Archive | October, 2012

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Companies need to plan for slower global growth

As promised, the blog looks today at the business implications of population ageing and slower economic growth. The chart shows official US household expenditure data, by category. The overall message is clear: spending peaks by the age of 55 years, and then falls away quite sharply as people age. This matters because household consumption is […]

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Ageing populations mean decades of slower growth

The next few decades will see very much slower economic growth in most countries. This will have critical implications for business strategy, as the blog summarises in a new Research Note. Encouragingly, the Financial Tmes has devoted a column to its argument, focusing on the implications for the UK. The Research challenges the current consensus […]

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Buyers start selling benzene as demand disappears

What happens if prices stay unaffordable for so long, that the consumer eventually stops buying? Younger readers may not remember such a period, as it last happened in the early 1980s, before the SuperCycle began. But it looks as though they may be close to finding out. As ever, benzene is the key indicator for […]

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Doing nothing is not a good option

The blog was interviewed by ICIS’ Will Beacham on its budget outlook this week. Key points from our discussion were: On the short-term outlook “Let’s just say that things are going to be pretty flat. The fourth quarter and first quarter of 2013 are looking pretty flat and that doesn’t give much grounds for optimism. […]

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US housing starts rise as investors buy into rental sector

US housing markets have been a disaster for many homeowners. Overall, they have lost $6tn since the collapse began in 2006. Nationally, prices are still down 32% versus their peak, according to the Case Shiller Index. Temporarily, however, the market is continuing to stabilise. Banks have slowed the rate of foreclosure, and are wary of […]

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Global auto sales growth slows

The impact of sustained high oil prices is becoming very clear in global auto markets. Car sales are facing major headwinds with gasoline and diesel prices at, or near, record levels in many countries. The chart shows combined sales in the 3 major markets – China, US, Europe – to September: • Overall, sales (red […]

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Goldman Sachs follows the blog on oil prices

The blog is awarding itself and fellow-blogger John Richardson a pat on the back this morning. The reason is that investment bank Goldman Sachs, the largest player in commodity markets, has completely reversed its analysis of oil markets. They now accept our view that there is no fundamental reason for oil prices to be at […]

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US companies’ revenue starts to fall, as higher oil prices bite

Whisper it quietly, so as not to disturb the world’s central bankers as they rest. But the impact of their latest round of quantitative easing programmes (yellow highlight, QE3) may already be slowing. As the chart shows, these had an immediate impact on financial markets from their launch in June: • The benchmark S&P 500 […]

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Budgeting for an L-shaped recovery

As companies finalise Budgets for 2013-15, many will be thinking long and hard about the implications of the IMF’s new economic forecast: “The recovery continues, but it has weakened. In advanced countries, growth is now too low to make a substantial dent in unemployment. And in major emerging market economies, growth that had been strong […]

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Vertical farming brings food to the cities

Current farming techniques haven’t changed much over thousands of years. Yet the people who eat the food that comes from farms no longer live next door to them. So the food has to be transported ever-greater distances – sometimes thousands of kilometres – to reach the market. A new business model is badly needed to […]

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