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Economic Digest

Economic Digest – September 2015


Over the objections of safety advocates, the US Senate has approved a trucking industry bid to allow longer tandem trucks on the nation’s highways. This means the large haulers like FedEx will increase the permitted length of trailers hauled in tandem from 28 feet to 33 feet. However, the bill faces a White House veto threat. Pushing the measure are large trucking operations that stand to profit from lower costs.  In opposition are the Teamster Union and many state and local governments, as well as safety advocates.


A strain of genetically modified wheat developed in the UK has failed to repel pests as intended in field trials.  While it worked in the lab, out in the field, the wheat was still attacked by pests. The research project itself cost US$1.16-million and another $706,000 was spent on fencing the project to protect the trial site from intruders and to stop wild animals getting in. Aphids such as greenfly and black fly damage plants by sucking nutrients from their sap and can also introduce plant viruses. 


New research indicates that the global facial recognition market will witness huge growth over the next decade.  Annual facial recognition devices and licenses are expected to grow from US$28.5-million in 2015 to more than $122.8-million worldwide by 2024 and the annual revenue for facial biometrics including both visible light recognition and infrared-based thermography, will increase from $149.5-milion to $882.5-million, at a compound annual growth rate of 22 per cent. The Asia Pacific region is expected to witness the fastest growth. The largest use for facial recognition is mobile device authentication.


Heatwaves have recently killed hundreds in both India and Pakistan. The number of extreme weather and climate related events is rising. Serious storms have more than doubled in frequency since the early 1980s. Floods and heatwaves have more than tripled. Previous estimates of the future effect of global warming on health by the World Health Organization are underestimates because they failed to take into account vulnerabilities caused by aging, migration and population growth.


Officials with the Alberta Environment are pleading with people in the province to stop dumping their pet fish into local bodies of water. Both fish and water from aquariums can have diseases and parasites which can hurt local species and ecosystems. Also, domestic fish will compete with native species for food and eat fish eggs. Goldfish and Prussian Carp are growing to be massive sizes in Alberta bodies of water and are being found across the province.


Net inflows of foreign direct investment (FDI) fell by 16 per cent globally in 2014, to US$1.2-trillion as a result of economic fragility, greater geopolitical risks and policy uncertainty. FDI flows to developed countries dropped by 28 per cent, to $499-bilion, their lowest level in a decade. Inflows to the US fell by 60 per cent to $92-billion and flows to Europe fell by 11 per cent to $289-billion. Owing largely to Asia, developing economies’ share of FDI inflows is rising steadily and accounted for 55 per cent of the global total. Services continue to take up the bulk of investment, accounting for 63 per cent of the global FDI stock, more than twice the share of manufacturing.


The periodical publication industry generated total operating revenue of C$2-billion in 2013. Expenses were $1.8-billion giving an operating profit margin of 8 per cent. Periodical publishers in Ontario generate 57 per cent of the industry’s operating revenues while Quebec firms accounted for 23 per cent. Controlled circulation periodicals accounted for 34 per cent of the total circulation compared with 28 per cent for subscriptions. Complimentary copies (20 per cent) and newsstand and other copies sold 18 per cent.


According to a General Social Survey on Social Identity by Statistics Canada, 63 per cent of Canadians have a very strong sense of belonging to Canada. By comparison, fewer people expressed a very strong sense of belonging to their province (45%) or to their local community (32%). Seniors and women most often reported a strong sense of belonging to Canada, their province and their local community.  In 2013, immigrants (67%) were more likely than non-immigrants (62%) to describe their sense of belonging as very strong.


A study of winning times spanning 165 years in the UK shows that racehorses are continuing to get quicker. Researchers say that more work is required to determine whether the increased speeds are due to breeding techniques or changes in training and riding techniques. Many in the horse industry had concluded that thoroughbreds might have reached the limits of their speeds. The winning times of only a small number of races including middle distances, 8 to 12 furlongs and long distances, 14 to 20 furlongs were analysed. The average winning time for a six furlong race over the past 15 years has been cut by more than a second, a huge amount by sprint standards and a modern day horse would beat a horse from the early 1990s by seven horse lengths.


The price of pepper has risen every year but one since 2009 while coffee has swung between gains and losses. Some farmers in Vietnam have switched a significant portion of their farms to pepper after prices more than doubled in five years. Vietnam is the biggest producer of pepper as well as the largest supplier of robusta beans which are beans with low acidity and high bitterness used in instant coffee and espresso. Pepper production has climbed 36 per cent in the past five years and the country now supplies about half of global exports. Vietnam also ships rice, tea and rubber.


The Bank of Italy estimates that prior to the financial crisis of 2008, entrepreneurs in the country were evading more than 50 per cent of the taxes they owed. Last year, the Italian government estimated tax evasion cost it US$127-billion. Statistics Canada estimates that in 2012 the amount of hidden economic action in Canada amounted to C$42-billion. The World Bank which uses a narrower definition estimates that in a cross section of industrialized countries, evasion ranged from 8 per cent to 30 per cent of GDP. It has Canada around the middle with 15.7 per cent, much higher than the Statscan figure.


Canadian mushroom growers reported 5.8-million square feet of growing area in 2014, down 5.3 per cent from 2013. Sales, however, increased four per cent to C$376-million. Ontario had the majority of sales with 59 per cent followed by British Colombia with 30 per cent. The fresh market represented 95 per cent of total mushroom sales.


Private wealth in Asia overtook that in Western Europe in 2014 and is set to overtake North America in 2015.  The strong performance of equity and bond markets contributed to a US$17.5-trillion increase in private wealth last year to a total of $164-trillion. Asia-Pacific, excluding Japan, provided over 60 per cent of that increase. China will account for 70 per cent of Asia’s wealth accumulation between now and 2019 and by 2021 it will overtake America as the world’s wealthiest nation.


A Norwegian company is developing packaging for mayonnaise that does not get stuck in its container. Getting the last bit of sauce out of a bottle is a common annoyance for shoppers. The company has announced a deal with a US company to use its Liquiglide non-stick coating in product packaging. The coating is completely harmless and meets safety standards because it can be made entirely from food. Liquiglide is also to be used by the US glue brand Elmer’s on its products.


The European Union is set to drop roaming charges within the Union by June 2017. The ban will be preceded by a 14-month interim period in which companies can still add surcharges, but at a reduced rate. The agreement is the culmination of years of campaigning to cut roaming charges and to define the EU nations’ approach to regulating internet traffic.


The State of California has passed a bill that imposes one of the strictest school vaccination laws in the US. It will require most schoolchildren to be vaccinated against diseases including measles and whooping cough. The bill has faced severe criticism from some who say that parents should decide whether their children are vaccinated. The move comes after an outbreak of measles at Disneyland in 2014 infected over 100 people in the US and Mexico. Mississippi and West Virginia are the only other two states with such strict requirements.


Kenya imports around 100,000 tonnes of second-hand clothes, shoes and accessories a year, many of which were originally donated to charity shops in the west. This has destroyed the local textile industries. East African heads of state have suggested that Kenya, Uganda and Tanzania should stop importing used clothes in an effort to revive the local textile industries, but the ban risks putting thousands out of work. More than 70 per cent of clothes donated globally end up in Africa. If the ban goes through, Kenyans will be compelled to buy locally produced clothes.


The European Parliament says that a proposed EU-US free trade deal must not give big firms the power to sue governments in private, secretive courts. Disputes must be settled publicly and transparently. The TTIP, which stands for Transatlantic Trade and Investment Partnership, is being negotiated by the European Union and it is estimated that by 2027 it could boost the size of the EU economy by US$132-billion, equal to 0.5 per cent of GDP.


Packaged Facts reports there are five key ingredients at the centre of multicultural wellness food trends. The first is the whole grain Teff, an ancient root used in African countries.  One cup of cooked Teff contains 123mg of calcium, the most of all grains, 225 calories, 10 grams of protein and 7 grains of fibre. Second is Avocado and then Matcha, a fine-ground green tea powder at the heart of the Japanese tea ceremony, Pepitas, the pumpkin seed kernels and finally, Lentils which are appearing on supermarket shelves in pastas, cereals, crackers, chips and flour.


France, the land of the long crusty baguette, boasts more artisan bakers supplying freshly cooked loaves than any other country in Europe. Yet sales of pre-cut bread, wrapped in cellophane and twist-tied with plastic fasteners, are booming. The market in packaged bread in France is now worth US$560-million a year.  Last year, sales of the leading brand of sliced bread reached 125,000 tonnes, up by 25 per cent on 2007. With the French taking less time for lunch, sandwiches are on the rise with over 2-billion sold in 2014. One company offers 18 different varieties of pre-packaged slices.


Germany now has one of the world’s most rapidly-aging and shrinking population, even though an increase in immigration has halted its overall decline since 2011. It is projected to lose about a third of its population by 2030. By 2060 it is estimated that the total number of Germans will have dropped by 20-million, equivalent to Romania’s population today.


The Sistine Chapel in Rome is one of the holiest sites in Christendom.  But crowds are now posing a problem. Four times as many people visit the Chapel as did in 1980. On the busiest days, more than 25,000 visitors pass through. The carbon dioxide (CO2) exhalation, sweat and dust which they bring in with them are endangering the Renaissance frescoes by Michelangelo, Botticelli and other masters.  In 2010 the Vatican commissioned a review of the frescoes, their only protection is a climate-controlled system that was designed for less than half as many visitors. A new US$5-million upgrade of the chapel’s climate-control and lighting system has been started. There is talk that once visitors reach 6-million a year, probably next year, only those with reserved tickets will be allowed in.


In 2014, the Wall Street bonus pool rose three per cent to US$28.5-billion, despite regulatory and legal issues eating at profits. Many employees took home an average bonus of $172,860 as the industry added 2,300 jobs in New York City. Bonuses rose even as profits from its broker-dealer operations of the New York Exchange members fell 4.5 per cent to $16-billion last year.


A contractor at the Volkswagen plant in Germany was setting up a stationary robot when it grabbed him and crushed him against a wall. Prosecutors are considering whether to bring charges and if so, against whom.