Some US manufacturers feeling China trade war pinch

About a quarter of US manufacturer said in the survey that they were delaying planned investments, and 16 percent reported having to raise prices. (AFP)
Updated 16 July 2018
0

Some US manufacturers feeling China trade war pinch

WASHINGTON: Some US manufacturers are delaying investments and raising prices as President Donald Trump escalates trade wars with key US economic partners but most companies report no change, according to a survey released Monday.
The National Association for Business Economics also found in its monthly report that members unanimously expected economic growth to continue in the next year, with most forecasting inflation adjusted growth of more than two percent.
“Labor market conditions are tight with skilled labor shortages driving firms to raise pay, increase training and consider additional automation,” Sara Rutledge, chair of the quarterly survey, said in a statement.
Companies reported rising profits and higher sales expectations. But despite the scarcity of workers, a survey index of wage growth slowed after hitting a record in April.
The survey, which polled 98 economists at private companies and trade associations, also found signs of rising prices, a possible sign that inflation and Trump’s new import duties were filtering into the economy.
An index of prices charged hit a 12-year record, jumping 14 points, while a measure of materials costs hit a seven-year record, soaring 15 points.
Trump this week began the process to impose tariffs on up to $200 billion in additional imports from China, adding to the levies imposed on $34 billion in goods which took effect earlier this month.
Economists say this could boost inflation, which already is beginning to rise after a decade of economic recovery, albeit gradually.
Still, a majority in the NABE survey, 65 percent, said trade concerns were not causing their companies to change plans for investment, hiring or pricing.
Things were chillier in the goods producing sector, however, with only 37 percent reporting no change.
Among manufacturers, 26 percent said they were delaying planned investments and 16 percent reported having to raise prices.
And, as the same survey had found April, most respondents, or 65 percent, said they were not changing plans to hire or invest because of December’s sweeping corporate tax cuts.


Philips to close its UK factory in 2020, with loss of 400 jobs

Updated 17 January 2019
0

Philips to close its UK factory in 2020, with loss of 400 jobs

AMSTERDAM/LONDON: Dutch health technology company Philips said on Thursday it planned to close its only factory in Britain in 2020, with the loss of around 400 jobs, the latest firm to move manufacturing jobs out of Britain.
The move is part of a push by Philips to reduce its large manufacturing sites worldwide to 30 from 50, and a spokesman said the decision had no direct link with Britain’s decision to leave the European Union.
However, the company said in a statement that it had to “pro-actively mitigate the potential impact of various ongoing geopolitical challenges, including uncertainties and possible obstructions that may affect its manufacturing operations.”
The factory in Glemsford, Suffolk, produces babycare products, mainly for export to other European countries. Almost all its activities will move to Philips’ plant in Drachten, the Netherlands, which already employs around 2,000 workers.
“We have announced the proposal after careful consideration, and over the next period, we will work closely with the impacted colleagues on next steps,” said Neil Mesher, CEO of Philips UK & Ireland.
“The UK is an important market for us, and we will continue to invest in our commercial organization and innovation programs in the country.”
Once a sprawling conglomerate, Philips has transformed itself into a health technology specialist in recent years, shedding its consumer electronics and lighting divisions.
The firm has previously warned that Brexit would put Britain’s status as a manufacturing hub at risk.
Chief Executive Frans van Houten last year said that without a customs union — which has been ruled out by Prime Minister Theresa May — Philips would have to rethink its manufacturing footprint.
Britain is set to leave the EU on March 29, and politicians are at an impasse over how to do so after lawmakers overwhelmingly rejected May’s proposed withdrawal agreement on Tuesday.
Other firms have moved jobs out of Britain in recent weeks, sparking alarm among lawmakers that Brexit is impacting corporate decision-making.
Jaguar Land Rover has slashed UK jobs — mainly due to lower Chinese demand and a slump in European diesel sales — while Ford has said it will slash thousands of jobs as part of its turnaround plan.
While both decisions were driven by factors other than Brexit, each firm has also been vocal in warning of the risks of no-deal Brexit, where Britain leaves abruptly in March without a transition period.