WCA March 2017

From the Americas

The FOMC expects factory production to grow three per cent in 2017 and 2.8 per cent in 2018, before slowing to 2.6 per cent in 2019 and two per cent in 2020. In the context of the Great Recession of 2008 which greeted his predecessor, even the famously dyspeptic Mr Trump might be inclined to acknowledge that the American economy at the start of 2017 finds the nation – and its new president – in a good place.  Late last year, CNBC.com economics reporter John W Schoen posed a pertinent question: “If the recovery continues to build momentum, will history credit Trump or Obama?” (“Obama’s Biggest Parting Gift to Trump May Be the Economy,” 2 nd December). Mr Schoen observed that President Trump will, at least in part, be judged by historians by his stewardship of the USA economy. American voters will also have a chance to weigh in on that when they return to the polls four years hence.  Citing the Chinese car website Autohome (via Autoverdict ), Stephen Edelstein of Green Car Reports said (3 rd December) that General Motors may re-badge a current-generation Chevrolet Volt as a Buick Velite, for sale in China. GM has marketed re-badged first-generation Volts (the Holden Volt in Australia and New Zealand, the Vauxhall Ampera in the United Kingdom, the Opel Ampera elsewhere in Europe), but the Chinese version of the plug-in hybrid would be the first to be redesigned, as well. At Auto Guangzhou 2016, held in November, GM China unveiled a Buick Velite concept car, featuring a low, aerodynamic hatchback shape but without any accompanying technical details. The company said the car’s flowing lines and sculpted rippling curves were influenced by flowing water – a new design language for Buick. The Autohome report included photos of a Buick-badged Volt, said to be supplied by the Chinese Ministry of Cars, the regulatory agency that manages approval of new models for sale in China. In Mr Edelstein’s opinion the car’s styling bore a strong resemblance to that of the Volt available in the USA.  Volkswagen is rebounding from its diesel emissions scandal with an ambitious initiative for blanketing cities with shared self-driving electric shuttles by 2025. As described by Tom Brant on pcmag.com (5 th December), the German automaker’s new Moia subsidiary, which will launch shuttles that urban commuters can hail with a tap on a smartphone, is “part ride-sharing service, part futuristic public transportation provider.” TechCrunch reported that Moia, from headquarters in Berlin, hopes to begin operations in two European cities by the end of this year, with expansion later to China and the USA. Eventually, Moia will build its own autonomous electric shuttles to serve riders on fixed routes during peak demand periods, with Gett – the ride-share company which has received significant investment from Volkswagen – as a backup for passengers who want to go where it isn’t practical for a shuttle to take them. Automotive

The USA The start of a new administration finds the American economy in a good place – but will President Trump leave well alone? The leadership qualities of the mercurial man elected by Americans to be their 45 th president are, at this early stage, unknowable. But this much can be stated with certainty: the national economy that President Donald J Trump inherits from President Barack H Obama is very much healthier than the one bequeathed by President George W Bush to Mr Obama in 2008. When Mr Trump took the oath of office on 20 th January 2017, the near-term outlook for the economy was bright. The best standard for evaluating any nation’s economy is gross domestic product (GDP), and expert opinion in the USA projects near-term GDP growth rate in the ideal range. Unemployment is seen continuing at the “natural rate” estimated by the Federal Reserve. There is not too much inflation, nor is there too much deflation. Taken together, these are indications of a Goldilocks economy – not too hot, not too cold, just right. Writing on the personal financial advisory website The Balance (“US Economic Outlook for 2017 and Beyond,” 29 th December), Kimberly Amadeo recalled Mr Trump’s pledge to increase economic growth to four per cent, which she noted could stir “the irrational exuberance that creates damaging booms and busts.” But, presuming that bit of candidate’s hyperbole is left behind with the campaign detritus, the Federal Open Market Committee (FOMC) – the branch of the Federal Reserve Board that determines the direction of monetary policy – sees USA GDP growth rising to 2.1 per cent in 2017 (up from 1.9 per cent [estimated] for 2016 and the same as the 2015 rate) before flattening to 2.0 per cent in 2018. The unemployment rate is expected to drop to 4.5 per cent in 2017 and 2018 – better than the 4.7 per cent rate in 2016 and also beating the Fed’s own 6.7 per cent target. While much of the job growth will be in part-time work in service industries, given the permanent disappearance of many high-paying jobs in the era of globalisation the trend is encouraging. In a longer perspective, the Bureau of Labor Statistics (BLS) expects total employment in the USA to increase by 20.5 million jobs over the period 2010-2020. A particularly bright spot is construction, set to add 1.8 million jobs as housing recovers.  Meanwhile, inflation will be 1.9 per cent in 2017 and 2.0 per cent in 2018, according to the FOMC. These rates are higher than the 1.5 per cent of 2016 and 0.7 per cent of 2015 (both dampened by the low oil prices of those years), but the core inflation rate – excluding gas and food prices – will be 1.8 per cent in 2017 and 2.0 per cent in 2018. That meets the Fed’s target. For an additional piece of good-news reporting, manufacturing in the USA is forecast to increase faster than the general economy.

BigStockPhoto.com Photographer: Aispl

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Wire & Cable ASIA – March/April 2017