In the past, when CEOs mentioned China in earnings reports in a negative manner, it typically centered on supply chain issues such as delayed shipments, quality concerns, counterfeit or substitute materials, increased pricing or related “procurement” considerations. No longer. Despite the debate around trade deficits, IP transference and market economy considerations, China has become increasingly important from a top line perspective as well. And stagnation in segments of the Chinese economy have now impacted the top line of western manufacturers as well, creating a material impact on revenue and earnings. Consider Apple, a Fortune 5 manufacturer, as a case in point. When Apple’s CEO, Tim Cook, writes a letter to shareholders blaming Apple’s overall revenue/earnings slowdown on China as he did in early January, it is worth paying … [Read more...] about China’s Economic Slump: Yes, It Impacts U.S. Manufacturers
Industry News
Manufacturing Unemployment & Tactics for Employers
It’s a good time for industrial job seekers. Not only is overall employment strong, but a scarcity of skilled talent has put many job seekers at an advantage, relative to the past. The health of the manufacturing economy and jobs growth is best told by the numbers. According to the U.S. Bureau of Labor Statistics, the total nonfarm payroll employment rose by over 200,000 jobs in August and the unemployment rate stood “unchanged” at 3.9%. And manufacturing employment for the year is “up by 254,000, with more than three-fourths of the gain in the durable goods component.” The macroeconomic climate for manufacturers (which will drive jobs trends in the months and quarters to come) looks as healthy as the jobs market. According to the Institute for Supply Management, the August PMI (manufacturing index) rose to its highest level since … [Read more...] about Manufacturing Unemployment & Tactics for Employers
The Coming Presidential Election: More Economic and Trade Debate Needed
The 2020 Presidential Election promises to be one of the most contested elections in US history. According to The New York Times, 25 candidates (23 Democrats and 2 Republicans) are already running for the highest elected office in the United States. If you’re curious about the other Republican candidate in addition to Donald Trump that is running, it’s none other than libertarian Bill Weld – about as opposite to Trump a candidate can get in terms of trade policy. This may prove more harmful to the Democrat cause within the historic blue-collar base which has been the largest beneficiary of low unemployment and Trump’s approach to trade. From a quantitative perspective, the actual numbers speak to Trump’s comparative success in recent quarters and the impact of his controversial trade policies on the overall economy. From October … [Read more...] about The Coming Presidential Election: More Economic and Trade Debate Needed
The Final Burial of Democracy in Hong Kong?
Over two decades ago, I hired an old friend from prep school to lead the Hong Kong office of a fast-growing sourcing tech company I worked for. A Westerner with strong Chinese language skills and a graduate student in Asian history, he took a somewhat eccentric British pride in riding his old Triumph motorcycle around the streets of Hong Kong, the loud bike harkening back to the old days of British rule every time it backfired, perhaps. There is no rumble of that old motorbike anymore. While the latest tariff waves and currency devaluation rumbles have captured the U.S. and China headlines of late – as the overall situation appears to continue to deteriorate, perhaps for the better, perhaps for the worse – what we find just as fascinating and as important to understand China’s ambitions is its continued crackdown on the last … [Read more...] about The Final Burial of Democracy in Hong Kong?
China Takes a Beating in Round 1 of the Trade War
Summer vacations provide a time for rest and reflection. While relaxing in the sun in August, we could not help but reflect on a critically important piece of business, economic and policy news you won’t often see reported in the mainstream press. What is this headline? China is losing the first salvo of the trade war with the US. While no one – except perhaps President Trump himself – believes that trade wars are “easy” to win, the victor of round 1 appears hard to dispute. Regardless of where you sit – either by industry or manufacturing supply chain tier – it’s clear that on an overall economic basis, China is taking a greater beating than the US. According to Trading Economics, the Caixin China’s Manufacturing PMI (formerly the HSBC PMI), “fell to an eight-month low of 50.8 in July of 2018 from 51.0” and both output and new … [Read more...] about China Takes a Beating in Round 1 of the Trade War
