Economic Digest – November 2016
North America’s wettest harvest in about five years hiked farmers’ costs as they dried crops to avoid spoilage. One fifth of US and Canadian crop belts were soaked by abnormally high precipitation at the end of summer. With three-quarters of US corn and soybeans still in fields and spring wheat unharvested in Saskatchewan, Canada’s biggest wheat-growing province, many farmers could face discounts for damaged crops. Sloppy field conditions have forced some farmers to hire extra workers, including one dedicated to a standby tractor to tow trucks out of the mud.
By the end of the year, some 3.5-billion people, or 45 per cent of the world’s population, will be internet users. China and India, the world’s most populous countries, do not just boast the top two spots in online population, they are also home to the most people still off line, accounting for 40 per cent of the world’s unconnected. Thanks to the rapid expansion of mobile networks, and the wide ownership of devices that connect to them, internet access has spread to places where traditional infrastructure is lacking. Mobile subscribers are expected to outnumber those with electricity or running water at home by 2020.
The country’s sovereign wealth fund which is used to invest abroad the proceeds of Norway’s oil and gas sales has amassed a bigger fortune thanks to bumper oil prices. The annual revenues it generates now regularly exceed income from oil sales. By October of this year, the fund was worth US$882-billion, more than double national GDP. It owns more than 2 per cent of all listed shares in Europe and over 1 per cent globally. Its largest holdings are in Alphabet, Apple, Microsoft and Nestle, among 9,000 firms in 78 countries. A budgetary rule stops the government from drawing down more than the fund’s expected annual return, set at 4 per cent a year.
Canada is pumping so much oil to the US that there are not enough pipelines to carry it. Pipelines are being filled to capacity and threatening to push more crude into rail cars. US imports jumped 17 per cent recently to 3.46-million barrels a day. Crude output is expected to rise about 5 per cent to more than 4-million barrels a day in 2017, above the country’s pipeline capacity.
A number of small vending machines dotted about French train stations that dispense short stories for free at the press of a button are becoming increasingly popular. The vended stories range from humour and children’s to horror and romance and are taken from a database of 5,000 anonymous authors. There are now 32 machines across France at train stations, cafes, museums and libraries, including 11 in Paris, with plans for more by the end of the year. Stories are printed on a paper scroll and readers are free to consume as many tales as they wish before their train arrives or they are booted out of the café. There is one machine in San Francisco that dispenses tales in English.
The global airline industry association (IATA) reports that more deterrents are needed to deal with a rising number of incidents involving disruptive passengers aboard planes. The number of incidents involving unruly passengers on board aircraft increased to 10,854 last year, up from 9,316 in 2014. That equals one incident for every 1,205 flights. The number of what are considered to be air rage episodes in Britain has quadrupled to 386 dangerous incidents last year from 85 in 2013.
Telsa is the most trusted car brand in Canada, despite having sold far fewer cars in the country than any other major auto company. This is according to a University of Victoria second-annual Brand Trust Index which ranks 276 national brands subdivided into 27 industry sectors. This year’s top ten trusted brands, President’s Choice and Mountain Equipment Co-op (MEC) were tied for first. Costco, Home Hardware and Shopper’s Drug Mart were next. Data was collected from 6,384 online surveys.
Monaco has started work on a US$4-billion operation to claim 16 hectares (15 acres) from the sea in the miniscule principality’s latest attempt to build more luxury housing for the world’s wealthiest residents. The foundations for the titanic operation will take 40 months to complete and require dredging up and transporting hundreds and thousands of tons of sand from Sicily to create dry land in a move that environmentalists warn will damage marine life. Monaco’s land extension project will include 60,000 square metres of luxury apartments and shops. Monaco currently has a surface of 485 acres of which nearly 100 acres were recovered from the sea over the past few decades.
The Canadian greenhouse, nursery and sod industries continue to expand as total sales increased from C$3.3-billion in 2014 to $3.7-billion in 2015. Greenhouse products accounted for 76 per cent of all sales. Greenhouse flower and plant sales increased 3.6 per cent and sales of fruit and vegetables were up 2.9 per cent. Close to half of potted plant sales came from Ontario which generated 68 per cent of the sales value of cut flowers in Canada. BC accounted for 23.5 per cent and Quebec 10.9 per cent. Greenhouse vegetable sales totalled $1.3-billion in 2015, about $300-million higher than the value of field grown vegetables.
France is jumping on the bandwagon by enacting a ban on all plastic dishes, cups and utensils which comes into effect in 2020 after which all disposable utensils and dishes must be made of biological, rather than petroleum-based material. Organizations representing packaging manufacturers are fighting the ban saying that it violates European Union commerce rules. The ban follows a similar French ban on plastic bags.
All sorts of experiments have been done in an attempt to keep birds away from planes. Collisions with birds are reckoned to cost America’s airlines almost US$1-billion in repairs and flight delays annually. Now, an ornithologist has come up with a bird scarer that might be the answer. He thinks the trick is to blanket the area around a runway with a noise that makes it difficult for birds to communicate. Sound is already used to scare off birds: examples include the boom of propane cannons and recordings of predatory hawks, but birds soon get used to such ruses.
Prices for lobster in North America recently reached their highest point in more than ten years and could become the typical bottom line as demand for processed lobster meat grows. The wholesale price of a 1 ½ pound hard-shelled lobster in August reached US$8.50, the highest price for the month since 2005. In September, consumers were typically paying $9- to $11 for a live lobster. The higher prices are a product of several factors, including the ebb and flow of lobstermen’s catch and the demand from Asian countries that are developing a taste for the East Coast treat.
Getting a signing bonus is often associated with top young athletes. Now, taking a job driving a chemical truck in the US can earn you a signing bonus of US$5,000, and then there are recruiting bonuses, retention bonuses and safety bonuses. These tactics are being used by some companies to fill positions as unemployment lingers near the lowest level since before the last recession. The situation is cropping up across the US as businesses feel increasing pressure to offer better wages to attract workers.
A tax evasion amnesty in India has prompted tens of thousands of people to declare more than US$9.5-billion in undeclared income and assets. The government contacted about 700,000 suspected tax evaders earlier this year urging them to declare hidden income and assets. The amnesty bought in 64,275 declarations. They were told that they would not be pursued by the authorities if they came clean and paid a penalty. Those who came forward included a group of street food owners in Mumbai who are said to have declared nearly $7.5-million. It does not account for money stashed in Swiss banks and overseas tax havens which some government investigators believe amounts to around $500-billion.
Governments have launched a crackdown on the rampant billion-dollar trade in rosewood lumber that is plundering forests across the planet to feed a booming luxury furniture market in China. Rosewood is the world’s most trafficked wild product accounting for a third of all seizures by value, more than elephant ivory, pangolins, rhino horn, lions and tigers put together. With a beautiful deep red glow, rosewood is the traditional wood used for elite, classic furniture in China. One huge bed was recently on sale for US$1-million. The trade is now worth $2.2-billion a year.
Costly baggage charges, and overpriced in-flight food and drink helped the world’s biggest airlines rake in an extra US$26-billion last year. United collected the most in “ancillary” revenue, (defined as everything not included in the airfare in 2015), a whopping $6.2-billion, followed by American, $4.7-billion, and Delta, $3.8-billion. The US Spirit Airlines has truly built its business model around exorbitant charges with 43 per cent of its revenue coming from baggage and booking fees and the sale of in-flight refreshments.
Oxford University has come top of the Times Higher Education world university rankings, a first for a UK university. Oxford knocks California Institute of Technology, the top performer for the past five years. There are warnings that the vote to leave the EU could destabilise UK higher education. The rankings show a mixed picture for European universities, while Asian universities continue to rise. Third was Stanford University followed by Cambridge and Massachusetts Institute of Technology.
Seven species of the yellow-faced bee native to Hawaii have become the first bees to be added to the US federal list of endangered and threatened species. Conservationists say the bees face extinction through habitat loss, wildfires and the introduction of non-native insects and plants. The bees are crucial to pollinating some of Hawaii’s endangered plants Other threats to the bees include feral pigs and invasive ants.
Sweden is to give a tax break for repairs on everything from bicycles to washing machines in an attempt to tackle the “throwaway culture.” The government hopes it will no longer make sense to throw out old or broken items and buy new ones. It is also considering a proposal that would allow people to claim back from income tax, half the labour cost on repairs to appliances such as fridges, ovens, dishwashers and washing machines.
Twelve miles off Namibia’s arid southern coastline, 150 metres below the ocean waves, diamond miners are hard at work securing a future for diamond mining. With the precious gems expected to run out on land in a little as 15 years, De Beers is building up a naval fleet to protect its interests. Five specially-adapted ships with giant tractors and drills between them mine more than one million carats a year from rich alluvial deposits scattered out to sea by the mighty Orange River.
An AirAsia flight from Sydney to Malaysia ended up in Melbourne instead when the pilot entered the wrong coordinates into the internal navigation system. Melbourne is 722km southwest of Sydney, Kuala Lumpur is 6,611km to the northwest.