Economists say the sales and profit gains of early this year are disappearing, and they are increasingly pessimistic about short-term growth.
They also are gloomy because of the potential impact in the US from Europe’s financial crisis, the possible expiration of tax cuts in December and the prospect of major cuts in federal spending.
A survey by the National Association for Business Economics (NABE) released yesterday also found less evidence of hiring, confirming the trend in recent monthly jobs reports from the government.
In the quarterly survey of 67 economists who work for companies or industry trade groups, 22 percent reported rising employment this month, down from about 30 percent in the last three surveys and 42 percent a year ago. On the positive side, only 9 percent said employment was falling. The rest said it was unchanged.
Just 39 percent of the economists surveyed reported rising sales at their companies this month, down from 60 percent in April. There was a similar trend on corporate profit margins, with 29 percent reporting rising margins this month, compared with 40 percent in April.
“The survey results suggest worsening economic conditions,” said Nayantara Hensel, a business professor at National Defense University who analyzed the results for NABE. “The rising sales and profit margins experienced earlier in the year may have been short-lived.”
US employers added just 80,000 jobs last month, the third straight month of weak job growth. The unemployment rate was stuck at 8.2 percent. That has made the economy the overarching issue in the presidential election — it will be US President Barack Obama’s undoing if presumptive Republican nominee Mitt Romney convinces voters that he can do better.
The state of the economy may also determine the fate of the deep tax cuts that were passed under former US president George W. Bush and which expire at the end of December. A weak economy will bolster proponents of extending the cuts, which opponents complain favored the wealthy.
Nearly two-thirds of the NABE members surveyed this month said they were worried that their companies’ sales would suffer if the tax cuts end and automatic cuts in federal spending begin in January because of Congress’ failure to approve a long-term deficit-reduction plan.
As the economy continues to plod along at a sluggish pace, it has made forecasters gloomier about the next 12 months.
In the NABE survey, 40 percent said the economy would grow 2 percent or less over the next year. Three months ago, only 23 percent were that cautious.
That led them to lower their expectations for hiring. Only 23 percent predicted that employment would rise over the next six months, down from 39 percent who expected more hiring in April.
The economists were upbeat about one thing: They see little indication of inflation, with few reporting higher prices or raw-material costs.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six