March 1999 Edition
MERGERS
1998 was the world's biggest year ever for mergers and acquisitions: they surpassed $2.4 trillion, 50% above 1997's total. U.S. companies made two-thirds of the deals. Biggest of all in value terms was the union of two oil giants, Exxon and Mobil, announced in December, which will create the world's biggest company in revenue terms.
DIAMONDS
De Beers, the world's largest diamond miner and marketer, states that sales have dipped to their lowest level in 12 years. Hurt by slumping demand from the troubled economies, particularly Japan, which normally accounts for one-fifth of all diamond sales, business dropped 28 per cent from $4.64 billion (U.S.) in 1997 to $3.35 billion in 1998. Experts consider the long-term prospects good for diamonds and for Canada to emerge as one of the world's players within several years, yielding an estimated 3.5 million carats a year. This compares with about 4 million carats a year produced by Australia, which supplies one-third of the world's diamonds.
TWEEN-AGERS
With 59 per cent of Canada's "tweens" having a bank account and 17 per cent possessing cards for automated banking machines (up from 8 per cent in 1995), children aged 9 to 14 are a significant emerging market. A survey by Creative Research International for YTV cable channel indicates that kids in this age group are savvy consumers who exert a growing influence on their families' spending habits. They control an increasingly large pool of discretionary income--$1.5 billion in 1998, up from $1.4 billion in 1997.
LABELLING
The European Commission is proposing to give companies another 10 years to phase out dual labelling in pounds and inches because of fears that an all metric rule could hinder trade with the U.S. In proposing to extend the transition period to all-metric labelling in Europe until 2009, the E.U. urged the U.S. to hurry up and adopt the metric system pointing out that the U.S. is the only western industrialized country that does not use the metric system even though it was a founding state behind an 1875 convention aimed at ensuring worldwide unification of measurements.
MORALE
Employee morale and job satisfaction is consistently and significantly higher in Canada than in the U.S. according to Chicago-based International Survey Research which has conducted employee surveys with thousands of workers in both countries. Canadians are more optimistic about job security and career development though many feel their skills are not being used in their current job. Canadians also feel more in control of their lives compared to the U.S. where employees can be fired more easily and without the financial settlements that apply in Canada.
JOBS
Canada's high-tech industry is expected to generate at least 30,000 jobs over the next two years according to a survey by the Branham Group for the Information Technology Association of Canada (ITAC). The survey found that 34 high-tech companies that participated expect to have 7,848 job vacancies by 2000. They currently have 80,000 employees or 20 per cent of the high-tech work force in Canada. By extrapolating these numbers to reflect the 1,300 Canadian high-tech companies it is estimated that 30,000, or 10 per cent, more jobs will be created. This surpasses the 20,000 job openings estimated by the Software Human Resources Council in Ottawa.
BRITAIN
This country is now the fifth-largest trading nation in the world, with higher per capita exports than either the U.S. or Japan. Britain's film and fashion industries are in the midst of a renaissance, leaving a deep imprint on style and culture worldwide. Britain has become one of the world's leading maker of computer games. New restaurants and various ethnic cuisines have replaced the country's once-grim parade of fish-and-chip shops.
CHEAP
Research by Deloitte & Touche Consulting shows that when investing abroad, U.S. manufacturers often do not choose cheap-labour countries. For many manufacturers, the attraction of cheap labour is outweighed by concerns such as economic stability, skilled workers and well-developed infrastructure. European countries, particularly Britain, were the first choice for off-shore investment, but Canada was second.
SPENDING
Canadian households spent, on average, an estimated $49,950 on everything from child care to travel to communications in 1997, virtually unchanged from 1996. Personal income taxes continue to make up the largest share of household spending. In 1997, an average of 21 cents of every dollar went towards personal income taxes, followed by 20 cents for shelter, 12 cents for transportation and 11 cents for food. The remaining 36 cents were spent on a variety of items such as recreation, personal insurance and pension contributions, household operations, clothing, gifts and contributions to charity.
BLUE
The Color Marketing Group, an organization of 1,500 designers mainly based in North America, has decreed that blue is the emerging colour this year. Blues will be showing up increasingly in clothes, fabrics, paints and consumer goods. Blues have been out of favour for quite a while, mainly because they were overshadowed by the strong popularity of greens in the past several years.
AFFLUENCE
The statistical service of the European Union states that the richest region in the E.U. is Inner London, but only when considered apart from the suburbs. Five of the ten richest regions were in Germany, and the poorest one was Ipeiros, in Greece.
BROADCASTING
Canadian broadcasters are lobbying to make U.S. specialty channels pay to be carried on Canadian airwaves to end a system they say is grabbing advertisers away from Canadian channels. The effort to extract $24 million from channels including A&E and CNN could prompt trade retaliation. The industry claims that the U.S. takes $80 million a year out of Canada in subscriber fees but give nothing back
GIVING
The 21 rich countries of the OECD gave a record low share of their national income in overseas aid in 1997. Only four countries met the UN target of 0.7 per cent of their GDP.
HORMONES
The European Union is trying to avert another trans-Atlantic trade war by adopting an interim solution with the U.S. over the EU's 10 year ban on the use of growth hormones in beef which began in 1989. The interim arrangement, involving some compensation to the U.S. would expire at the end of this year when a series of 17 scientific studies would prove or disprove the EU's contention that beef hormones represent a risk to humans. 1998 U.S. beef exports to Europe were $24 million but used to be around $100 million annually.
AIR FARES
In 1997, the average domestic air fare (all types) paid by Canadian passengers was $181, up 2.4% from the 1996 figure of $177, but still 9.4% below the record average air fare of $200 in 1994. The increase in average fares occurred despite the record 83.0% of passengers who travelled on discount fares on domestic scheduled services, up from the previous record of 79.6% in 1996. The greatest use of discount fares was on international services, where 89.4% of passengers travelled on a discount. The lowest use was in the northern domestic sector, where 66.4% of passengers travelled on a discount.
THE FUTURE
The next time your pop machine takes a while popping a soda out of the chute, it may be busy connecting to the Internet. A British company has won a 20-year agreement with The Coca-Cola Company to bring the company's world-wide cold drink vending machines online. The units will provide Coca-Cola bottlers with accurate, real-time information on the status of individual machines, wherever they are located. Data will include details of the number of drinks sold by brand, space available in the machine, cash box contents and alerts when machines need maintenance, repair or re-stocking.
SECURITY
Private security personnel continue to outnumber police officers. In 1996, there were approximately 59,000 police officers in Canada compared with 82,000 private security personnel. Between 1991 and 1996, private security personnel increased 1% while the number of police officers dropped 4%. In general, private security personnel are responsible for the protection of their client and/or their client's property, whereas police officers are responsible for the safety and security of the public. In recent years, the line between the two has become blurred.
SMART FOODS
According to the Grocery Manufacturers of America, these are foods that can actually ward off the kinds of diseases and ailments that we all develop as we grow older. This market in the next five to ten years is estimated to be worth about 34 billion dollars.
FILM AND VIDEOS
The independent film, video and audio-visual production industry experienced another year of strong revenue growth in 1996/97, surpassing records for total revenue, production revenue and exports set the previous year. Total revenues advanced 4.8% to $1.3 billion. This growth was driven almost entirely by a 10% increase in production revenues, which hit $967 million. And after doubling in 1995/96, exports increased a further 12.7% in 1996/97 to $361.5 million. As in previous years, television programming led exports, accounting for almost two-thirds of the total.
HEATING
Manufacturers produce dozens of major heating appliances including oil and gas burners, metal fireplaces, solar heat collectors, boilers and hot air registers. In 1996, close to 7,000 people worked for 128 heating equipment makers in Canada and these companies reported revenues of $719 million. Production has been growing at an average rate of 3.2 per cent since 1990. Since 1992, both imports and exports to the U.S. has been on the rise with Canada's heating equipment companies running a trade surplus of $57 million. New products such as high-efficiency furnaces, which reduce fuel consumption and are more environmentally friendly, are driving the market.
GERMS
An antibacterial agent widely used in soaps, lotions and other consumer products triggers a genetic change in bacteria that could widen the scope of life-threatening drug resistance, a new study shows. Now germ hunters from Tufts University Medical School in Boston are hoping to capture some of the drug-resistant bacteria they suspect may lurk in households where heavily advertised products containing the compound triclosan are being used every day.
ELEPHANTS
The British edition of GQ magazine claims elephants make their own cider. They bury apples in the ground, wait until they ferment, dig them up again and get drunk.
PAY
Researchers in Washington's National Zoo will "pay" their orangutans a daily allowance of metal coins that they can use to buy bananas, popcorn and other items. Zoologists hope that the animals, which have already grasped a simple language of abstract symbols, will prove adept at handling numbers, judging an item's worth and perhaps even start trading among themselves.
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
1998 was the world's biggest year ever for mergers and acquisitions: they surpassed $2.4 trillion, 50% above 1997's total. U.S. companies made two-thirds of the deals. Biggest of all in value terms was the union of two oil giants, Exxon and Mobil, announced in December, which will create the world's biggest company in revenue terms.
DIAMONDS
De Beers, the world's largest diamond miner and marketer, states that sales have dipped to their lowest level in 12 years. Hurt by slumping demand from the troubled economies, particularly Japan, which normally accounts for one-fifth of all diamond sales, business dropped 28 per cent from $4.64 billion (U.S.) in 1997 to $3.35 billion in 1998. Experts consider the long-term prospects good for diamonds and for Canada to emerge as one of the world's players within several years, yielding an estimated 3.5 million carats a year. This compares with about 4 million carats a year produced by Australia, which supplies one-third of the world's diamonds.
TWEEN-AGERS
With 59 per cent of Canada's "tweens" having a bank account and 17 per cent possessing cards for automated banking machines (up from 8 per cent in 1995), children aged 9 to 14 are a significant emerging market. A survey by Creative Research International for YTV cable channel indicates that kids in this age group are savvy consumers who exert a growing influence on their families' spending habits. They control an increasingly large pool of discretionary income--$1.5 billion in 1998, up from $1.4 billion in 1997.
LABELLING
The European Commission is proposing to give companies another 10 years to phase out dual labelling in pounds and inches because of fears that an all metric rule could hinder trade with the U.S. In proposing to extend the transition period to all-metric labelling in Europe until 2009, the E.U. urged the U.S. to hurry up and adopt the metric system pointing out that the U.S. is the only western industrialized country that does not use the metric system even though it was a founding state behind an 1875 convention aimed at ensuring worldwide unification of measurements.
MORALE
Employee morale and job satisfaction is consistently and significantly higher in Canada than in the U.S. according to Chicago-based International Survey Research which has conducted employee surveys with thousands of workers in both countries. Canadians are more optimistic about job security and career development though many feel their skills are not being used in their current job. Canadians also feel more in control of their lives compared to the U.S. where employees can be fired more easily and without the financial settlements that apply in Canada.
JOBS
Canada's high-tech industry is expected to generate at least 30,000 jobs over the next two years according to a survey by the Branham Group for the Information Technology Association of Canada (ITAC). The survey found that 34 high-tech companies that participated expect to have 7,848 job vacancies by 2000. They currently have 80,000 employees or 20 per cent of the high-tech work force in Canada. By extrapolating these numbers to reflect the 1,300 Canadian high-tech companies it is estimated that 30,000, or 10 per cent, more jobs will be created. This surpasses the 20,000 job openings estimated by the Software Human Resources Council in Ottawa.
BRITAIN
This country is now the fifth-largest trading nation in the world, with higher per capita exports than either the U.S. or Japan. Britain's film and fashion industries are in the midst of a renaissance, leaving a deep imprint on style and culture worldwide. Britain has become one of the world's leading maker of computer games. New restaurants and various ethnic cuisines have replaced the country's once-grim parade of fish-and-chip shops.
CHEAP
Research by Deloitte & Touche Consulting shows that when investing abroad, U.S. manufacturers often do not choose cheap-labour countries. For many manufacturers, the attraction of cheap labour is outweighed by concerns such as economic stability, skilled workers and well-developed infrastructure. European countries, particularly Britain, were the first choice for off-shore investment, but Canada was second.
SPENDING
Canadian households spent, on average, an estimated $49,950 on everything from child care to travel to communications in 1997, virtually unchanged from 1996. Personal income taxes continue to make up the largest share of household spending. In 1997, an average of 21 cents of every dollar went towards personal income taxes, followed by 20 cents for shelter, 12 cents for transportation and 11 cents for food. The remaining 36 cents were spent on a variety of items such as recreation, personal insurance and pension contributions, household operations, clothing, gifts and contributions to charity.
BLUE
The Color Marketing Group, an organization of 1,500 designers mainly based in North America, has decreed that blue is the emerging colour this year. Blues will be showing up increasingly in clothes, fabrics, paints and consumer goods. Blues have been out of favour for quite a while, mainly because they were overshadowed by the strong popularity of greens in the past several years.
AFFLUENCE
The statistical service of the European Union states that the richest region in the E.U. is Inner London, but only when considered apart from the suburbs. Five of the ten richest regions were in Germany, and the poorest one was Ipeiros, in Greece.
BROADCASTING
Canadian broadcasters are lobbying to make U.S. specialty channels pay to be carried on Canadian airwaves to end a system they say is grabbing advertisers away from Canadian channels. The effort to extract $24 million from channels including A&E and CNN could prompt trade retaliation. The industry claims that the U.S. takes $80 million a year out of Canada in subscriber fees but give nothing back
GIVING
The 21 rich countries of the OECD gave a record low share of their national income in overseas aid in 1997. Only four countries met the UN target of 0.7 per cent of their GDP.
HORMONES
The European Union is trying to avert another trans-Atlantic trade war by adopting an interim solution with the U.S. over the EU's 10 year ban on the use of growth hormones in beef which began in 1989. The interim arrangement, involving some compensation to the U.S. would expire at the end of this year when a series of 17 scientific studies would prove or disprove the EU's contention that beef hormones represent a risk to humans. 1998 U.S. beef exports to Europe were $24 million but used to be around $100 million annually.
AIR FARES
In 1997, the average domestic air fare (all types) paid by Canadian passengers was $181, up 2.4% from the 1996 figure of $177, but still 9.4% below the record average air fare of $200 in 1994. The increase in average fares occurred despite the record 83.0% of passengers who travelled on discount fares on domestic scheduled services, up from the previous record of 79.6% in 1996. The greatest use of discount fares was on international services, where 89.4% of passengers travelled on a discount. The lowest use was in the northern domestic sector, where 66.4% of passengers travelled on a discount.
THE FUTURE
The next time your pop machine takes a while popping a soda out of the chute, it may be busy connecting to the Internet. A British company has won a 20-year agreement with The Coca-Cola Company to bring the company's world-wide cold drink vending machines online. The units will provide Coca-Cola bottlers with accurate, real-time information on the status of individual machines, wherever they are located. Data will include details of the number of drinks sold by brand, space available in the machine, cash box contents and alerts when machines need maintenance, repair or re-stocking.
SECURITY
Private security personnel continue to outnumber police officers. In 1996, there were approximately 59,000 police officers in Canada compared with 82,000 private security personnel. Between 1991 and 1996, private security personnel increased 1% while the number of police officers dropped 4%. In general, private security personnel are responsible for the protection of their client and/or their client's property, whereas police officers are responsible for the safety and security of the public. In recent years, the line between the two has become blurred.
SMART FOODS
According to the Grocery Manufacturers of America, these are foods that can actually ward off the kinds of diseases and ailments that we all develop as we grow older. This market in the next five to ten years is estimated to be worth about 34 billion dollars.
FILM AND VIDEOS
The independent film, video and audio-visual production industry experienced another year of strong revenue growth in 1996/97, surpassing records for total revenue, production revenue and exports set the previous year. Total revenues advanced 4.8% to $1.3 billion. This growth was driven almost entirely by a 10% increase in production revenues, which hit $967 million. And after doubling in 1995/96, exports increased a further 12.7% in 1996/97 to $361.5 million. As in previous years, television programming led exports, accounting for almost two-thirds of the total.
HEATING
Manufacturers produce dozens of major heating appliances including oil and gas burners, metal fireplaces, solar heat collectors, boilers and hot air registers. In 1996, close to 7,000 people worked for 128 heating equipment makers in Canada and these companies reported revenues of $719 million. Production has been growing at an average rate of 3.2 per cent since 1990. Since 1992, both imports and exports to the U.S. has been on the rise with Canada's heating equipment companies running a trade surplus of $57 million. New products such as high-efficiency furnaces, which reduce fuel consumption and are more environmentally friendly, are driving the market.
GERMS
An antibacterial agent widely used in soaps, lotions and other consumer products triggers a genetic change in bacteria that could widen the scope of life-threatening drug resistance, a new study shows. Now germ hunters from Tufts University Medical School in Boston are hoping to capture some of the drug-resistant bacteria they suspect may lurk in households where heavily advertised products containing the compound triclosan are being used every day.
ELEPHANTS
The British edition of GQ magazine claims elephants make their own cider. They bury apples in the ground, wait until they ferment, dig them up again and get drunk.
PAY
Researchers in Washington's National Zoo will "pay" their orangutans a daily allowance of metal coins that they can use to buy bananas, popcorn and other items. Zoologists hope that the animals, which have already grasped a simple language of abstract symbols, will prove adept at handling numbers, judging an item's worth and perhaps even start trading among themselves.
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
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