Los distintos países de Sudamérica afrontan 2015 con marcadas diferencias, como señala el último informe sobre la región distribuido por Crédito y Caución. Chile y Argentina, dos mercados que reciben una cantidad muy similar de exportaciones españolas pero muy distinta tendencia, ejemplifican los dos extremos de esta realidad continenta
The global economy effects on commodity dependent countries like zambiaKampamba Shula
On the 17th of November 18, 2016 I made a presentation at the FNB Financial Journalism academy on “The Global Economy Effects on Commodity dependent countries like Zambia”. It was well received. Below are some of the highlights
One of the most burning issues that have dominated the public sphere in Nigeria and other oil exporting countries is the covid-19 pandemic and its attendant challenges. This pandemic is a shock on real economic fundamentals and frictionless of the market. It introduces a barrier between the market forces with strong complementary feedbacks in the real economy. The absence of precise vaccine or medication for the virus has necessitated the adoption of several precautionary measures with the aim of containing its wide spread. Critical among which are the travel restrictions, lockdown measures as well as social and physical distancing. These measures have detrimental effect on the demand and price of oil in the international market. In view of that, this study evaluates the social and economic impact of covid-19 in Nigeria taking into cognisance the effect on certain critical macroeconomic indicators. The study adopted an analytical approach to supplement the much ongoing documentations on the subject matter. Result shows that virtually all essential macroeconomic indicators are grossly affected with tax, remittances and employment exhibiting severe consequences. Also, uncertainty, panics and lockdown measures are key to motivating higher decrease in world demand. The supply disruptions and huge death toll generates a heightened uncertainty and panic for household and business. This uncertainty and panic leads to drop in consumption and investment thereby causing a decrease in corporate cash flows and triggered firm’s bankruptcy. Also, lay-off and exiting firms produce higher unemployment while labour income decreased significantly. Since it entails a large amount of government expenditure especially in the health sector which is required to contain the spread of the virus, there is needs for government to diversify its revenue sources and thus drop over dependency on the oil remittance. Furthermore, there is a need to support the financial system to avoid the health crisis becoming a financial crisis in the long-run.
Los distintos países de Sudamérica afrontan 2015 con marcadas diferencias, como señala el último informe sobre la región distribuido por Crédito y Caución. Chile y Argentina, dos mercados que reciben una cantidad muy similar de exportaciones españolas pero muy distinta tendencia, ejemplifican los dos extremos de esta realidad continenta
The global economy effects on commodity dependent countries like zambiaKampamba Shula
On the 17th of November 18, 2016 I made a presentation at the FNB Financial Journalism academy on “The Global Economy Effects on Commodity dependent countries like Zambia”. It was well received. Below are some of the highlights
One of the most burning issues that have dominated the public sphere in Nigeria and other oil exporting countries is the covid-19 pandemic and its attendant challenges. This pandemic is a shock on real economic fundamentals and frictionless of the market. It introduces a barrier between the market forces with strong complementary feedbacks in the real economy. The absence of precise vaccine or medication for the virus has necessitated the adoption of several precautionary measures with the aim of containing its wide spread. Critical among which are the travel restrictions, lockdown measures as well as social and physical distancing. These measures have detrimental effect on the demand and price of oil in the international market. In view of that, this study evaluates the social and economic impact of covid-19 in Nigeria taking into cognisance the effect on certain critical macroeconomic indicators. The study adopted an analytical approach to supplement the much ongoing documentations on the subject matter. Result shows that virtually all essential macroeconomic indicators are grossly affected with tax, remittances and employment exhibiting severe consequences. Also, uncertainty, panics and lockdown measures are key to motivating higher decrease in world demand. The supply disruptions and huge death toll generates a heightened uncertainty and panic for household and business. This uncertainty and panic leads to drop in consumption and investment thereby causing a decrease in corporate cash flows and triggered firm’s bankruptcy. Also, lay-off and exiting firms produce higher unemployment while labour income decreased significantly. Since it entails a large amount of government expenditure especially in the health sector which is required to contain the spread of the virus, there is needs for government to diversify its revenue sources and thus drop over dependency on the oil remittance. Furthermore, there is a need to support the financial system to avoid the health crisis becoming a financial crisis in the long-run.
Economic impact of COVID-19 lock down on small medium enterprise (smes) in la...SubmissionResearchpa
The effect of COVID-19 has negative consequence which has been an invisible enemy raging the entire world populace leading to a global economic crisis. Business across the globe are feeling the negative outcome of the COVID 19 pandemic threatening their ongoing economic daily activities. SMEs in Nigeria are not left out in the share of this negative pandemic, limiting their survival existence. The shutdown of economic activities has greatly affected SMEs in Nigeria. This has led to employees under SMEs lose their jobs. It was concluded that adequate measures needs to be taken by government to cushion the negative effect of COVID 19 in collapsing the existence of SMEs. by Aribisala, and Oluwadamilare Olufolarin 2020. Economic impact of COVID-19 lock down on small medium enterprise (smes) in lagos state. International Journal on Integrated Education. 3, 7 (Jul. 2020), 62-68. DOI:https://doi.org/10.31149/ijie.v3i7.490. https://journals.researchparks.org/index.php/IJIE/article/view/490/467 https://journals.researchparks.org/index.php/IJIE/article/view/490
Lyes Boudiaf. Founder & President of Isly Holdings. Algeria. Lyes Boudiaf has been decorated as knight of the honorary Order of Merit of the State of Portugal
www.lyesboudiaf.com #lyesboudiaf
Mercer Capital's Value Focus: Construction and Building Materials | Q1 2020 |...Mercer Capital
Mercer Capital's Construction Industry newsletter provides a broad range of specialized valuation and transaction advisory services to the construction industry, including residential, commercial, civil, paving, concrete, and more. Each issue includes a segment focus, market overview, mergers and acquisitions review, and more.
Relatorio Portugal 2013 by Credito Y CaucionJoão Pinto
Crédito y Caución prevé em 2013 menos crescimentos e mais exportações em Portugal
Os sectores particularmente expostos à crise são os da madeira, construção e móveis e utensílios e acessórios, ferro e aço, retalho, electrónica e electrodomésticos.
A presentation of the main findings and recommendations of the OECD Economic Survey of Spain 2014 launched 8 September 2014 in Madrid, Spain.
Structural reforms (labour market, banking, fiscal) have put the economy on the road to recovery.
The saturday economist manufacturing update October 2015John Ashcroft
Overall manufacturing output remains some 7% below the pre recession peak and in line with levels experienced at the end of 1989. We expected too much from manufacturing in the rebalancing agenda. The average rate of growth since 1950 has been just 1.5% hence the share of output decline in an economy growing at 2.5% plus.
Hopes for a manufacturing rally were rhetoric without reason. The prospect of re shoring was illusory as the plans for Jaguar Land Rover to expand output overseas demonstrate. The UK does not have a revealed comparative advantage in manufacturing to stimulate export growth. The balance of payments trade in goods will continue to deteriorate despite some improvement this year from international energy, oil and commodity prices.
The UK does have a varied manufacturing base, with real strengths in transport, food, drink and capital goods. The sector can only achieve so much in international trade and will offer so little to the rebalancing agenda. We should not expect too much from our manufacturers.
This was my dissertation on the efficiency of the capital markets in developing countries compared to those in developed countries. The results came conclusive that there is insider trading present regardless of the territory of the capital market.
Economic impact of COVID-19 lock down on small medium enterprise (smes) in la...SubmissionResearchpa
The effect of COVID-19 has negative consequence which has been an invisible enemy raging the entire world populace leading to a global economic crisis. Business across the globe are feeling the negative outcome of the COVID 19 pandemic threatening their ongoing economic daily activities. SMEs in Nigeria are not left out in the share of this negative pandemic, limiting their survival existence. The shutdown of economic activities has greatly affected SMEs in Nigeria. This has led to employees under SMEs lose their jobs. It was concluded that adequate measures needs to be taken by government to cushion the negative effect of COVID 19 in collapsing the existence of SMEs. by Aribisala, and Oluwadamilare Olufolarin 2020. Economic impact of COVID-19 lock down on small medium enterprise (smes) in lagos state. International Journal on Integrated Education. 3, 7 (Jul. 2020), 62-68. DOI:https://doi.org/10.31149/ijie.v3i7.490. https://journals.researchparks.org/index.php/IJIE/article/view/490/467 https://journals.researchparks.org/index.php/IJIE/article/view/490
Lyes Boudiaf. Founder & President of Isly Holdings. Algeria. Lyes Boudiaf has been decorated as knight of the honorary Order of Merit of the State of Portugal
www.lyesboudiaf.com #lyesboudiaf
Mercer Capital's Value Focus: Construction and Building Materials | Q1 2020 |...Mercer Capital
Mercer Capital's Construction Industry newsletter provides a broad range of specialized valuation and transaction advisory services to the construction industry, including residential, commercial, civil, paving, concrete, and more. Each issue includes a segment focus, market overview, mergers and acquisitions review, and more.
Relatorio Portugal 2013 by Credito Y CaucionJoão Pinto
Crédito y Caución prevé em 2013 menos crescimentos e mais exportações em Portugal
Os sectores particularmente expostos à crise são os da madeira, construção e móveis e utensílios e acessórios, ferro e aço, retalho, electrónica e electrodomésticos.
A presentation of the main findings and recommendations of the OECD Economic Survey of Spain 2014 launched 8 September 2014 in Madrid, Spain.
Structural reforms (labour market, banking, fiscal) have put the economy on the road to recovery.
The saturday economist manufacturing update October 2015John Ashcroft
Overall manufacturing output remains some 7% below the pre recession peak and in line with levels experienced at the end of 1989. We expected too much from manufacturing in the rebalancing agenda. The average rate of growth since 1950 has been just 1.5% hence the share of output decline in an economy growing at 2.5% plus.
Hopes for a manufacturing rally were rhetoric without reason. The prospect of re shoring was illusory as the plans for Jaguar Land Rover to expand output overseas demonstrate. The UK does not have a revealed comparative advantage in manufacturing to stimulate export growth. The balance of payments trade in goods will continue to deteriorate despite some improvement this year from international energy, oil and commodity prices.
The UK does have a varied manufacturing base, with real strengths in transport, food, drink and capital goods. The sector can only achieve so much in international trade and will offer so little to the rebalancing agenda. We should not expect too much from our manufacturers.
This was my dissertation on the efficiency of the capital markets in developing countries compared to those in developed countries. The results came conclusive that there is insider trading present regardless of the territory of the capital market.
Check a comprehensive list of MBA dissertation topics on various fields. Start your MBA thesis with a great topic. Visit: http://www.mbadissertation.org/
Mercer Capital's Value Focus: Auto Dealer Industry | Mid-Year 2015Mercer Capital
Mercer Capital's Auto Dealer Industry newsletter provides perspective on valuation issues. Each newsletter also includes a macroeconomic trends, industry trends, and guideline public company metrics.
Global growth is moderatng as the recovery in trade
and manufacturing actvity loses steam. Despite
ongoing negotatons, trade tensions among major
economies remain elevated. These tensions, combined
with concerns about sofening global growth prospects, have weighed on investor sentment and contributed to
declines in global equity prices. Borrowing costs for
emerging market and developing economies (EMDEs)
have increased, in part as major advanced-economy
central banks contnue to withdraw policy
accommodaton in varying degrees. A strengthening
U.S. dollar, heightened financial market volatlity, and
rising risk premiums have intensified capital outlow
and currency pressures in some large EMDEs, with
some vulnerable countries experiencing substantal
financial stress. Energy prices have fluctuated markedly,
mainly due to supply factors, with sharp falls toward
the end of 2018. Economic actvity in the Euro Area has
been somewhat weaker than previously expected,
owing to slowing net exports. EMDE growth edged
down to an estmated 4.2 percent in 2018 as a number
of countries with elevated current account deficits
experienced substantal financial market pressures and
appreciable slowdowns in actvity. In low-income
countries (LICs), growth is firming as infrastructure
investment contnues and easing drought conditons
support a rebound in agricultural output.
OECD: The impact of the Covid-19 outbreak on economic (Presentation)chaganomics
The impact of the Covid-19 outbreak on economic prospects is severe Growth was weak but stabilising until the coronavirus Covid-19 hit. Restrictions on movement of people, goods and services, and containment measures such as factory closures have cut manufacturing and domestic demand sharply in China. The impact on the rest of the world through business travel and tourism, supply chains, commodities and lower confidence is growing.
Atradius Country Report - United States – April 2014Salih Yilmaz
Atradius country reports are designed to support you in trading safely abroad. Our overviews give you short, concise information on large Western economies´ economic performance and insolvency development and on main emerging markets´ current political and economical situation and outlook.
Az eddig beérkezett adatok alapján akár 5%-kal is nőhetett a hazai GDP az első negyedévben. Az év első felében nagyon erős dinamikára számítunk, a második félévben azonban az egyre intenzívebb import-kereslet és bázishatás miatt már lassulni fog a gazdaság bővülése, 2019-ben pedig 3%-ig mérséklődhet a növekedési ütem.
• Indian economy grew @5.3% in Jul-Sept 2014 quarter (YoY), lower than the 10-quarter high of 5.7% recorded in the previous quarter, but better than 4.7% in FY14 (Apr'13-Mar'14)
• Slow down due to lower Industrial (@ 2.2%) and Agricultural (@ 3.2%) growth during the quarter. But services sector grew @ 7.1%
• Private spending grew at 5.8%; Fixed Capital formation was flat; Government expenditure expanded @ 10.1%
• Economy is expected to grow @ 5.5% in FY15 and 6.5% in FY16 (FY:Apr-Mar)
• New government's policy decisions key to growth revival; Central bank is expected to cut policy rates by early CY2015
Barómetro de CEPYME #LaPymeHabla de julio, la #morosidad es una de las principales preocupaciones para el 20% de las empresas que han participado en el estudio
Enlace a post publicado en Linkedin sobre el apoyo estatal al sector del seguro de crédito.
https://www.linkedin.com/pulse/aseguradoras-de-cr%C3%A9dito-unespa-consorcio-seguros-cubillo-fleming/?published=t
Informe realizado por ATA ( Federación Nacional de Asociaciones de Trabajadores Autónomos ) sobre el seguimiento de los plazos de cobro de las diferentes administraciones públicas (local, regional y nacional)
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
2. 2
Contents Canada Page 3
Mexico Page 6
USA Page 10
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3. 3
Key indicators 2012 2013 2014 2015* 2016**
Real GDP (y-on-y, % change) 1.9 2.0 2.4 1.0 2.0
Consumer prices (y-on-y, % change) 1.5 0.9 1.9 1.2 2.1
Private consumption (y-on-y, % change) 1.9 2.5 2.7 1.9 2.2
Retail sales (y-on-y, % change) 0.9 2.2 2.6 1.0 0.9
Industrial production (y-on-y, % change) 1.4 1.8 4.1 -1.3 0.1
Unemployment rate (%) 7.3 7.1 6.9 6.9 6.8
Real fixed investment (y-on-y, % change) 4.8 0.4 0.2 -2.7 -0.3
Exports of goods and non-factor services
2.6 2.0 5.4 2.0 4.0
(y-on-y, % change)
Fiscal balance (% of GDP) -3.1 -2.7 -1.6 -2.0 -1.4
Government debt (% of GDP) 68.5 66.1 68.5 73.5 72.2
* estimate **forecast Source: IHS
Good:
The credit risk situation in the sector
is benign / business performance
in the sector is above its long-term
trend.
Fair:
The credit risk credit situation in
the sector is average / business
performance in the sector is stable.
Poor:
The credit risk situation in the
sector is relatively high / business
performance in the sector is below
long-term trend.
Bleak:
The cedit risk situation in the sector
is poor / business performance in the
sector is weak compared to its long-
term trend.
Excellent:
The credit risk situation in the sector
is strong / business performance in
the sector is strong compared to its
long-term trend.
Canadian industries performance forecast
Agriculture
Electronics/ICT
Automotive/
Transport
Financial Services
Chemicals/
Pharma
Food
Construction
Machines/
Engineering
Construction
Materials
Consumer
Durables
Paper Services Steel TextilesMetals
November 2015
Canada
USA: 54.3 % USA: 76.8 %
China: 11.5 % China: 3.7 %
Mexico: 5.6 % United Kingdom: 2.9 %
Germany: 3.1 % Japan: 2.1 %
Japan: 2.6 % Mexico: 1.0 %
Main import sources
(2014, % of total)
Main export markets
(2014, % of total)
4. 0
3,000 3,000
2,000 2,000
4,000 4,000
5,000 5,000
1,000 1,000
4
The insolvency environment
Sources: Office of the Superintendent of Bankruptcy Canada; Atradius Economic Research
*forecast
(Calendar year: % change on previous year)
Canadian business insolvencies
% change
2010
-24.9 %
2011
-10.5 %
2012
-11.2 %
2013
-1.5 %
2014
-2.2 %
2015*
7.0 %
0
3,187 3,116
3,335
4,072
3,643
3,236
2016*
1.0 %
3,370
Canadian corporate insolvencies expected to increase in 2015
and 2016
After double-digit year-on-year decreases between 2010 and 2012, the pace
of insolvency decline slowed down in 2013 and 2014. Due to the more difficult
economic environment and low commodity prices (see report below), it is expec-
ted that business insolvencies will increase again in 2015 by 7 % to about 3,300
cases, followed by another 1 % increase in 2016.
Main economic developments
Growth expected to slow down in 2015
The Canadian economy has seen robust growth since 2010, mainly due to in-
creased global demand for commodities, especially oil. However, as the world´s
fifth largest oil producer, Canada has been affected by the steep decrease in oil
prices since mid-2014. According to Statistics Canada, GDP shrank 0.2 % in Q1
of 2015 compared to the previous quarter and 0.1% in Q2 of 2015; technically
entering recession. The GDP decrease was mainly a result of contractions in
manufacturing, mining, quarrying, oil and gas extraction and wholesale trade.
According to Statistics Canada, in Q2 of 2015 the value added of the mining,
quarrying and oil and gas extraction sector decreased 4.5 %, mainly due to the
decline in the non-conventional oil extraction industry (down 5.7 %), which
experienced maintenance shutdowns and production difficulties. Support activi-
ties for mining, and oil and gas extraction even contracted 18 %.
Economic growth is expected to slow down to 1 % in 2015, but to rebound 2 %
in 2016.
5
4
3
2
1
0
2012 2013 2014 2015e 2016f
Source: IHS
1.9 2.0
2.4
1.0
2.0
Real GDP growth
(y-on-y, % change)
5. 5
2012 2013 2014 2015e 2016f
Source: IHS
Private consumption
(y-on-y, % change)
5
4
3
2
1
0
1.9
2.22.5
1.9
2.7
Private consumption growth remains subdued
After growing 2.7 % in 2014, private consumption is expected to grow only
1.9 % in 2015. Household debt expanded in recent years, with most consumer
borrowing going into buying homes, as property values have gone up and
interest rates are low. However, it is estimated that housing is currently over-
valued by about 30 %, and household indebtedness has increased to more than
160 % of disposable income. This could pose a risk to the economy, especially
if interest rates and unemployment were to increase in the future. The unem-
ployment rate is expected to remain stable in 2015 and 2016, at around 6.9 %,
and inflation is expected to increase only slightly in 2016. Nevertheless, any
potential economic downturn in the future could turn the consumer debt issue
into a real problem.
Industrial production expected to contract in 2015
In 2015 the Canadian dollar has depreciated further against the US dollar, while
the Canadian Central Bank has lowered the interest rate twice, to the current
0.5 %. This was seen as a move to boost investments and to make Canadian
exports even cheaper.
However, so far, the weaker exchange rate and lower interest rate have not led
to a surge of exports of manufactured goods to the US, which accounts for more
than 75 % of Canadian exports. Industrial production is expected to contract
1.3 % in 2015. The potential of manufacturing to compensate for the decrease in
the energy sector is limited, as manufacturing contribution to GDP has steadily
decreased in recent years (in 2014 it accounted for 10% of GDP, down from 18
% in 2000). At the same time, the Canadian manufacturing sector has lost inter-
national competitiveness, as currencies of other countries exporting to the US
have also depreciated against the USD. Additionally, input costs (often priced in
USD) have increased and Canadian wages are high by international comparison.
The growth of exports of goods and non-factor services is expected to slow
down to 2 % in 2015, and to increase 4 % in 2016. The current account deficit is
expected to widen to 3.5 % of GDP in 2015.
Problems in the oil sector trigger investment contraction
Energy firms, which account for about 30 % of capital spending, are expected to
reduce investment by about 40 %. At the same time, investment in the manu-
facturing sector remains subdued. Real fixed investment in Canada is expected
to decrease 2.7 % in 2015, and to contract another 0.3 % in 2016.
Public deficit increases, but government debt remains
manageable
Canada´s government debt is expected to increase in 2015 to 73.5 % of GDP,
but, as a share of GDP, it remains relatively low compared to the US and most
Western European countries. Despite an increase in 2014, the fiscal deficit is
expected to remain modest, at 2.0 % in 2015 and 1.4 % in 2016. However, a hig-
her increase in 2016 and beyond cannot be ruled out after the landslide victory
of the Liberal Party in the October 2015 general elections. During the election
campaign, the party said that it plans to run higher deficits for the coming three
years in order to increase infrastructure spending as a measure to boost econo-
mic growth.
2012 2013 2014 2015e 2016f
Source: IHS
Industrial production
(y-on-y, % change)
6
4
2
0
-2
2012 2013 2014 2015e 2016f
Source: IHS
Real fixed investment
(y-on-y, % change)
10
5
0
-5
-10
2012 2013 2014 2015e 2016f
Source: IHS
Government debt (% of GDP)
100
80
60
40
20
0
1.4
0.1
1.8
-1.3
4.1
4.8
-0.3
0.4
-2.7
0.2
68.5 72.2
66.1
73.568.5
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6. 6
Key indicators 2012 2013 2014 2015* 2016**
Real GDP (y-on-y, % change) 4.0 1.4 2.1 2.3 2.8
Consumer prices (y-on-y, % change) 4.0 3.8 4.0 2.7 3.2
Private consumption (y-on-y, % change) 4.9 2.3 2.0 2.9 2.2
Industrial production (y-on-y, % change) 2.9 -0.6 1.9 0.3 2.1
Real fixed investment (y-on-y, % change) 4.8 -1.6 2.3 3.4 2.6
Exports of goods and non-factor services
5.8 2.4 7.3 7.5 4.8
(y-on-y, % change)
Fiscal balance (% of GDP) -2.6 -2.5 -3.2 -3.0 -2.8
Current account/GDP (%) -1.3 -2.4 -2.1 -2.2 -2.2
Foreign debt/GDP (%) 32 35 37 44 48
International reserves
4.9 5.4 5.8 5.5 5.1
(in months of merchandise imports)
* estimate **forecast Source: EIU, IHS, IMF
Mexican industries performance forecast
Agriculture
Electronics/ICT
Automotive/
Transport
Financial Services
Chemicals/
Pharma
Food
Construction
Machines/
Engineering
Construction
Materials
Consumer
Durables
Paper Services Steel TextilesMetals
November 2015
Mexico
USA: 49.0 % USA: 80.3 %
China: 16.6 % Canada: 2.7 %
Japan: 4.4 % Spain: 1.5 %
South Korea: 3.4 % China: 1.5 %
Germany: 3.4 % Brazil: 1.2 %
Main import sources
(2014, % of total)
Main export markets
(2014, % of total)
Good:
The credit risk situation in the sector
is benign / business performance
in the sector is above its long-term
trend.
Fair:
The credit risk credit situation in
the sector is average / business
performance in the sector is stable.
Poor:
The credit risk situation in the
sector is relatively high / business
performance in the sector is below
long-term trend.
Bleak:
The cedit risk situation in the sector
is poor / business performance in the
sector is weak compared to its long-
term trend.
Excellent:
The credit risk situation in the sector
is strong / business performance in
the sector is strong compared to its
long-term trend.
7. 7
Main economic developments
Low structural growth in the last 20 years
Mexico’s economy is highly dependent on oil (accounting for more than 30 %
of government revenues) and closely linked to the US business cycle, which
accounts for 80 % of Mexican exports. Since 1994, GDP growth has been struc-
turally low at an average annual rate of 2.6 %, due to low investment and weak
productivity.
A modest rebound expected in 2016 after subdued growth rates
in 2014 and 2015
Since the second half of 2014, Mexico´s economic performance has been ham-
pered by a more volatile global economic environment and domestic political
woes. Since fall 2014, concerns over the security situation have grown, following
the disappearance of 43 students in the city of Iguala. These were presumably
kidnapped and killed by police forces in league with a regional drug cartel. Public
discontent about the way president Peña Nieto handled the situation resulted
in country-wide protests and falling approval ratings. Since then, several other
crime-related incidents and corruption scandals have weighed negatively on
business and consumer confidence, affecting domestic demand. Industrial
production remains subdued, and is expected to grow only 0.3 % in 2015. This,
combined with fiscal consolidation measures aimed at the negative impact of
lower oil prices on government finances, has resulted in sluggish real GDP in H1
of 2015.
That said, real exports have picked up again since the beginning of 2015, as
Mexico benefits from the robust performance of the US economy. Domestic de-
mand is expected to increase as inflation decreases. In 2016, economic growth is
forecast to reach 2.8 % after a growth of 2.3 % in 2015.
Sound fiscal policies to counter the oil price decrease
Overall, Mexico’s budgetary policy has been solid, with acceptable public sector
finances (government debt of 50 % of GDP and a budget deficit of 3.0 % of GDP
in 2015). There have been improvements in the fiscal framework and higher tax
revenues, following a tax reform passed in 2013.
However, fiscal flexibility is still constrained by low tax revenues (Mexico has a
narrow tax base of only 10 %) and the structural decrease in oil revenues. With
oil accounting for about a third of government revenues, decreased oil prices are
putting pressure on government finances and complicating the implementation
of energy reforms.
Nevertheless, oil price hedges limit the effect of the recent decline in oil prices
on government finances. At the same time, budget cuts have been implemented
and the bidding process for exploration and exploitation of oil fields by private
companies has been kept on track. Public debt is expected to peak at 52 % of
GDP in 2016.
5
4
3
2
1
0
2012 2013 2014 2015e 2016f
Sources: EIU, IHS, IMF
4.0
1.4
2.1
2.3
2.8
Real GDP growth
(y-on-y, % change)
2012 2013 2014 2015e 2016f
Sources: EIU, IHS
Industrial production
(y-on-y, % change)
3
2
1
0
-1
-2
-3
2.9
2.1
-0.6
0.3
1.9
2012 2013 2014 2015e 2016f
Sources: EIU, IHS, IMF
Fiscal balance (% of GDP)
0
-1
-2
-3
-4
-5
-2.6
-2.8
-2.5
-3.0-3.2
8. 8
Monetary policy helps to spur growth
The Bank of Mexico has kept the benchmark interest rate at a record low of
3 % since June 2014 in order to boost economic growth, while inflation remains
below its target range of 2 %-4 % (a 2.7 % increase in consumer prices is forecast
for 2015). That said, the concern remains that an increase of US interest rates
by the Federal Reserve could spur foreign investors to withdraw capital, leading
the Bank of Mexico to follow suit.
Solid bank sector, but performance is below potential
In general, Mexico’s banks are well capitalised and liquid, with limited expo-
sure to foreign currency risks. However, they are performing below potential
(bank assets as a percentage of GDP stand at just 45 %), constraining the credit
growth needed to stimulate more private consumption. A cautious lending poli-
cy is also restricting financing options for small and medium-sized enterprises.
Crucial reforms have been passed
Since 2013 the Peña Nieto administration and the Mexican Congress have
passed some comprehensive reforms to overcome the economy´s structural
weaknesses: low earnings capacity, limited fiscal flexibility and high dependen-
cy on volatile portfolio capital inflows. In the past, reform efforts have often
failed because of a lack of political will or insufficient support from opposition
parties in Congress, in effect, impeding economic efficiency and longer-term
GDP growth.
Despite some public protests, an education reform bill was passed in early 2013.
This was followed by bills to liberalise the telecommunications market, to re-
form the tax system to broaden the narrow tax base, and to open the monopo-
lised electricity market.
However, with oil production decreasing over the last 10 years and the
government´s high dependence on oil revenues, the centrepiece of the reform
efforts is the reorganisation of the energy sector. Pemex, the state-owned
oil and gas company, lacks the know-how and financial resources to invest in
exploration and production, mainly because it pays 90% of its revenues to the
state. Pemex therefore urgently needed permission to cooperate with private
(foreign) investors for joint exploration, refining and distribution. Finally, the
constitutional changes implemented at the end of 2014 have put an end to
Pemex’s 75-year monopoly and enabled foreign companies to invest in the
exploitation of offshore oil fields and shale gas.
Although the first auction of shallow water oil fields held in July 2015 failed, the
government proved to be a quick learner as it adjusted contract terms to make
fields more investors-friendly, thereby showing its continued commitment to
these important reforms. A second auction held in September 2015 went much
better, with three of the five fields being sold. One of them was purchased by
Eni of Italy, which was a welcome sign of faith from one of the world’s energy
majors. These fields are expected to generate a peak of 90,000 barrels per day
of light and medium crude oil by 2022 and to reverse the downward trend in oil
production by 2018.
Reorganisation of the energy
sector is the centrepiece of
reform efforts.
9. 9
Proper implementation of reforms is key
A comprehensive and swift implementation of the reforms would increase
investment and significantly improve the economy´s productivity and compe-
titiveness, raising Mexico´s potential annual GDP growth rate from 3.0 %-3.5 %
to 4 %-5 % in the long term. Lower energy and electricity costs should increase
the productivity and profitability of Mexican industries, especially export driven
ones such as the automotive industry. Moreover, it would boost foreign direct
investment and reduce dependency on volatile portfolio capital inflows.
However, proper implementation is key (e.g. transparent bidding processes). It
remains to be seen to what degree the big state-owned electricity and energy
businesses are willing to accept competition and end their monopolies. Public
protests and political struggles between the main parties could still derail pro-
per implementation.
More needs to be done to tackle the poor domestic security linked to drug-
related violence and rampant corruption, both of which severely affect the
business climate and hamper economic performance by discouraging investors.
At the same time, the profitability of many businesses has suffered from threats
and violence against business owners, including the kidnapping of their family
members. For a solid recovery of the country’s medium-term earnings capacity,
Mexico would need to improve its law enforcement, the independence of the
judiciary system and to overhaul police institutions. In this respect, the approval
of a comprehensive anti-corruption law by the Mexican Congress is another step
in the right direction.
A strong position to deal with external challenges
In general, Mexico´s economy is well positioned to deal with the current chal-
lenges stemming from decreased oil prices, a stronger USD and the expected
increase in US interest rates (potentially leading to higher exchange rate volati-
lity). Its resilience is underpinned by prudent macroeconomic policies, a flexible
exchange rate and solid external balances, with limited current account deficits
and external refinancing needs.
Depreciation of the Mexican peso against the USD could pose a challenge for
businesses that have increased their USD borrowing over the past years. That
said, corporate debt is still low, at 21 % of GDP. About two-thirds of this debt is
being externally financed, and refinancing risks are being mitigated by suffi-
cient foreign exchange reserves to cover imports for more than five months.
There is additional liquidity potential from a precautionary IMF credit line of USD
70 billion on which Mexico can draw in times of adverse global credit conditions.
Solvency is also robust: foreign debt ratios are under control (44% of GDP,
110% of exports).
2012 2013 2014 2015e 2016f
Sources: EIU, IHS, IMF
Current account (% of GDP)
0
-1
-2
-3
-4
-5
-1.3
-2.2-2.4 -2.2-2.1
2012 2013 2014 2015e 2016f
Sources: EIU, IHS, IMF
International reserves
(in months of merchandise
imports)
10
8
6
4
2
0
4.9 5.15.4 5.55.8
Drug-related violence and
corruption remain major
stumbling blocks for more
investment.
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10. 10
Key indicators 2012 2013 2014 2015* 2016**
Real GDP (y-on-y, % change) 2.2 1.5 2.4 2.5 2.8
Consumer prices (y-on-y, % change) 2.1 1.5 1.6 0.1 1.6
Private consumption (y-on-y, % change) 1.5 1.7 2.7 3.1 3.2
Retail sales (y-on-y, % change) 2.7 2.4 2.2 2.0 2.9
Industrial production (y-on-y, % change) 2.8 1.9 3.7 1.3 1.6
Unemployment rate (%) 8.1 7.4 6.2 5.4 5.2
Real fixed investment (y-on-y, % change) 6.3 2.4 4.1 4.4 5.9
Exports of goods and non-factor services
3.4 2.8 3.4 1.7 3.7
(y-on-y, % change)
Fiscal balance (% of GDP) -7.9 -4.4 -3.8 -3.4 -3.8
Government debt (% of GDP) 120.2 121.8 121.5 120.4 120.6
* estimate **forecast Source: IHS
US industries performance forecast
Agriculture
Electronics/ICT
Automotive/
Transport
Financial Services
Chemicals/
Pharma
Food
Construction
Machines/
Engineering
Construction
Materials
Consumer
Durables
Paper Services Steel TextilesMetals
November 2015
USA
China: 19.9% Canada: 19.2%
Canada: 14.8% Mexico: 14.8%
Mexico: 12.5% China: 7.6%
Japan: 5.7% Japan: 4.1%
Germany: 5.2% United Kingdom: 3.3%
Main import sources
(2014, % of total)
Main export markets
(2014, % of total)
Good:
The credit risk situation in the sector
is benign / business performance
in the sector is above its long-term
trend.
Fair:
The credit risk credit situation in
the sector is average / business
performance in the sector is stable.
Poor:
The credit risk situation in the
sector is relatively high / business
performance in the sector is below
long-term trend.
Bleak:
The cedit risk situation in the sector
is poor / business performance in the
sector is weak compared to its long-
term trend.
Excellent:
The credit risk situation in the sector
is strong / business performance in
the sector is strong compared to its
long-term trend.
11. 11
USA: developments in some main sectors
Automotive
The US automotive sector is performing well, with new car sales approaching
pre-recession levels, driven by the robust economic performance and improved
consumer confidence. The aftermarket segment remains stable, aided by lower
fuel prices. Gross margins of automotive businesses are expected to remain
stable in the coming months as the industry benefits from lower raw material
prices. However, at the same time there is some headwind from a stronger USD.
The average payment duration in the US automotive industry ranges from 30 to
60 days. Payment behaviour in this sector has been rather good over the past
two years. The number of protracted payments, non-payments and insolvency
cases is low. Given the positive performance outlook, we expect the current in-
solvency rate to remain stable. Due to the generally benign indicators, we assess
the credit risk and business performance of the automotive sector to be good,
and our underwriting stance continues to be open. However, we generally have
a neutral underwriting stance on the alternative fuel vehicles segment, which is
currently impacted by low oil prices and a lack of infrastructure/charging points.
Construction
The US construction sector is benefiting from robust household consump-
tion as demand for new housing is increasing. Non-residential construction
also showed satisfying performance. That said, downward pressure on many
businesses´ revenues remains, and increasing salaries, healthcare costs for staff
and miscellaneous expenses continue to tighten margins. Banks are principally
willing to lend to the construction industry, but only for viable and promising
projects. Construction insolvencies have continued to improve overall in the US
in 2015, however, small businesses in the industry are generally still paying later
and have higher bankruptcy rates and more delinquent debt than other indust-
ries. The decreasing trend in insolvencies is expected to continue in the coming
months. Due to the positive development, we have steadily increased our cover
for this industry over the past few years.
Retail/consumer durables
The general outlook for the US retail and consumer durables industry remains
positive, given the continued increase in US consumer spending. Home products
companies generate about half of the consumer durables retail sector´s revenue
and operating profit. Specific industry subsectors may be viewed more positively
than others, e.g. solid home sales should support demand for furniture and other
home goods. Online sales, which average about 5% of total sales, are expected
to remain the fastest growing segment of the retail industry and shift the retail
landscape. Merger and acquisition activity will remain high as companies seek
to turn their stable margins and stronger balance sheets into enhanced product
portfolios with greater geographic diversity.
Despite the generally good outlook for consumer durables retail, there is always
the risk that sales prices may suffer if demand unexpectedly slows and compe-
tition intensifies. While high earners continue to spend, thanks to gains in the
housing and equity markets, many lower and middle-income consumers still
remain cautious, partly due to the rising food and healthcare costs.
Despite the general upswing, the consumer durables retail sector continues to be
characterised by increased competition and continued price and margin pressu-
re. Therefore, businesses within the industry should be carefully evaluated and
liquidity should be closely observed.
Payments in the US
automotive industry take
30 days on average.
Smaller construction
businesses still have
higher bankruptcy rates.
Fierce competition and
continued price and margin
pressure remain issues.
12. 12
The insolvency environment
US corporate insolvencies expected to decrease further in 2015
and 2016
After sharp year-on-year increases in 2008 and 2009, the number of corpo-
rate insolvencies has steadily decreased every year since. According to figures
provided by the US Courts, the number of business bankruptcies filed in Federal
Courts declined 18.8 % year-on-year in 2014, to 26,983 cases.
We expect this positive downward trend to continue in 2015 and 2016 due to
the anticipated continuation of economic growth (see economic report below).
However, the pace of decline in insolvencies is forecast to slow down.
(1 year trailing sum of insolvency counts, quarterly data)
Insolvency trends: United States
The insolvency environment
US corporate insolvencies expected to decrease further in 2015 and 2016
After year-on-year increases of more than 40% in 2008 and 2009, the number of corporate
insolvencies has steadily decreased every year since. According to figures provided by the US
Courts, the number of business bankruptcies filed in Federal Courts declined 18.8% year-on-year in
2014, to 26,983 cases.
We expect this positive downward trend to continue in 2015 and 2016 due to the anticipated
continuation of economic growth (see economic report below). However, the pace of decline in
insolvencies is forecast to slow down.
Bitte diese Graphik einfügen
Sources: Administrative Office of the U.S. Courts; IHS
Bitte Graphik einfügen
US business insolvencies
Steel and metals
Currently, the revenue performance of the US steel and metals sectors is ne-
gatively affected by the lower cost of imported (Chinese) steel and decreasing
demand from the oil/gas industry, which suffers from the oil price decline. The
latter particularly affects the oil country tubular goods (OCTG) sector. Profit
margins of steel and metals businesses have decreased over the last 12 months
due to the negative impact lower import pricing has had on the sector, and this
declining trend is expected to continue. Competition is increasing, as companies
try to expand their regional reach (local to regional, regional to national) in order
to find new business and increase revenues and profits. Financing requirements
and gearing are generally high in this industry. Payment delays and defaults
have increased and are expected to rise further, as the cash flow of end-buyers
has been impacted by lower growth, especially in the OCTG sector. Insolven-
cies have increased in the OCTG-related segment and are expected to increase
further in 2015, by about 10 % - 15 %.
Sources: Administrative Office of the U.S. Courts; IHS
Rising insolvencies in the
oil sector-related segments.
Pace of insolvency decrease
expected to slow down.
13. 13
2012 2013 2014 2015e 2016f
Source: IHS
Private consumption
(y-on-y, % change)
5
4
3
2
1
0
1.5
3.2
1.7
3.1
2.7
Main economic developments
Growth expected to accelerate in 2016
The US economic rebound is expected to continue. Following the 2.4 % increase
in GDP in 2014, a growth rate of 2.5 % is expected in 2015, and 2.8 % in 2016.
While US exports are hampered by the strong USD, the shale gas sector faces
serious problems. However, this is more than offset by increasing investment,
lower energy prices, robust consumer spending and an improving housing mar-
ket. That said, downside risks have increased over the last couple of months due
to increased volatility in the world economy.
Private consumption growth expected to remain robust in 2016
Consumer confidence has increased considerably since early 2014, and after
a surge in 2014 household consumption is expected to increase 3.1 % in 2015
and 3.2 % in 2016. As consumer spending accounts for more than two-thirds of
US GDP, this increase should be a major contributor to the expected robust GDP
growth rates in 2015 and 2016.
Consumer wealth has been boosted by increasing home prices. The collapse in
home prices was one of the causes of the 2008 financial crisis. Prices began
falling in 2006 and did not stabilise until 2009. The recovery in prices started in
early 2012 and continued into 2015. Home sales are still benefiting from lower
prices in many areas and low mortgage rates. Home owners who have seen
their equity rise will be more likely to borrow and spend while, at the same time,
delinquency rates should stabilise.
Household finances continued to improve in 2014 and 2015, with consumers
reducing their debt and improving their debt-to-income ratios. Net wealth is
also better, thanks to both lower debt and higher asset values, on investments
such as housing and securities/stocks. This provides a solid foundation for
further growth in consumer spending.
Another important factor for rising consumer confidence and spending is the
lower unemployment rate, which decreased to 6.2% in 2014 and is expected to
decline further to 5.4 % in 2015 and to 5.2 % in 2016. Job security has increased
and nominal wages have finally begun to tick up, albeit modestly. Wage growth
is expected to continue improving in 2016.
5
4
3
2
1
0
2012 2013 2014 2015e 2016f
Source: IHS
2.2
1.5
2.4 2.5
2.8
Real GDP growth
(y-on-y, % change)
0
40,000 40,000
20,000 20,000
60,000 60,000
80,000 80,000
Sources: Administrative Office of the U.S. Courts; Atradius Economic Research
*forecast
(Calendar year: % change on previous year)
US business insolvencies
% change
2009
39.7 %
2010
-7.5 %
2011
-15.1 %
2012
-16.2 %
2013
-17.1 %
2014
-18.8 %
0
40,075
33,212
26,983
60,837
56,282
47,806
2015* 2016*
-10.0 % -4.0 %
24,300 23,330
14. 14
2012 2013 2014 2015e 2016f
Source: IHS
Industrial production
(y-on-y, % change)
5
4
3
2
1
0
2012 2013 2014 2015e 2016f
Source: IHS
Real fixed investment
(y-on-y, % change)
10
8
6
4
2
0
2.8
1.61.9
1.3
3.7
6.3 5.9
2.4
4.4
4.1
Additionally, household consumption is aided by the strong USD, low inflation
and low interest rates. Due to the low interest rate environment US consumers
have increased their purchases of big-ticket items like cars and houses. The US
consumer price index (CPI) is forecast to decline to 0.1 % in 2015.
The CPI has decreased since mid-2014 as a result of declining oil prices. The
decrease in oil prices is, on balance, positive for the US economy. Due to a strong
increase in production over the past couple of years, the US is currently self-suf-
ficient in oil. While the lower oil price reduces the profits of producers, it benefits
consumers, who are more likely to spend the extra money.
However, a downside risk for household consumption growth in 2016 could
be larger stock market volatility, given the relatively high exposure to equities
through investments and/or retirement savings.
Decreasing exports hurt the manufacturing sector
US companies are expected to continue to benefit from low financing costs as it
is anticipated that the Federal Reserve will be cautious in raising interest rates
later this year with inflation being low and the value of the dollar rising.
However, the strong USD continues to hurt US export businesses, with their pro-
fit levels decreasing further. US exports contracted in H1 of 2015, partially due to
the fact that the increasing strength of the USD hurts the international competi-
tiveness of US exporters. In real effective terms, the USD has appreciated more
than 10 % since mid-2014. There is decreased demand for US exports in key
markets like Canada (whose currency has depreciated sharply against the USD)
and China, where economic growth has slowed down. This adverse development
mainly affects the manufacturing sector. Industrial production growth is expec-
ted to slow down in 2015 and 2016.
After a low growth rate of 1.7 % in 2015 exports are currently expected to grow
3.7 % in 2016. However, this forecast could prove to be overly optimistic if the
USD appreciates further and external demand from emerging markets continues
to decrease.
Investment set to improve
In the first half of 2015 business investment remained subdued as the US energy
sector adjusts to the low oil prices. However, investment in business equipment
has recovered in Q3 of 2015 indicating businesses are optimistic in the face of
weak external conditions. Real fixed investment is expected to grow 4.4 % in
2015 and even by more than 5% in 2016. However, capital spending in the oil
sector will remain subdued due to the plunge in oil prices.
An interest rate increase in early 2016?
Throughout the first half of 2015, the continued robust GDP growth cemented
predictions that the Federal Reserve (Fed) would raise the low interest rate of
0.25 % set in September 2015. However, uncertainty regarding the global mar-
kets and its potential effects on US growth has motivated the Fed to delay an
interest rate increase again in its September and October meetings.
15. 15
2012 2013 2014 2015e 2016f
Source: IHS
Fiscal balance (% of GDP)
0
-2
-4
-6
-8
-10
-7.9
-3.8
-4.4
-3.4
-3.8
It remains to be seen if the Fed will still increase interest rates in 2015, given
the more volatile global economic environment and the low inflation rate,
which currently is still far below the Fed´s 2 % target. At the same time, despite
decreasing unemployment, the labour market is still not performing at a level
strong enough to offer enough confidence to pursue a rate hike. The labour
participation rate has steadily decreased since 2008, to 62 %, the lowest rate
the US has seen since 1977. This decline can be partially attributed to changing
demographics (the aging population). Lower participation in the labour force is
a significant driver of declining unemployment, so until these numbers become
more robust, the Fed is likely to remain hesitant.
With diminished threats of external shocks for the US economy, inflation is
expected to increase again while the wage growth and the participation rate in
the labour force are forecast to improve in the coming months. This would lead
to the Fed increasing interest rates in late 2015/early 2016.
Public deficit decreases, but government debt remains high
As a result of the 2008 financial crisis, both government debt and the budget
deficit increased sharply from 2009 to 2011. After reaching 4.4 % of GDP in
2014, the budget deficit is expected to decrease in 2015, to 3.8 % of GDP. Howe-
ver, government debt remains high, at 120 % of GDP.
The political struggle over government finances still remains a potential risk
to the US economic outlook in the mid and long term. The dispute between
Republicans and Democrats in the US Congress over government policy and the
fiscal budget led to a temporary shutdown of the government in autumn 2013.
Congress has not yet reached a long-term solution, and the unwillingness to
make concessions has proven to be a stumbling block to comprehensive budget
consolidation.
That said, end of October 2015 the Republicans in the US Congress have reached
a compromise budget deal with the White House to avert the prospect of a
renewed government shutdown. This agreement will last until March 2017. The
agreement raises the debt ceiling and increases the budget.
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