July 2012 Edition
FARMERS
Despite the economic downturn, Britain's farmers have been enjoying a boom in business. Government figures show the agriculture and horticulture sector of the economy grew by 25 per cent last year. Farmers are now selling more produce overseas and it now represents the UK's fourth largest export sector. The gross value added contribution that farmers and growers made to the economy grew by US$3.5-billion to $12-billion.
AFRICA
Plans are on track to create a 26-nation free-trade area by integrating three existing African trade blocs. The East African Community, the Common Market for Eastern and Southern Africa and the Southern African Development Community aim to create a free market of 525-million people with an output of US$1-trillion. Although African economies are growing fast, the continent has attracted criticism over its slow pace of integration.
GOLF COURSES
In the past few years, the development of hundreds of golf courses in the U.S. was abandoned, victims of the foreclosure crisis. Many of those closed were tied to grand real estate development plans and it is predicted that as many as 1,500 courses will close over the next decade. Now, thousands of acres of golf greens, ponds and clubhouses sit abandoned, slowly decaying, dragging down neighbourhood property values along with them. Those who bought property along the courses are forced to watch the formerly manicured lawns grow out of control bringing a range of nuisances, from exotic animals to illegal activity.
BAGS
U.S. airlines' revenue from bag fees fell last year for the first time, because of fewer people travelling. The 17 largest airlines made US$3.36-billion down from $3.4-billion in 2010. The total number of passengers last year on those airlines fell by about 1.5 per cent. Fees for first and second checked bags began four years ago when fuel prices soared to all-time highs and revenue has climbed ever since. Between 2008 and 2009, money from bags jumped by 42 per cent and from 2009 to 2010 by 24 per cent. Delta Airlines made more than any of its peers last year earning over $863-million in fees.
TURBINES
A giant subsea turbine which uses tidal power to generate electricity has successfully completed initial tests off Orkney. The turbine was lowered into position during winter storms and is performing well to a very high standard. Scotland has the best tidal power resources in Europe. It is expected that all the machines for this project will be installed between 2013 and 2015.
KNIVES
The multifunctional Swiss Army knife has been recognized worldwide for almost 130 years. The knife is also supplied to the German and 10 other armies. The company makes 35,000 knives each day and has diversified into watches and luggage and today 50 per cent of sales are from new product categories. Some products now offer USB memory sticks. After 9/11, sales of the Swiss Army knife dropped by almost 30 per cent but the company leased workers to other companies while continuing to pay their wages and no worker was made redundant for financial reasons.
SALES
Health Canada has reminded Canadians that garage sales now face the same responsibilities as legitimate retailers when it comes to screening for banned or unsafe products. Everyone holding a garage sale in Canada is legally responsible for ensuring products sold or even given away, whether new or used, are safe and meet current safety standards. According to the Health Canada website, a garage sale is effectively breaking the law if it includes lawn darts, corded blinds, broken toys, toys with powerful magnets, hockey helmets, tiki torches or any product that has been the subject of a recall.
PIRACY
The value of computer software piracy in Canada was estimated to be C$1.1-million last year with 40 per cent of computer users admitting they acquired software illegally. A Business Software Alliance study found that nearly one in three copies of software was unlicensed in Canada in 2011. The study also found that admitted software pirates in Canada were predominantly male between the ages of 25 and 34.
SURGERY
China performs more cosmetic surgery than any country except the U.S. and Brazil. The market, which barely existed 15 years ago, is now worth some US$2.4-billion. China's growing wealth and obsession with celebrity is fuelling the growth. The People's Ninth Hospital in Shanghai is that city's busiest for cosmetic surgery. There were 50,000 operations in 2011, a 50 per cent increase in five years. The three most common procedure are double eyelid surgery, liposuction and nose jobs. As many as 70 per cent of China's cosmetic procedures take place in illegal, unlicensed salons.
COMMODITIES
The price of iron ore, the main component of steel, recently fell below US$140 a tonne. Canada exported C$3.35-billion of iron ore in 2010 which is ranked sixth in value among metals and minerals exported by Canada. It is estimated that 2.8-billion tonnes of iron ore were mined globally in 2011.
3M
This giant 110-year old conglomerate is one of the world's most complex manufacturing enterprises. It is estimated that 3M makes 65,000 products, ranging from Scotch tape to film for solar-energy panels, dental braces and dog chews. They are produced in 214 plants, in 41 countries. 3M's long term plan is to have fewer, larger, more efficient plants and spread them out around the world. 3M now has 10 manufacturing hubs, including six in the U.S. and one each in Singapore, Japan, Germany and Poland. and gets nearly two-thirds of its sales outside the U.S.
FARMS
The 2011 Canadian Agricultural census shows that while the number of farms has decreased 10 per cent in the last five years to 205,730, the average farm size has jumped seven per cent. In some regions, such as Saskatchewan, the number of farms has fallen nearly 17 per cent, while average farm size is up 15 per cent to more than 1,600 acres. Farms with $1-million or more in annual revenue represent the fastest growing sector of Canadian agriculture, jumping 36 per cent since 2006. Just 9,602 farms generate 49 per cent of Canada's $51-billion in total gross farm receipts.
QUINOA
Peruvians used to look down on quinoa, a fixture of Andean diets for centuries as food for the poorest of the poor. However, thanks to the growing global demand for organic foods, this protein-rich chenopod, a member of the spinach family, earned Bolivia US$6.4-million from quinoa exports in 2011, 36 per cent more than in 2010. Peru earned $23-million where production has risen from 7,000 tonnes a year in the 1980s to 42,500 tonnes last year.
MEAT
Fifty years ago, global consumption of meat was 70-million tonnes. By 2007, the latest year for comparable data are available, it had risen to 268-million tonnes. The amount of meat eaten by each person leapt from about 22kg in 1961 to 40kg in 2007.Tastes have changed however. Cow (beef and veal) was top of the menu in the early 1960s, accounting for 40 per cent of meat consumption, but in 2007 its share had fallen to 23 per cent. Pig is now the animal of choice, with around 99-million tonnes consumed and poultry has jumped from 12 per cent to 31 per cent of the global total.
ADS
Canada's broadcast regulator has been asking TV providers to turn down the noise in loud commercials and is now making it an order. Rules have now been published controlling the volume of commercial messages for companies that own TV channels, distribution systems such as cable and satellite services, and video-on-demand offerings must follow. The TV industry must have the loudness under control by September at the start of the new TV season.
COFFEE
A mutant strain of one of the world's most devastating coffee diseases is attacking crops in Guatemala, putting farmers on high alert for a wider outbreak in Central America. Growers are battling a new form of leaf rust fungus, or roya, which kills leaves on coffee trees and makes the weakened plants less productive. Leaf rust usually infects coffee grown at lower altitudes where it is hotter and wetter but a new variety is creeping up to the higher, cooler areas.
GAS
The U.S. is still pumping three billion more cubic feet of natural gas each day than it can consume. The country has become awash in it since "fracking' (hydraulic fracturing of gas bearing shale deposits) began barely five years ago. The price has plummeted from US$8.00 per thousand cubic feet to $2. Not long ago natural gas was a tenth of the price of oil, now it is 50th. If production continues at the present rate, all the storage reservoirs in the U.S. will be full by the Fall.
LUMBER
In 2011, led by British Columbia, Canada emerged as the largest exporter of lumber in the world to China, surpassing Russia as China's leading source for lumber. The trend has continued in 2012. In the first quarter of 2012, Canada supplied 1.45-million cubic metres (about 900-million board feet) corralling 47 per cent of the market share for softwood lumber in China. Russia is second at 35 per cent. China now accounts for 26 per cent of Canadian lumber exports while the U.S. accounts for 63 per cent.
SOLAR
The world's solar power generating capacity will grow between 200 and 400 per cent over the next five years, with Asia and other emerging markets overtaking leadership from Europe. The fastest growth is expected in China and India, followed by Southeast Asia, Latin America and the Middle East.
MOVIES
China is now the world's second-biggest film market after America. It has a booming home-grown film industry making historical dramas and romantic comedies, but foreign blockbusters are the big money-earners. Last year, China's box-office take rose more than 30 per cent, to over US$2-billion. The number of cinema screens in China has doubled in five years, to nearly 11,000, again, second only to America and revenues may overtake the States by 2020. China will still not grant Hollywood the access it desires. Only 34 foreign films may be shown in China each year.
DIGITAL
Sales of e-books grew by 54 per cent in 2011 and are now worth US$365-million to the publishing industry. In 2007, the market for e-books, downloads and online subscriptions was worth $111-million. Digital content now accounts for 8 per cent of the total value of book sales in 2011. The total value of the book market is estimated to be $4.8-billion. In the UK, the number of book stores halved in the last six years with roughly 2,000 shops closing since 2006.
SIZE
A duplex penthouse at a tower under construction on Manhattan's West 57th Street has sold for more than US$90-million, setting a record for a single residence in the borough. The 11,000 square-floor unit, spanning the 89th and 90th floors sold at a price between $8,000 and 9,000 a square foot.
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
Posts
