Tuesday, November 4, 2014

Europe, Asia factories slump; Europe dominates prosperity rankings; Rolls-Royce to cut 2,600 jobs

1 Europe, Asia factories slump (Khaleej Times) Factories across Asia and the eurozone reported a general loss of momentum last month that speaks volumes about the need for more policy stimulus on top of Japan’s latest efforts to ignite growth. A second month of price-cutting in the eurozone, alongside only tepid expansion in Germany — the bloc’s growth engine — and contractions in France and Italy, will be disconcerting for the European Central Bank as it faces a real risk of deflation.

Meanwhile, regional manufacturing surveys from Asia were littered with unwelcome landmarks, including a five-month low for activity in China, a four-month trough for South Korea and a 14-month low for Indonesia. Markit’s final October manufacturing Purchasing Managers’ Index was 50.6, beating September’s 50.3 but shy of an earlier flash estimate of 50.7. October marked the 16th month the index has been above the 50 line that divides growth from contraction.

Germany’s manufacturing industry returned to modest growth last month but new business fell slightly for a second month as Russian sanctions and a general economic slowdown weighed on demand. Adding to the gloom, the surveys showed French factory activity contracted faster than in September and Italian manufacturing slowed at the sharpest rate in 17 months. British factories also reported a decent month of October.

HSBC’s version of the China PMI, compiled by Markit, was a whisker firmer at 50.4 in October, from September’s 50.2, but showed growth slowing in output and new orders, while companies trimmed staff levels for the 12th straight month. China’s official PMI for services fell to 53.8 in October, down from September’s 54.0 and the weakest reading since January, the National Bureau of Statistics said. Taiwan’s PMI slipped to the lowest in 13 months at 52.0. A rare bright spot was India, where the HSBC PMI rose to 51.6 in October, from 51.0 in September, extending its run above 50 to a full year.

http://khaleejtimes.com/biz/inside.asp?
section=internationbusiness&xfile=/data/internationbusiness/2014/November/internationbusiness_November10.xml

2 Europe dominates prosperity rankings (Amy Sedghi in The Guardian) Norway has been named the most prosperous country in the world for the sixth year in a row by a global prosperity ranking, which rates countries on how they perform in areas such as economics, health, education and freedom. European countries dominate the top 30 of the Prosperity Index, while the UK has jumped three places on last year’s rankings and has been named the most prosperous of all the major EU countries in 2014. It has been placed above Germany at 14th and France at 21st place.

It also warns that the US is “no longer perceived to be the ‘land of the free’” and is placed 21st for the personal freedom, below countries such as Uruguay and Costa Rica. Following Norway in second place on the overall rankings is Switzerland. New Zealand, which is placed third, is the highest climber of the latest release with its jump up attributed to its economic resurgence. Almost two thirds of the countries listed in the top 30 are European nations, with 16 of these being EU member states.

Think tank and publisher of the index, the Legatum Institute name the UK as a “world leader in entrepreneurship” and credit this as one of the reasons for its rise in the rankings. According to the think tank, Russia is the worst performing country in Europe, having fallen seven places to 68th position. Low rankings in governance (113th) and personal freedom (124th) are attributed to the drop in overall ranking.

The index assesses 142 countries and looks at 89 individual variables across eight sub-indices: economy, entrepreneurship and opportunity, governance, education, personal freedom, health, safety and security and social capital.

At the bottom of the rankings is the Central African Republic which also has ranked last for entrepreneurship and opportunity and second to last in the health category. Sub-Saharan African countries take nine of the bottom 10 places on the health sub-index with Sierra Leone named as the worst performing country for this category. In its study, the think tank warns: “the health systems in the majority of countries in the region are underdeveloped and ill-prepared to face serious threats to public health, such as the recent outbreak of Ebola in West Africa.”

http://www.theguardian.com/news/datablog/2014/nov/03/european-countries-dominate-in-global-prosperity-rankings

3 Rolls-Royce to cut 2,600 jobs (BBC) Engineering group Rolls-Royce has said it is planning to cut 2,600 jobs over the next 18 months. It said most of the jobs would go in its aerospace division, with most of the posts being shed in 2015. It is not clear where the cuts will be made from Rolls-Royce’s global workforce of 55,000, 24,000 of whom are in the UK.

The company’s chief executive John Rishton said: “The measures announced today will not be the last, however they will contribute towards Rolls-Royce becoming a stronger and more profitable company.” Last month, Rolls warned that its underlying revenues for 2014 would be 3.5-to-4% lower than expected. The company said voluntary redundancy would be offered, although it could not rule out compulsory redundancies.

Today’s announcement on job losses is likely to be the start of a series on cutting costs for Rolls Royce. After a profits warning in February and October, the company is under pressure to act. Aviation – where these job losses are – has not been as affected by the economic downturn and Russian sanctions as Rolls Royce’s land and sea businesses, and those divisions will now be under scrutiny. Those with good knowledge of the company have told me that the 2,600 job losses will be split between civil and defence aviation in the UK and the US, with two-thirds of the losses coming in the UK.

Rolls-Royce is the second largest aero-engine maker in the world. It has customers in more than 120 countries, including more than 380 airlines and leasing firms, 160 armed forces, 4,000 marine customers including 70 navies, and 1,600 energy and nuclear customers. Rolls-Royce said the job losses would cost it £120m over the next two years, but would bring “annual cost benefits” of £80m once implemented.


http://www.bbc.com/news/business-29900087

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