Euro Debt Crisis and the US Dollar
Good news and bad news this week. In the UK, lots of bank holidays, nice weather, a royal wedding and an increase in employment helped to boost the mood a bit. But dark inflation clouds hanging around on the horizon are threatening to rain on all the fun. With more price rises to come, households are seeking things out on tighter budgets and pay day cannot come quickly enough. In the Eurozone, businesses have been successful in tapping into the emerging markets, but in America, the aftermath of the Japanese earthquake is hitting production. Meanwhile Japan itself slipped back into recession – but only temporarily.
UK CPI inflation bounced back up in April. UK consumer price inflation hit 4.5%y/y in April - its fastest rate since October 2008, and up from 4.0%y/y in March. Higher air fares was the main reason as the timing of Easter and the extra bank holidays meant more people took to the skies. This is the `16th consecutive month` that inflation has been more than one percentage point above target. And it will not be the last as the Governor of the Bank of England warned us in his open letter to the Chancellor. As energy prices feed into `substantial rises` in utility bills, it’s likely to climb further still this year. Inflation could be 5%+ next month!
UK retail sales were surprisingly strong in April. Warm weather and extra bank holidays encouraged UK consumers who `stayed at home` to spend a bit more. Retail sales volumes (excluding automotive fuels) rose by 1.2%m/m in April, a dramatic pick up in pace from March's 0.4%m/m growth. Not surprisingly food (2.2%m/m) and clothing (3.2%m/m) sales were strong, but household goods stores suffered. A 3.5%m/m fall in volumes in this sector shows discretionary spending is being cut back. This boost to spending is likely to be a bit of a treat before more tougher times ahead. Rapid rise in fuel and food prices on their way!
Good news in the UK labour market. Unemployment over the three months to March fell by 36,000 to 2.46 million bringing the rate down to 7.7. The claimant count measure increased sharply, but this was distorted by a change in the benefit rules. Employment rose by 118,000 in the quarter boosted by an increase in full-time jobs. All this is nice, but the total number in employment is still 332,000 below the pre-crisis peak. More unemployment to come over the summer months!
Wage growth remained low, but there are signs of stress. Average earnings growth is still pretty flat. Excluding bonuses, wages rose by just 2.1%y/y in March, down from 2.2%y/y in February. But there are real signs of stress on households’ budgets. The Bank of England’s Agents have picked up evidence of an increasing concentration of retail sales around pay days and shoppers making smaller, more frequent cash, rather than credit, purchases. All this signals that households are really feeling the pinch and trying to stick to budgets. It's clear that pay day cannot come quickly enough. Bankers not included due to them receiving big bonuses again!
Eurozone trade moved back into the black in March. The Eurozone trade balance moved into surplus in March, for the first time since October. Exports of machinery, vehicles and other manufactured goods did well over the last year as Eurozone economies tapped into emerging market demand. Exports to China rose by 34%y/y and to Russia by 44%y/y. This rebalancing towards faster growing emerging economies is just what UK industry also needs to achieve to help drive the recovery more firmly.
US industrial production stalled and capacity utilization fell in April. The after effects of the Japanese earthquake hit US industrial production in April. Output was flat, as manufacturing production, which has been rising for the last nine months, fell 0.4%m/m. The fall was because of parts shortages in the automotive sector due to interruptions in the supply chain from Japan. Capacity utilization was also weaker than expected in April. It declined to 76.9% from 77% in March.
The Fed is looking at strategies to exit easy monetary policy. There are no signs that the Fed is thinking about increasing interest rates just yet, but it is thinking about how it will unwind the easy monetary policy. The US economy is still weak but the Fed has made clear that there would need to be a big change in the economic outlook to warrant further asset purchases. So the indication that it will ‘ease up the easing’ in a modest way is important to market confidence.
Japan falls back into recession. The Japanese economy contracted by 0.9%q/q Q1 2011 after a 0.8%q/q fall in Q4 2010. This translates to an annualised contraction of 3.7%. The decline was bigger than anticipated, even taking the recent tragedy into account, but the full impact on the economy won’t be known for some time yet. On a more positive note, Japan's recession should be temporary, as reconstruction work in particular will boost growth in the second half of 2011
Euro trashed as debt crisis hammers EU
The European debt crisis deepened today as Greece sank further into the mire and the fight to replace the current debt! Will there be more debt to follow?
Borrowing costs in Europe`s weakest economies soared and the euro tumbled on another torrid day for the `single` currency. Greece was hammered by yet another downgrade to its already depleted credit rating amid fears it cannot repay its debts. Fitch cut its rating on Greek debt three notches, form BB+ to B+. and gave it a `negative` out-look, meaning further downgrades could follow very soon. The agency said it `reflects the scale of the challenge facing Greece` to repair its battered finances, stave off bankruptcy and lay the ground for `sustained economic recovery`. The yield on Greece`s ten-year bond - the interest the government pays to borrow money - raced to a record high of 16.75%. The equivalent yield in Britain is 3.35% and in Germany 3.05%.
The `dumping` of Greek bonds spread to other debt-ridden nations including Portugal, Ireland and Spain, where the prospect of regional elections caused further jitters globally. With Greece`s debt problems getting worse not better, there are now open disagreements over how to tackle the on-going crisis not just in Greece, but in Ireland, Portugal and yes, Spain!
The leadership vacuum at the top of the IMF - following Strauss-Kahn`s resignation has only added to worries about the Eurozone. The person widely seen as the favourite to take over the IMF is the French Finance Minister Christine Lagarde, although former UK Premier Gordon Brown is lobbying hard as well.
£1 billion scandal of Gold Card on the taxpayer each year - and how long has this been flushing?
UK ministers are on collision course with `top mandarins` over an extraordinary demand for them to publish their credit-card statements to prove they have not been abusing their expenses. More than `140,000, yes 140,000 `procurement cards` - credit cards embossed with the words `HM Government UK` have been handed out to staff who are using them to spend more than £1 billion of public money `every year` - where is this money being spent? Bills of less than £1,000 a month are not routinely audited, do we have a repeat of the MP expenses on a larger scale? Is the system being abused? Report `all` expenditure and let us see!
NHS scandal of £3 billion each year being `fiddled` by white collar workers! More to come soon.
UK Loses £27 billion `every year` due to cybercrime
Cybercrime is costing the UK economy £27 billion every year with businesses being the most affected, according to a UK Government report on the integrity of computer systems and the treat of industrial espionage. UK businesses lose £21 billion while individual Britons and the UK Government both lose £3.1 billion each. The UK Cabinet Office which commissioned the report said that the real loss could be `higher`! Loss through intellectual property (IP) theft amounts to £9.2 billion, industrial espionage is£7.6 billion and extortion £2.2 billion. What is the truth? Is the figure higher than reported?
Global Information of Importance
InfoTrends Offers Worldwide View of Managed Print Services Market
Global Forecast Shows Growth through 2014 in Print
According to InfoTrends projections, the revenue opportunity for Managed Print Services (MPS) on a global basis is expected to grow from $12.3 billion in 2009 to $25.5 billion in 2014. All regions will demonstrate double-digit increases with Asia Pacific showing the strongest potential with an 18% compound annual growth rate.
“Over the past five years, MPS have been the biggest phenomenon in the office equipment industries of the United States and Western Europe,” commented Randy Dazo, Director of InfoTrends’ Managed Print Services consulting group. “Almost every equipment manufacturer has banked on a MPS strategy to drive new business, and for the foreseeable future, this will be a lucrative investment.”
In North America the MPS revenue opportunity is expected to increase from $5.9 billion in 2009 to just over $12 billion in 2014 demonstrating a 15% compound annual growth rate. In Western Europe, MPS will experience a similar growth rate of 16% by 2014.
Dazo continued, “For geographies outside of the U.S. and Western Europe, however, the MPS opportunity is quite different. The value proposition of cost-cutting and device optimization may not be relevant in developing areas – particularly those that are on an IT spending spree. That doesn’t mean MPS should not be explored in these regions. In fact, our forecast shows that Asia Pacific, Central & Eastern Europe, Africa, and Latin America will all show growth potential. What it does mean is that MPS strategies should be adjusted to address the idiosyncrasies of each region.”
To provide a better understanding of the Global Managed Print Services opportunity, InfoTrends is offering new regional forecasts focused on Asia Pacific, Central/Eastern Europe & Africa, and Latin America. This is in addition to the traditional forecasts for North America and Western Europe. A worldwide rollup of the regions is also available. Each excel pivot table provides the flexibility to view the market data by country, MPS segment (supplies only, hardware optimization, and enhanced), category (hardware, services, solutions & supplies), channel (OE dealer, OEM direct, professional services/facilities management, supplies, IT/VAR/MSP) and company size (small, medium, & large).
The countries covered in each region include:
· Asia Pacific – includes Japan, China, India, Australia, S. Korea, Singapore and ROAP
· Central, Eastern Europe & Africa – includes Russia, UAE, Turkey, Poland, and ROCEEA
· Latin America – includes Brazil, Mexico, Argentina, Colombia and ROLA
· North America – includes U.S. and Canada
· Western Europe – includes UK, Germany, France, Italy, Spain, Nordic and ROWE
· Worldwide – includes all regions and countries listed above
“We want to continue to provide our clients with the highest level of support for marketing, product planning, and product development. By offering additional levels of regional detail we can help meet those needs. With regions experiencing different growth rates, having individual breakouts will provide the financial, statistical, and qualitative information needed for effective short- and long-term strategic planning.”
`It`s a Digital Future`- Strategies for Success in Digital Printing
Thinking of investing in digital printing but not sure how you are going to make money out of it? Already invested and are looking for new income streams? Either way you should not miss the powerful information on the CD with over 720 pages on `It`s a Digital Future` the strategies for success in Digital Printing - http://www.cavendish-mr.org.uk to order your copy from the publications page.
Conclusions from the Report
Digital printing is on a solid growth track. In addition to its steady growth as a sales opportunity, we are seeing rapid, consistent growth in digital printing and black-and-white and colour copying volumes, as well as significant plans to invest in additional digital printing units, whether as upgrades or as additional capacity. Both printers and their customers are consistently showing growth in their use of key applications like Web-to-print, variable data printing, and short-run digital printing.
Key to growth in the digital printing marketplace is the diversity of press sizes, speeds, and price ranges in the equipment market, reducing the barrier to entry and making digital production affordable in production environments of all sizes and volumes. The data clearly show that the line of demarcation, in terms of size, between serious players and those whose budgets are too restricted to do anything but dabble, have all but disappeared.
`The European Printing Industry and the Impact of China on the World`
Over 115 pages of market data covering the following areas;
`All` EU countries and comprehensive details on the five major printing countries in Europe
The potential market size to 2010 worldwide
EU Statistics and Cavendish views on the potential market
A practical report using knowledge of the industry
Key findings that will influence your decisions on future investments
Introduction to the future success for your company
The Current State of the Printing and Graphics Arts Industry and the future
The Challenges for the Printing Industry to be successful
European Key Information
A Further View on the European Printing Industry and the challenges
The China Syndrome and the Impact on the World
This report is the result of a fresh in-depth analysis and evaluation of the state of the printing industry in Europe and the impact of China on the world and reveals how the landscape of this sector has been evolving dramatically over the last few years.
Printing continues to grow significantly year on year, fuelled primarily with China and the other Asia countries, enabled increasingly by the internet as well as a varity of other driving forces.
The report is very comprehensive with 115 pages, yet easy to navigate as carefully structured with detailed Table of Contents.
`The European Printing Industry and the Impact of China on the World` is available for immediate purchase by visiting the secure Cavendish eStore online a to www.cavendish-mr.org.uk - customers can download this report in PDF Acrobat format immediately after purchase.
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Euro Debt Crisis and the US Dollar!