Economic Digest – December 2015
The weak Canadian dollar isn’t just hurting cross-border shopping. Some U.S. airports that enjoyed a surge in the number of Canadian passenger levels when the loonie was valued higher that the American dollar, are now seeing the flip side of currency swings. Low ticket prices drew five million Canadians annually in recent years to fly out of the U.S. Some airports have seen a reduction in Canadian passengers of up to 10 per cent this year. But some airports have seen little drop-off in Canadian passenger volumes because of lower U.S. fares even with the loonie’s devaluation. The Canadian airline sector has long called upon Ottawa to lower airport rents, fees and taxes to stem the flow of passengers crossing the border to catch flights. Canada has the fifth-highest ticket and airport charges out of 140 countries.
Fiscal deficits are at record highs for oil exporters in the Middle East and North Africa, thanks to a halving of the oil price since 2014 to around US$50 a barrel. The IMF estimated that oil-export revenues will be $360 billion lower this year than if prices had remained at 2014 levels. Governments are already adjusting to the new price, cutting spending and running down foreign-exchange reserves.
A decline in diamond prices because of lower growth in Chinese jewellery demand is dulling the appeal of Canada’s Arctic diamond industry, with the resulting drop in exploration hurting the region’s long-term prospects. Exploration spending on the diamond-rich Northwest Territories, the worlds third-biggest producer, is forecast to drop 54 per cent this year. That is bad news for an industry where even profitable deposits can take 10 to 20 years to develop into a mine. Once the engine for booming diamond demand, the growth in China’s appetite for polished gems has slowed alongside its economy.
The top 100 US CEOs are sitting on a retirement nest egg of US$5-billion, equal to the total retirement savings of 116-million of the poorest Americans according to a recent study. The average top 100 CEO retirement funds is $49.3 million, enough to generate monthly retirement cheques of $277,686. The average monthly payment works out to be 16 times what the US president is due to receive when he leaves office. According to the General Accounting Office, nearly 29 per cent of US households with members aged 55 or older have neither retirement savings nor a traditional pension plan.
New research claims that rising temperatures and humidity due to climate change are likely to increase the number of days with unsafe “heat stress”, putting South East Asia at great risk of significant drops in productivity. South East Asia over the next three decades could lose 16 per cent of its labour capacity due to rising heat stress. It is predicted that the biggest losses in productivity will be in Singapore and Malaysia with 25 and 14 per cent decreases from current levels. Indonesia could see a 21 per cent drop, Cambodia and the Philippines 16 per cent and Vietnam 12 per cent.
The Chinese Communist Party has banned all 88-million of its members from joining golf clubs in its latest update of party discipline rules. Extravagant eating and drinking and abuse of power are also formally banned. If caught, members could either receive a warning or be removed from the party. China announced a ban on building new golf courses in 2004, however the ban has not always been enforced as the number of golf courses has increased from 200 in 2004 to 600 in 2015. Last March, China shut down 66 illegally built courses.
The National Trust in the UK is a wonderful organization. It safeguards 160 historic houses, 40,000 archaeological sites, 775 miles of coastline and 250,000 hectares of countryside. It even owns and manages 59 villages. Last year the Trust had an income of nearly US$900-miillion with its largest single source of income being from memberships at $250-million.
A Dutch team who have grown the world’s first burger in a lab say they hope to have a product on sale in five years. Researchers are to set up a company to look at making the burger tastier and cheaper. The team had a prototype cooked and eaten in London two years ago that cost US$450,000 to make. The lab-grown burger was developed in a laboratory at Maastricht University. The burger is made from stem cells: the templates from which specialised tissue such as nerve or skin cells develop. The motivation for the research is to find ways of keeping up with the growing demand for meat.
A restaurant group that includes some of Manhattan’s most well-regarded dining spots is to take the potentially revolutionary step in the US of eliminating tipping. This will bring the establishments in line with dining practices in Europe, Asia and elsewhere where tipping is either non-existent or perfunctory. The company which employs some 1,800 people at more than a dozen popular spots has not yet specified how staff would be compensated for the loss of tips.
In 2011 South Africa’s ostrich farming industry was decimated by an outbreak of bird flu, and a ban by the European Union on the importation of fresh ostrich meat. Some 48,000 birds were culled, thousands of workers lost their jobs and several farms went out of business. But four years later, the ban has been lifted and the sector is recovering. The first commercial ostrich farm was established in South Africa in about 1860, solely for harvesting the feathers every six to eight months. Farms began to spread gradually to other countries, particularly Egypt, Australia, New Zealand, the US and Argentina. By 1913 the number of ostriches raised commercially reached over one million.
Spending by Chinese travellers to Canada is up sharply as China closes in on second place among our largest sources of foreign tourists. The most recent report on debit and credit card spending in Canada shows that Chinese visitors increased their use of credit cards by 30.2 per cent in the third quarter of 2015 compared with a year earlier. That’s dramatically higher than the 12.5 percent overall increase in spending on all foreign cards. Chinese visitors have overtaken those from Britain as the second-highest credit card spenders in Canada. The most spending on Chinese credit cards in Canada takes place in apparel stores while the biggest category of US visitor spending is at restaurants.
A new study suggests that bats provide a service worth an estimated US$1-billion globally by controlling pests on corn crops. Scientists carried out a series of experiments to assess the economic and ecological importance of the nocturnal insect-eating mammals to farmers. Globally, bat populations are under pressure as a result of habitat loss and the spread of diseases. The US National Wildlife Centre estimates that bat populations in the north-east of the country have declined 80 per cent since the first reported cases of bat fatalities due to a disease that was first reported in a cave in New York in 2006.
British companies have created a device to deter drones from entering sensitive areas by freezing them in mid-flight. The system works by covertly jamming a drone’s signal, making it unresponsive. After this disruption, the operator is likely to retrieve the drone believing that it has malfunctioned. A drone flying in a sensitive area can be detected by a radar system and then sighted via a camera equipped with thermal imaging capabilities and then be targeted visually. The whole process takes about 25 seconds. Aviation authorities are increasingly concerned about nuisance hobbyists flying drones close to large aircraft at airports. The US FAA is now receiving around 100 reports a month from pilots who have sighted drones within a five-mile radius of their aircraft.
Female truckers are sliding into long-haul cabs as companies seek to end a US driver shortage, and they are proving to be better behind the wheel than men. Whether measuring accidents, inspections or compliance issues, women drivers are outperforming men. One major company expects women to make up about 10 per cent of the freight haulers 9,000 drivers by year’s end, and that is almost twice the national average. Trucking companies see women as a large untapped labour pool that may ease a driver shortage that’s expected to grow to 400,000 by 2017. Women now account for 5.8 per cent of the 3.4-million US truck drivers, compared with 4.6 per cent in 2010.
The pledge by McDonald’s Corp to phase out eggs laid by caged hens in its North American restaurants will increase competition for limited supplies of cage-free eggs. For the egg industry, the transition to cage-free production will be slow and expensive. Only 6 per cent of US hens, or about 18-million birds, are currently raised without cages. Farmers say it can take up to five years to build new cage-free facilities or retrofit barns because they must obtain permits and raise money. It is normal for US farmers to provide about 80 square inches per bird in caged operations, which is less than the size of a sheet of notebook paper. Cage-free facilities are often constructed with the equivalent of about 144 square inches per hen, though the chickens can move over larger areas.
Scottish scientists believe they have found the secret to making an ice cream that does not melt so quickly on hot summer days. Researchers have found a naturally occurring protein that makes the ice cream mixture more stable meaning it melts more slowly and is smoother in texture. The new ingredient means ice cream will melt eventually but hopefully it will keep stable for longer and will stop the drips.
New regulations have been proposed that stipulate that certain types of vessels built after 2016 have to be fitted with bulky equipment that converts nitrogen oxides into nitrogen and water and unless they have this equipment, they will not be allowed to sail into US waters. The regulation will apply to all newly-built boats over 24 metres long with a gross tonnage of 500 tonnes or more to cut their sulphur and nitrogen oxide emissions by nearly 80 per cent. Builders are protesting that the rules threaten their industry because the engine rooms of some superyachts are too small to accommodate the new equipment, meaning they would have to lose a guest cabin to make room for the technology.
Two decades after the Beijing declaration on gender equality, women’s economic opportunities and working rights are still subject to restrictive legislation. About 155 countries have at least one law that limit women’s economic opportunities, while 100 put restrictions on the types of jobs women can do and 18 countries allow husbands to dictate whether their wives can work at all. This is according to a World Bank report that paints a stark picture of the enduring obstacles women face in achieving economic empowerment.
Total operating revenues for the real estate agents and brokers industry in Canada was C$10.4-billion in 2013. Total operating expenses were $7.7-billion yielding an operating profit margin of 25.7 per cent. Ontario was the largest real estate market in Canada accounting for 51.6 per cent of total operating revenue earned by real estate agents, followed by British Columbia with 14.6 per cent, Quebec 14.1 per cent and Alberta 12.4 per cent
The electric bike market is anticipated to grow from US$6.9-billion in worldwide revenue in 2012 to $11.9-billion in 2018. China is expected to buy 42-million of the projected 47-million e-bikes that will be sold in 2018, 89 per cent of the world’s market. The total cost of running an e-bike per kilometre is estimated to be less than five cents, including purchase price, energy costs and the cost of running the vehicle. The typical distance covered on a single battery charge is 80 kilometres.
A French woman has won a disability grant after telling a court she suffers from an allergy to electromagnetic radiation from gadgets. She was told that she could claim US$1,000 a month for three years. Electromagnetic hypersensitivity is recognised by the World Health Organisation (WHO) though it says the causes are unclear.