Monday, November 2, 2015
Global manufacturing struggles as stimulus falls short; Nissan reports 38% profit rise; Best news: There's progress in ending extreme poverty
1 Global manufacturing struggles as stimulus falls short (Gulf News) Massive monetary stimulus from Chinese and European central banks has done little to spur factory growth, moving a debate over more easing up the agenda and raising doubts over whether US interest rates will rise this year.
A crop of industry surveys have pointed to October as another subdued month. Activity in China’s colossal factory sector shrank as global demand stuttered while Eurozone factories again resorted to slashing prices to drum up trade.
More than half a year after the ECB started pumping in 60 billion euros a month of new money through its quantitative easing programme, the currency bloc’s relatively downbeat manufacturing survey may make disappointing reading for policymakers. The central bank has failed to lift inflation anywhere near its target of just below 2 per cent, and data on Friday showed prices were unchanged last month, heaping more pressure on the bank to act.
Beijing has also rolled out a raft of support steps to avert a sharper slowdown, including cutting interest rates six times in the past year, but the stimulus has been slower to take effect than in the past.
The only promising news came from Japan and Britain. Markets are betting the Bank of Japan will have to expand its asset-buying campaign. In Britain, which doesn’t use the euro, factory activity unexpectedly surged to a 16-month high helped by a recovery in export orders although economists remained cautious.
2 Nissan reports 38% profit rise (San Francisco Chronicle) Nissan's profit for the July-September quarter zoomed 38 percent higher on healthy sales in China, the US and Europe, prompting the automaker to raise its full-year projections.
Yokohama, Japan-based Nissan Motor Co. reported a fiscal second quarter profit of 172.8 billion yen ($1.4 billion), up from 124.9 billion yen the year before. Quarterly sales at the automaker allied with Renault SA of France rose 13 percent to 3.034 trillion yen ($25.2 billion).
Nissan now expects a 535 billion yen ($4.4 billion) profit for the full year through March 2016, which would be an increase of nearly 17 percent from the previous year. It credited strong sales, cost cuts and a favorable exchange rate. The maker of the Leaf electric car and Infiniti luxury models had earlier expected a 485 billion yen ($4 billion) profit for the fiscal year.
Nissan has recently shown its advances in developing the self-driving car. It's also a world leader in electric vehicles, with cumulative global sales of 200,000 for its Leaf electric car. The self-driving technology, still in its experimental stages and not yet for commercial use, is being packed in the Leaf as well.
Such cutting-edge technology doesn't contribute much to vehicle sales in its early phases but is a boon to Nissan's image. Nissan expects to sell 5.5 million vehicles for the fiscal year, up 3.4 percent from the previous year.
3 Best news: There’s progress in ending extreme poverty (Jim Yong Kim in The Guardian) The dramatic fall in global poverty over the past two decades is the best news in the world today. For the first time ever, the percentage of people living in extreme poverty – now defined as living on less than $1.90 a day – is projected to fall below 10% this year, to 9.6% of the world’s population.
Unprecedented economic growth, especially in China, has allowed hundreds of millions of people to escape poverty. But to effectively end extreme poverty by 2030 – the goal of the World Bank Group and our 188 member countries – our aspirations must be higher still. Many tough decisions will have to be made before we can become the generation that ends extreme poverty.
The question we ask today is how developing countries can progress in the face of slow global growth, the end of the commodities super-cycle, pending interest rate hikes, and capital flight from emerging markets?
For the largely middle-income countries in East Asia and the Pacific, the challenge in this unfavorable global environment is to sustain growth, improve social services and protect the vulnerable. The Pacific Islands will also need to ensure stronger public finances in order to be best prepared for the impacts of climate change and future economic shocks.
Our overarching strategy, based on more than 50 years of experience, is that three things must happen: Economic growth must lift all people. It must be inclusive. Investment in human beings is crucial – especially investing in their health and education.
We must ensure that we can provide safety nets that prevent people from falling back into poverty because of poor health, economic shocks, or natural disasters. And, to spur growth, every dollar of public spending should be scrutinised for impact. And in a period when banks are de-risking, we have to ensure that capital is accessible – especially for small business owners and entrepreneurs who will create jobs.