Trump Adds to Carmakers’ Woes as Markets Across Planet Fizzle
The tariffs that President Donald Trump may impose on vehicles imported to the U.S. would be just the latest kick in the teeth for carmakers battling cooling markets across the planet. Findings of an investigation into whether imported cars could pose a national security threat were received by Trump on Sunday. That was hours before China reported yet another monthly slump in car sales. The world’s largest auto market joins other regions including Europe and the U.S. starting the year on a weak note, fueling anxiety over an industry already grappling with falling profits amid record spending to finance the shift to electric and self-driving cars. The persisting gloom in China, the engine room for growth over the past decade, leaves automakers with few places to go. Japan is sputtering too, while volumes in other smaller markets aren’t enough to offset the declines in the biggest sales regions. Downward pressure is still there,” Gu Yatao, a Beijing-based auto analyst with Roland Berger, said of China. “The government isn’t adopting stimulating policies to give the market a shot in the arm.” The global slowdown has hit earnings of almost everyone from Ford Motor Co. to Volkswagen AG and Toyota Motor Corp. to pile on the pressure as they spend on electrified and autonomous vehicles. In addition, trade woes, political upheaval and diesel’s demise are hurting consumer sentiment, while the increasing availability of ride-hailing and car-sharing services makes it less necessary to own a car.
U.K. Private-Sector Pay Set for Biggest Increase Since 2012
U.K. private-sector workers are set for their biggest wage increase in at least seven years as companies struggle to fill vacancies. The Chartered Institute of Personnel and Development said Monday the expected median pay award has risen to 2.5 percent, the highest since it began the survey in 2012 and above the rate of inflation. Almost three quarters of employers questioned said they were finding it hard to recruit people. The findings underscore the health of the U.K. labor market, with employment at record levels even though economic growth has slowed sharply since the summer amid fears that Britain could leave the European Union without a deal in place to cushion to blow. One theory is that firms are choosing to hire staff rather than invest in machinery and equipment, as it would be easier to cut staffing levels in the event of a Brexit-induced downturn. Official figures Tuesday are expected to show average earnings growing at their fastest pace since the financial crisis and unemployment holding at a 43-year low. “Employers are telling us that recruitment is challenging,” said Jonathan Boys, an economist at the CIPD. “An increasing proportion of vacancies are hard to fill and employers, especially in the private sector, are responding to recruitment difficulties by raising starting salaries.”
Hong Kong’s Growth Halved in Fourth Quarter as Trade War Hit
The trade war between the U.S. and China and slowing retail sales dragged Hong Kong’s economic growth down at the end of last year, with exports showing almost “zero growth.” Gross domestic product in the fourth quarter was “less than 1.5 percent,” according to a blog post on Sunday from Financial Secretary Paul Chan. The “significant slowdown” was well below the 2.9 percent seen in the previous three months. Hong Kong, a key financial and trade hub for Asia, has been hit hard by the ongoing U.S.-China trade war. Exports fell more than expected in December, the first time sales abroad contracted in consecutive months since 2016. Retail sales also missed estimates in December, despite a surge in mainland traffic. “The economic slowdown was very obvious,” Chan said. “The impact of China-U.S. trade friction on Hong Kong’s exports of goods has clearly emerged at the end of last year.”
The slowdown means that the expansion for the whole year will be about 3 percent, the low end of the government’s forecast, Chan said in the post, which is in Chinese. That’s also lower than the 3.2 percent growth projected in November. The budget surplus for the nine months through the end of 2018 was HK$59 billion ($7.5 billion), Chan said in his post. That compares with the HK$138 billion surplus for the whole of the previous financial year. Chan will provide a revised surplus estimate for the full year, along with economic growth data for the fourth quarter of 2018 and a forecast for 2019 when he announces his latest budget on Feb. 27.
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