain Jimmy John’s. U.S. IPO activity has remained sparse for the past several months, though companies announcing planned offerings have included the growing sandwich chain Jersey Mike’s.

Several U.S. restaurant operators have undergone store closings, ownership changes and other financial restructurings during the past two years, though others continue to plan expansions. U.S. spending at food and drinking places reached $100.2 billion in March, up 0.1% from February with flat growth for much of 2026, according to the latest Commerce Department data.

05/08/2026

McDonald’s sales rise despite consumer pressures

McDonald’s started off 2026 by beating analyst expectations for revenue and profits, though company executives said lower-income consumers in particular are increasingly challenged when it comes to spending money at the world’s largest restaurant chain.

Rising gas prices among other household budget constraints are creating a situation that is “certainly not improving, and it may be getting a little worse,” McDonald’s CEO Chris Kempczinski told analysts Thursday during a first-quarter earnings call. The company expects continued inflationary pressures that “disproportionately impact low-income consumers,” and will respond with ongoing menu discounts, the CEO said.

The Chicago-based operator of 44,000 restaurants worldwide, about a quarter of them in the U.S., reported first-quarter total annual revenue growth of 9%, U.S. same-store growth of 3.9% and global net income growth of 6%. Numerous dining companies have noted consumer challenges that have slowed sales, and Federal Reserve Bank of New York researchers said this week that spiking gas prices are putting particular pressure on spending by lower-income consumers.

Gas prices are up about 50% on average since the start of the Iran war, according to AAA. Households earning less than $40,000 annually “decreased real consumption by much more” compared with 2023, “potentially by carpooling or substituting public transit where available,” Fed researchers said in a blog post.

In a separate report based on an April consumer survey, the regional Fed said U.S. consumers now expect annual inflation to reach 3.6% in the coming year, up 0.2 percentage points from the March survey based on median responses. The annual inflation rate was on the rise at 3.3% as of March, the Labor Department reported.

05/06/2026

Rising Multifamily Vacancy Expected to Peak in Early 2027
U.S. supply decline still outpaces moderating demand

U.S. multifamily vacancy rates are now expected to rise more than previously forecast, peaking in early 2027 as rent growth weakens.

Although new construction is slowing, supply is still projected to exceed demand in the near term. Annual absorption—defined as the net change in occupied units—is expected to lag behind deliveries as leasing activity returns to more typical, pre-pandemic levels. Following a surge in multifamily construction during and after the pandemic, the market continues to work through a backlog of newly delivered units.

Vacancy is projected to reach 8.8% by the end of this year before easing slightly to 8.4% by the end of 2027. Stabilized vacancy rates are expected to rise gradually through mid-2027 as excess inventory from the past two years is absorbed.

Forecasts from CoStar maintain near-term rent growth expectations, reflecting steady but moderate leasing demand. However, projections for the second half of the year have been revised downward due to softer employment growth, which is expected to slow demand and extend the absorption timeline into 2027.

Annual rent growth is now expected to increase from 0.2% in the first quarter to 0.5% in the second quarter of 2026—an upward revision of 10 basis points from the prior forecast. Still, growth later in the year has been trimmed, with fourth-quarter projections lowered from 0.6% to 0.5%.

The near-term outlook reflects stable first-quarter performance, while weaker expectations for the second half of 2026 stem from slower job growth and the large volume of excess supply delivered in 2024 and 2025.

Absorption is projected to fall to roughly 70,000 units per quarter, below the five-year pre-pandemic average. Meanwhile, completions are expected to drop 28% in 2026 to 382,000 units, followed by an additional 24% decline in 2027. This pullback in new supply is expected to allow demand to outpace deliveries by mid-2027.

Downside Risks Persist

Risks to the outlook remain skewed to the downside. Rising energy costs have already reduced consumer purchasing power, while economists have lowered employment growth forecasts amid shifting U.S. tariff policies, slower labor force expansion, and productivity gains that reduce hiring needs.

Over the longer term, these factors are expected to continue weighing on rental demand. While fiscal expansion between mid-2026 and early 2027 could provide a temporary economic boost, lower immigration levels are projected to constrain labor force and employment growth through 2031.

Population growth and household formation are also expected to remain subdued, further limiting demand.

As a result, multifamily vacancy rates are forecast to decline only gradually over the next five years, while rent growth is expected to average 1.5% annually—below historical norms.