AUSTRALIA
Spending drop stalls growth
Economic growth stalled in the third-quarter of the year with consumer spending running out of steam as house prices fell further, official data showed yesterday. The economy grew a meager 0.3 percent between July and September, the slowest rate in two years and far below market expectations. The Australian dollar — buoyed by 27-years of straight growth — slid against the US dollar on the news. JP Morgan economist Tom Kennedy said the data came with “ominous” signs from consumers. “The consumer has outperformed relative to fundamentals for the past almost two years,” he said. “Now a combination of weak wages, slowing housing, limited wealth effect and high debt are really starting to culminate in a pretty ominous backdrop for household spending.”
AUSTRALIA
Encryption bill likely to pass
Police and intelligence agencies look set to be given the power to access encrypted messages on platforms such as WhatsApp, as the nation becomes the latest to face down privacy concerns in the name of public safety. Amid protests from companies such as Facebook Inc and Google, the government and main opposition on Tuesday struck a deal that should see the legislation passed this week. Under the proposed powers, technology companies could be forced to help decrypt communications on popular messaging apps, or even build new functionality to help police access data. Prime Minister Scott Morrison has said the legislation is needed to help foil terrorist attacks and organized crime. Critics say it is flawed and could undermine security across the Internet, jeopardizing activities from online voting to market trading and data storage.
EUROZONE
Growth pace floundering
The euro area is showing no signs of a meaningful economic rebound, with Italy on the verge of recession after the populist government picked a fight with European authorities over spending plans. IHS Markit’s purchasing manager’s index for manufacturing and services in the 19-nation bloc fell last month to 52.7 from 53.1 in October. While the reading exceeded an earlier estimate, it was the worst since September 2016 and suggests only a marginal pickup in the pace of growth to 0.3 percent in the fourth quarter, the report said. “The region remains stuck in a soft-patch,” IHS Markit economist Chris Williamson said. “The survey responses highlighted intensifying headwinds of Brexit and trade-war worries, a struggling autos sector and rising uncertainty regarding the economic and political outlook.” The slowdown is starting to affect the labor market. Employment expanded at its weakest pace in nearly two years last month, with Germany, France and Ireland faring particularly poorly.
SHIPPING
Maersk to go carbon-neutral
Maersk, the world’s biggest container shipper, aims to be carbon neutral by 2050, in a challenge to the rest of the world’s fossil fuel-dependent fleet. The Danish company yesterday said it aims to have carbon-neutral vessels commercially viable by 2030 by using energy sources such as biofuels and would cut its net carbon emissions to zero by 2050. The shipping industry, which carries about 80 percent of global trade, accounts for 2.2 percent of carbon dioxide emissions, the UN’s International Maritime Organization says.
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
Six years ago, LVMH’s billionaire CEO Bernard Arnault and US President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the world’s best-known luxury brands. However, since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees said. The site has consistently ranked among the worst-performing for Louis Vuitton globally, “significantly” underperforming other facilities, said three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plant’s problems — which have not
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