1 Eurozone industrial production falls (Phillip Inman in The Guardian) Industrial production in the eurozone slumped in August by 0.5%, according to official figures that illustrate the impact of falling demand for Europe’s cars and machine tools in China and the east Asia. The latest figures showed an even bigger drop in the year-on-year growth rate to just 0.9% growth when a rise of 1.8% had been expected.
The weak figures are expected to put pressure on the European Central Bank to expand its stimulus programme when it meets next week in Malta. ECB boss Mario Draghi has hinted that €60bn a month of bond purchases under its quantitative easing plan until September 2016 could be increased in size or extended at the meeting on 22 October.
A 1.1% fall in Germany was more than offset by a 1.6% rise in France, but the weight of declines among Europe’s smaller countries dragged down the total for the currency bloc’s 19 members. A 4.3% decline in the Czech Republic’s industrial output spearheaded a long list of fallers that included the Netherlands, down 1.5%, Denmark (-1.1%) and Spain (-1.3%).
The situation in Germany is unlikely to improve in the next few months, according to analysts who say recent surveys and the Volkswagen scandal will only add to Berlin’s recent woes. The ZEW surveys of economic expectations among business leaders plunged from 12.1 to 1.9 points.
2 Wal-Mart predicts lower profits (BBC) Shares in the world’s biggest retailer, Wal-Mart, have plunged after it cut its profit forecast. The company said it expected earnings per share to drop by between 6% and 12% in the next financial year. The announcement sent shares of the company tumbling by 8%, their biggest fall in six years.
Wal-Mart said the lower profit forecast was because it was investing in e-commerce as well as increasing employee wages. The retailer’s spending efforts are in part a reaction to slowing sales, and competition from online retailers like Amazon. It is also spending more to train and retain employees. In April, the company raised its base salary to $9 per hour and will increase it to $10 next year.
Wal-Mart has blamed the fall in part on the strong dollar affecting overseas sales, something that has also affected other US retailers. Profits for the company dipped over the summer as sales in its UK supermarket chain, Asda, declined.The retailer also announced it would repurchase $20bn in shares from investors.
3 World’s most powerful cities (Cleofe Maceda in Gulf News) London is the most powerful city in the world, according to a new survey. The Mori Memorial Foundation’s Institute for Urban Strategies has released the results of its latest Global Power City Index (GPCI) 2015 report, which rates 40 global metropolises according to their desirability or power to attract human capital and businesses from around the world.
The cities representing Europe, Africa, Asia, North America and Latin America were assessed according to six key strengths : economy, research and development, cultural interaction, livability, environment and accessibility.
London, which has held the top spot every year since hosting the 2012 Olympic and Paralympic Games, emerged as the overall winner for 2015, followed by New York, Paris, Tokyo and Singapore in the top five. Completing the top ten list are Seoul, Hong Kong, Berlin, Amsterdam and Vienna.
London took the top spot for cultural interaction and did consistently well in most of the other key indicators, ranking second in economy, third in research and development, and second in accessibility. The city, however, needs to improve its livability, taking only the 19th spot in the same category.
In the economy category, which took into account gross domestic product, wage level, total employment, corporate tax rate and total market value of shares on stock exchanges, among others, Tokyo topped the list, making it the most economically powerful city in the world.
In terms of research and development, New York is a clear powerhouse to reckon with. For livability, Paris emerged as the clear winner, while Geneva emerged as the winner in terms of environment. In terms of accessibility, Paris earned the highest score.