September 2007 Edition
LOCATION
A new emerging-markets index says that the most attractive location for manufacturing is now Vietnam, not China. Also, the United Arab Emirates beats India as a location for service-sector activities. The index assesses 20 prominent emerging-market locations on the basis of "reward" factor, including production costs, size of market, taxes, transport costs and tariffs and "risk" factors. It finds that Russia, Brazil, India and China do not come top as locations for either manufacturing or services.
ELECTRONICS
The growing popularity of hi-tech devices in the UK, such as flat-screen TVs and digital radios is threatening to undermine efforts to save energy. UK consumers spend US$25-billion a year on electronics and by 2020 it is estimated that gadgets will account for about 45 per cent of electricity used in UK households. The equivalent of 14 power stations will be needed by 2020 just to power consumer electronics.
OIL
A U.S. based company has developed a way to turn oil-based plastics back into the oil from which they were made. By zapping such materials with a finely tuned microwave, they are reduced back to oil and combustible gas. Running 9.1 kilograms of ground-up tires through a machine produces 4 litres of diesel oil, one and a half cubic metres of combustible gas, one kilogram of steel and three kilograms of carbon black.
PLANES
The chairman of Emirates Airlines has grand ambitions and a bankroll to match. He has US $82-billion from his government, the airline and other financiers and has ordered 55 super jumbo A380s to create the largest fleet of these double-decker planes in the world. He wants to make Dubai, a sheikhdom by the sea, the busiest airline hub in the world, overtaking London, New York and Singapore. In 1985, starting with $10-million, Emirates was a two-plane operation. It now has 105 planes.
INDIA
Indian software and services exports are expected to earn about US$40-billion in the year to March 2008. It is estimated that this sector will achieve $60-billion in export revenue by 2009\2010. A large pool of English-speaking and well-educated workers have helped to win outsourcing contracts from firms in the U.S. and Europe. The industry contributes 5.2 per cent to the Indian economy.
SHIPS
Britain's merchant navy once ruled the waves. Since 1975, the number of UK-owned and registered vessels with a capacity of 500 gross tons or more has slumped from 1,600 to less than 300, while the number of British seamen serving on them has dropped from 90,000 to just 16,000. Some experts fear that the decline of the service will weaken Britain strategically and economically by forcing it to become dependent on foreign shipping. Britain's maritime industry is worth US$20-billion a year.
IMPORTS
According to Statistics Canada, the top foods in volume Canada imported from China in 2006 in millions of kilograms were: Mandarins, clementines and similar citrus hybrids, fresh and dried, (33.9); Frozen fish fillets, (24.4); Fresh pears and quinces, (13.6); Raw peanuts, (10.6); Frozen shrimp and prawns, (10.4); Pasta, (10.3); Mushrooms, (8.9); Other citrus fruits, (8.8) and Shrimps and prawns, prepared or preserved, (7.3).
TRAVEL
The U.S. has lost billions of dollars and an immeasurable amount of good will since the September 2001 terrorist attacks because of a decline in foreign tourists. Visits to the U.S. from countries outside Canada and Mexico totalled 21.7 million in 2006, down 17 per cent from a peak of 26 million in 2000. In the same period, cross-border travel around the world was up 20 per cent. Visits from Britain, Japan, Germany, France, South Korea and Australia have dropped 15 per cent while travel from those countries to other countries was up 39 per cent.
COPPER
South African copper exports are booming but there is little rejoicing. The trade is being fuelled by theft of copper cables that carry electricity, regularly plunging whole suburbs into darkness, stranding thousands of train passengers and wreaking havoc with the national economy. Nationally, it costs an estimated US$70-million to replace stolen cables every year and $350-million in further losses, including the impact of power outages. The Western Cape province which has no copper mines reported exports last year of $11-million.
CORN
U.S. farmers planted 92.9 million acres of corn in 2007, the largest amount of acreage since 1944 and 19 per cent more than was planted last year. Iowa continues to lead all states in total corn acres and state records were set in Illinois, Indiana, Minnisota and North Dakota. These increases are attributed to favourable prices, growing ethanol demand and strong export sales.
TRADE
The U.S. and South Korea have signed a free trade agreement, the biggest such deal for the U.S. in 15 years, though it is not certain that Congress will approve the deal. The pact eliminates nearly 95 per cent of tariffs on bilateral trade in consumer and industrial goods within three years and almost two-thirds of U.S. farm exports will be immediately duty free when the FTA is implemented. This is the biggest U.S. free trade deal since the NAFTA. However, some are concerned that the automobile provisions don't go far enough.
VENDING
Two Scottish entrepreneurs have come up with an invention that battles the humidity to keep hair straight during a night on the town. The coin-activated "Straight Up" vending machines will provide 90 seconds of hair straightening time for about the same price as a coat check at a night club. They launched the first machine in 2005 and now have more than 800 units in bars, clubs, gyms and offices.
GREEN
As part of an eco-initiative by one of Britain's largest retailers, they are now selling trousers made from 14 mineral water bottles. They are made in factories in Indonesia from recycled clear plastic bottles that have been spun into polyester in Taiwan. The trousers cost about C$40.00 and come in charcoal and navy and the crease-resistant trousers are machine washable. If they sell successfully the line could be extended to women's clothes.
COMMUTING
Seventy-seven per cent of workers in the U.S., more than 102-million people, drive alone to and from work, up from 1990. This has happened despite the fact that retail gasoline prices rose by 60 cents per gallon in the same 15-year period, adjusted for inflation. Biking is showing no gains and carpooling is also on a downward trend.
BRANDING
The Canadian Brand Index ranks the country's most recognizable brands by total value and overall strength. Topping the list is Cirque de Soleil with a brand value of C$880-million. Second is Ski-Doo, ($293-million); CBC, ($283-million); Roots, ($134-million); Toronto Maple Leafs, ($95-million) and Montreal Canadians, ($87-million).
TEENS
The market for products bought by and for the 25.6-million-member teen market in the U.S. will experience a growth spurt, increasing from US$189.7-billion in 2006 to $208.7-billion in 2011, despite an estimated three per cent decline in the 12-to 17-year-old population in the same period. Teen spending money, accumulated through paying jobs, allowances from parents and monetary gifts will increase an estimated 3.5 per cent annually.
POTASH
Global interest in biofuels has helped push prices for potash, a mineral-based fertilizer to record levels and those prices will increase further through the balance of the year. Worldwide, the three crops using the most potash per hectare planted are sugar cane, palm oil and corn. This has stepped up fertilizer use in Asia, Brazil and North America.
SEAFOOD
Overall seafood consumption in the U.S. was 16.5 pounds per person last year, up from 16.2 pounds in 2005 and 14.8 pounds in 2001. Shrimp continues to lead seafood consumption followed by Canned Tuna, Salmon and Pollock. Tilapia, a mild-tasting white fish, is now in fifth position replacing catfish which is sixth.
TEA
The hottest investment in China today is in the shape of a small, compressed cake that smells earthy and is wrapped in paper. Pu'er tea, a strong aromatic brew from Yunnan has long been prized in China for medicinal qualities. Now, instead of drinking it, millions of Chinese are hoarding it after the price jumped 50 per cent last year. Like fine wine, Pu'er tea is considered to improve with age and it is now six times more expensive than gold.
MATCHBOX
These miniature die-cast toys were a favourite of children in the 1950s and 1960s. The range of toys that flowed from it were sold in over 140 countries. At one point, Matchbox was selling two million models every week, outpacing rivals like Meccano's Dinky range by adding two new models each month. Eventually their popularity waned to be replaced by Mattel's models with friction wheels which meant they ran further and faster.
DOWNLOADS
Sales of CDs in the UK fell by 10 per cent in the first half of the year. The decline was much greater in the U.S., the world's largest music market, where sales dropped by 20 per cent. However, this decline was partially offset by the growth in digital downloads to two million units in the U.S. which left overall sales down by 9 per cent.
VACCINES
The dream of cheap, easy-to-store, needle-free vaccines is now closer to reality. Japanese researchers have created a strain of rice that protects against cholera. Edible rice vaccines could also be developed to protect against diseases such as HIV-AIDS, SARS and influenza. These rice-based mucosal vaccines offer a highly practical and cost effective strategy for orally vaccinating large populations.
TRENDS
London is to rip out more than 2,000 coin parking machines, as with rates of nearly $10.00 an hour, it is unreasonable to expect motorists to carry fistsfull of coins. Motorists will use credit or debit cards for parking. Those with a cell phone will be able to do so by text after setting up an account, with their card and car registration details. Drivers will have to text in the parking space number and the amount of time for which they wish to pay. They will be sent a text warning shortly before the time is up.
SPICES
Emerging ethnic cuisines are giving Americans a taste for bold spices from all over the globe. Spices are finding their way onto menus and specialty food products attracting new customers and even adding health promises. A key reason for the new interest in exotic spices is the shifting cultural makeup of the nation. Beyond salt and pepper, the spice market has now reached US$1.2-billion.
SPORRANS
Because of new EU regulations brought in to protect wild animals, anyone who has bought a sporran since 1994 may have to obtain a licence for them because otters and badgers, from which sporrans are made, are now protected.
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
A new emerging-markets index says that the most attractive location for manufacturing is now Vietnam, not China. Also, the United Arab Emirates beats India as a location for service-sector activities. The index assesses 20 prominent emerging-market locations on the basis of "reward" factor, including production costs, size of market, taxes, transport costs and tariffs and "risk" factors. It finds that Russia, Brazil, India and China do not come top as locations for either manufacturing or services.
ELECTRONICS
The growing popularity of hi-tech devices in the UK, such as flat-screen TVs and digital radios is threatening to undermine efforts to save energy. UK consumers spend US$25-billion a year on electronics and by 2020 it is estimated that gadgets will account for about 45 per cent of electricity used in UK households. The equivalent of 14 power stations will be needed by 2020 just to power consumer electronics.
OIL
A U.S. based company has developed a way to turn oil-based plastics back into the oil from which they were made. By zapping such materials with a finely tuned microwave, they are reduced back to oil and combustible gas. Running 9.1 kilograms of ground-up tires through a machine produces 4 litres of diesel oil, one and a half cubic metres of combustible gas, one kilogram of steel and three kilograms of carbon black.
PLANES
The chairman of Emirates Airlines has grand ambitions and a bankroll to match. He has US $82-billion from his government, the airline and other financiers and has ordered 55 super jumbo A380s to create the largest fleet of these double-decker planes in the world. He wants to make Dubai, a sheikhdom by the sea, the busiest airline hub in the world, overtaking London, New York and Singapore. In 1985, starting with $10-million, Emirates was a two-plane operation. It now has 105 planes.
INDIA
Indian software and services exports are expected to earn about US$40-billion in the year to March 2008. It is estimated that this sector will achieve $60-billion in export revenue by 2009\2010. A large pool of English-speaking and well-educated workers have helped to win outsourcing contracts from firms in the U.S. and Europe. The industry contributes 5.2 per cent to the Indian economy.
SHIPS
Britain's merchant navy once ruled the waves. Since 1975, the number of UK-owned and registered vessels with a capacity of 500 gross tons or more has slumped from 1,600 to less than 300, while the number of British seamen serving on them has dropped from 90,000 to just 16,000. Some experts fear that the decline of the service will weaken Britain strategically and economically by forcing it to become dependent on foreign shipping. Britain's maritime industry is worth US$20-billion a year.
IMPORTS
According to Statistics Canada, the top foods in volume Canada imported from China in 2006 in millions of kilograms were: Mandarins, clementines and similar citrus hybrids, fresh and dried, (33.9); Frozen fish fillets, (24.4); Fresh pears and quinces, (13.6); Raw peanuts, (10.6); Frozen shrimp and prawns, (10.4); Pasta, (10.3); Mushrooms, (8.9); Other citrus fruits, (8.8) and Shrimps and prawns, prepared or preserved, (7.3).
TRAVEL
The U.S. has lost billions of dollars and an immeasurable amount of good will since the September 2001 terrorist attacks because of a decline in foreign tourists. Visits to the U.S. from countries outside Canada and Mexico totalled 21.7 million in 2006, down 17 per cent from a peak of 26 million in 2000. In the same period, cross-border travel around the world was up 20 per cent. Visits from Britain, Japan, Germany, France, South Korea and Australia have dropped 15 per cent while travel from those countries to other countries was up 39 per cent.
COPPER
South African copper exports are booming but there is little rejoicing. The trade is being fuelled by theft of copper cables that carry electricity, regularly plunging whole suburbs into darkness, stranding thousands of train passengers and wreaking havoc with the national economy. Nationally, it costs an estimated US$70-million to replace stolen cables every year and $350-million in further losses, including the impact of power outages. The Western Cape province which has no copper mines reported exports last year of $11-million.
CORN
U.S. farmers planted 92.9 million acres of corn in 2007, the largest amount of acreage since 1944 and 19 per cent more than was planted last year. Iowa continues to lead all states in total corn acres and state records were set in Illinois, Indiana, Minnisota and North Dakota. These increases are attributed to favourable prices, growing ethanol demand and strong export sales.
TRADE
The U.S. and South Korea have signed a free trade agreement, the biggest such deal for the U.S. in 15 years, though it is not certain that Congress will approve the deal. The pact eliminates nearly 95 per cent of tariffs on bilateral trade in consumer and industrial goods within three years and almost two-thirds of U.S. farm exports will be immediately duty free when the FTA is implemented. This is the biggest U.S. free trade deal since the NAFTA. However, some are concerned that the automobile provisions don't go far enough.
VENDING
Two Scottish entrepreneurs have come up with an invention that battles the humidity to keep hair straight during a night on the town. The coin-activated "Straight Up" vending machines will provide 90 seconds of hair straightening time for about the same price as a coat check at a night club. They launched the first machine in 2005 and now have more than 800 units in bars, clubs, gyms and offices.
GREEN
As part of an eco-initiative by one of Britain's largest retailers, they are now selling trousers made from 14 mineral water bottles. They are made in factories in Indonesia from recycled clear plastic bottles that have been spun into polyester in Taiwan. The trousers cost about C$40.00 and come in charcoal and navy and the crease-resistant trousers are machine washable. If they sell successfully the line could be extended to women's clothes.
COMMUTING
Seventy-seven per cent of workers in the U.S., more than 102-million people, drive alone to and from work, up from 1990. This has happened despite the fact that retail gasoline prices rose by 60 cents per gallon in the same 15-year period, adjusted for inflation. Biking is showing no gains and carpooling is also on a downward trend.
BRANDING
The Canadian Brand Index ranks the country's most recognizable brands by total value and overall strength. Topping the list is Cirque de Soleil with a brand value of C$880-million. Second is Ski-Doo, ($293-million); CBC, ($283-million); Roots, ($134-million); Toronto Maple Leafs, ($95-million) and Montreal Canadians, ($87-million).
TEENS
The market for products bought by and for the 25.6-million-member teen market in the U.S. will experience a growth spurt, increasing from US$189.7-billion in 2006 to $208.7-billion in 2011, despite an estimated three per cent decline in the 12-to 17-year-old population in the same period. Teen spending money, accumulated through paying jobs, allowances from parents and monetary gifts will increase an estimated 3.5 per cent annually.
POTASH
Global interest in biofuels has helped push prices for potash, a mineral-based fertilizer to record levels and those prices will increase further through the balance of the year. Worldwide, the three crops using the most potash per hectare planted are sugar cane, palm oil and corn. This has stepped up fertilizer use in Asia, Brazil and North America.
SEAFOOD
Overall seafood consumption in the U.S. was 16.5 pounds per person last year, up from 16.2 pounds in 2005 and 14.8 pounds in 2001. Shrimp continues to lead seafood consumption followed by Canned Tuna, Salmon and Pollock. Tilapia, a mild-tasting white fish, is now in fifth position replacing catfish which is sixth.
TEA
The hottest investment in China today is in the shape of a small, compressed cake that smells earthy and is wrapped in paper. Pu'er tea, a strong aromatic brew from Yunnan has long been prized in China for medicinal qualities. Now, instead of drinking it, millions of Chinese are hoarding it after the price jumped 50 per cent last year. Like fine wine, Pu'er tea is considered to improve with age and it is now six times more expensive than gold.
MATCHBOX
These miniature die-cast toys were a favourite of children in the 1950s and 1960s. The range of toys that flowed from it were sold in over 140 countries. At one point, Matchbox was selling two million models every week, outpacing rivals like Meccano's Dinky range by adding two new models each month. Eventually their popularity waned to be replaced by Mattel's models with friction wheels which meant they ran further and faster.
DOWNLOADS
Sales of CDs in the UK fell by 10 per cent in the first half of the year. The decline was much greater in the U.S., the world's largest music market, where sales dropped by 20 per cent. However, this decline was partially offset by the growth in digital downloads to two million units in the U.S. which left overall sales down by 9 per cent.
VACCINES
The dream of cheap, easy-to-store, needle-free vaccines is now closer to reality. Japanese researchers have created a strain of rice that protects against cholera. Edible rice vaccines could also be developed to protect against diseases such as HIV-AIDS, SARS and influenza. These rice-based mucosal vaccines offer a highly practical and cost effective strategy for orally vaccinating large populations.
TRENDS
London is to rip out more than 2,000 coin parking machines, as with rates of nearly $10.00 an hour, it is unreasonable to expect motorists to carry fistsfull of coins. Motorists will use credit or debit cards for parking. Those with a cell phone will be able to do so by text after setting up an account, with their card and car registration details. Drivers will have to text in the parking space number and the amount of time for which they wish to pay. They will be sent a text warning shortly before the time is up.
SPICES
Emerging ethnic cuisines are giving Americans a taste for bold spices from all over the globe. Spices are finding their way onto menus and specialty food products attracting new customers and even adding health promises. A key reason for the new interest in exotic spices is the shifting cultural makeup of the nation. Beyond salt and pepper, the spice market has now reached US$1.2-billion.
SPORRANS
Because of new EU regulations brought in to protect wild animals, anyone who has bought a sporran since 1994 may have to obtain a licence for them because otters and badgers, from which sporrans are made, are now protected.
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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