globalEDGE Blog - Page 49

Tomorrow is one of the biggest consumer holidays after Christmas: Valentine’s Day. It is celebrated in eight countries: the United States, Canada, Mexico, the United Kingdom, France, Australia, Denmark, and Italy. And it’s not just for those in relationships anymore; many people are purchasing gifts for their friends, family, and pets. So, with all these purchases, the economy goes into a small boom.

There has finally been a development in one of the largest international stories of the last decade. Ever since the vote to leave the European Union in the 2016 referendum, the United Kingdom has been in the process of planning its departure. After numerous delays, the early general election was held in December of 2019. The Conservative Party, which ran on the promise of delivering Brexit, dominated the election, gaining the majority of Parliament. With this newfound Conservative majority, the United Kingdom officially left the European Union on January 31st. This made them the first country to leave the European Union, after having been a member for 47 years.

China currently has a Coface rating of B for Country Risk and B for Business Climate. With high levels of foreign exchange reserves, there is a very low level of the overall risk of over-indebtedness, and the structure of a highly competent service industry with reliable infrastructure makes the market potential, comprised of several key factors, in China even stronger. However, it cannot be denied that investing in China as a manufacturing firm is beneficial but leaves the risk of counterfeiting and intellectual property violations on account of a collectivistic culture.

Ships, trains, houses, manufacturing and power plants—each have used, or currently uses, coal as its main fuel source.  Coal has long been one of the world’s top energy sources, acting as the base of nearly 30 percent of the energy created across the globe and almost 40 percent of global electricity production.  However, after Murray Energy Corporation became the eighth coal company on October 29th, 2019 to declare bankruptcy in the past 14 months, there appears to be a significant downturn occurring within the industry.  Murray Energy is the largest privately held coal company in the United States and joined seven other companies within the industry, including Cloud Peak Energy and Westmoreland Mining, in filing for bankruptcy. 

For the past 7 quarters, the global manufacturing industry’s main concern has been labor shortages. These shortages are due in large part to a lack of workers with technical skills. Other factors include increasing retirement rates, growing complexity in the global supply chain, and academia. The global manufacturing labor shortage could exceed 8 million people by 2030, resulting in a possible revenue loss of $607 billion. Countries that already struggle with shortages are expected to get worse. Over the next 20 years, Hong Kong’s shortage of manufacturing workers will equate to nearly 80% of its industry workforce.

The biggest international storyline of 2020 thus far has been the mysterious coronavirus.  The illness that is believed to have started in Wuhan, China has led to over 6,000 reported cases—and 360 deaths—in China.  Individuals have also been reported to have contracted the illness in 13 other countries, including the U.S., Australia, and Germany.  This past Thursday, the World Health Organization (WHO) declared the coronavirus outbreak as a global public health emergency.  With fears intensifying by the day, China and the WHO are working on solutions to protect both foreigners and Chinese people from the illness.  Many of the efforts have been centered around tightening travel security to and from China, halting business operations in China, and quarantining any potentially infected patients.

The Wall Street Journal recently released an article stating the number of women in the United States workforce has surpassed the number of men as of December 2019, making women the majority of the workforce.  The article credited much of this shift to the growth of service industries such as healthcare, where females are employed in higher numbers.

2019 was a turbulent filled year for many airlines, while others seemed to have smooth flying all year. Two of the main contributors to the success of airlines this year were the companies’ ability to schedule flights around bad weather and compliance between employees and a company’s management.

An underground controversy right now is the tariff laws surrounding cherries. The cherry market is seeing a trend that many other states and countries are dealing with, specifically in dried cherries that are used for canning and juice. The decision made on this product could affect how the United States deals with foreign imports on a global scale.

China is currently undergoing its worst pork crisis. Since recognized in August of 2018, the African swine fever, the epidemic that has caused the total pig population to shrink by around 130 million, or more than 40%, has caused an estimated $140 billion in direct losses as of December 2019. The spread of the disease sent pork prices skyrocketing. China’s inflation reached a nearly eight-year high in November after pork prices soared 110% year-on-year. This even led to the culling of almost 1.2 million pigs to stop the spread of the virus, which is highly contagious and fatal in pigs. China produced 54 million tons of pork in 2018, according to official statistics, but was expected to produce only 40 million tons in 2019. Rabobank, the Dutch financial services company, estimates Chinese pork production will fall further to 34 million tons in 2020. Although the disease has been devastating for China, it is the opportunity of a lifetime for pork producers outside of the country.