Posts Tagged ‘growth’

“Woooah There, Economy!”

Wednesday, March 2nd, 2011

apartment-buildings-china.jpeg
(photo credit: Jakob Montrasio)

China’s economy was on fire even as the rest of the world melted down into a financial puddle. But growth like that can’t last forever, and economic officials are starting to hose down the beast before it gets out of hand.

  • China’s Premier, Wen Jintao, is about to unveil the nation’s next 5-year economic plan, and it seems like there are some serious changes in store for the people of the People’s Republic.
  • Massive growth in the last 30 years brought heavy pollution, widespread corruption, and greater income inequality than ever before. And most of the growth relied on selling goods overseas, which left the local economy underdeveloped.
  • Premier Wen says that the government’s new economic goals are to avoid inflation and restructure the economy so that it doesn’t rely so much on exports. Policies will also try to address the inequality that resulted from billion-dollar industries springing up overnight.
  • Shifting resources to the local economy may mean slower growth, but it may also result in a lot more jobs, as the new service industry can employ more Chinese than factories can.

Facts & Figures

  • China is changing its annual GDP growth target from 7.5% to 7%
  • Over the past 30 years, the annual GDP growth rate has been around 9%
  • Between 2000 and 2009, employment grew by less than 1%

Best Quote

“We’ll never seek economic growth rate and big size at the price of environment. That would result in unsustainable growth featuring industrial overcapacity and intensive resource consumption.” – Premier Wen

What do you think?

If China devotes less of its economy to manufacturing and exporting cheap goods, do you think prices will rise here in the U.S.?

U.S. Companies Sitting On Piles Of Cash, Not Hiring

Wednesday, October 27th, 2010

Where did all the money go after the recession hit? Well, some of it appears to have gotten stuck at the top of the consumption chain...

  • Moody’s Investor Service reported this week that U.S. companies are “hoarding” almost $1 trillion with no intention of expanding business or hiring new employees.
  • The future of the economy is still unclear, so these companies are likely holding out on growth activities until they can be sure of success.
  • During the economic crisis, many companies cut costs, downsized, and sold corporate bonds to raise the cash.

Facts & Figures

Current cash holdings, by sector:

  • Technology – $207 billion
  • Pharmaceuticals – $124 billion
  • Energy – $105 billion
  • Consumer Products – $101 billion

Best Quote

“We believe companies are looking for greater certainty about the economy and signs of a permanent increase in sales before they let go of their cash hoards, which they suffered so much to build.” – Moody’s Investor Service report

More Concerns About The Economy

Wednesday, August 11th, 2010

The U.S. is still slowly recovering from the worst recession since the 1930s.

  • The economy has now grown (slowly) for four straight quarters.
  • The slow economy growth has made little impact on the unemployment rate.
  • New home construction, imports, and business investments all increased in the second quarter.
  • Consumer spending, which normally accounts for 70% of U.S. economic activity, didn’t rise as much as expected.

Facts and Figures

  • The current unemployment rate is 9.5%.
  • While imports increased by 28.8%, exports increased by 10.3%, creating a trade deficit.
  • Business investment increased by 17%, which was the largest increase since the beginning of 2006.
  • New home construction increased 27.9%.

McDonald’s To Serve Billions More, Faster Than Ever

Tuesday, November 10th, 2009

Could shaving off seconds from a Big Mac order retain some customers for the fast-food giant? What about ordering while waiting in line at the register?

  • Even-though McDonald’s is the world’s largest restaurant chain, it ranks 7th out of the ten top fast-food chains on the American Customer Satisfaction Index.
  • In an effort to get more customers through their “golden arches,” McDonald’s will focus on serving burgers faster, fitting more food on every tray and squeezing more cars into the drive-through line.
  • The company is experimenting with hand-held ordering devices that would allow workers to come from behind the counter to improve efficiency and shorten long lines.

Facts & Figures

  • Sales in the last year at McDonald’s restaurants (open for at least 13 months) climbed 3.8%.
  • McDonald’s aims to serve each customer within 90 seconds of their order.
  • The company has an “innovation center” 20 miles southwest of their headquarters in Illinois, where they practice new serving techniques and other new ideas.

Best Quote

“The moment of truth comes in the transaction. We have to get better at that moment of truth.” – Jeff Stratton, McDonald’s Chief Restaurant Officer

The GDP is…

Friday, July 17th, 2009

The GDP (Gross Domestic Product) is the value of all goods and services (output) produced in a country in a given year. It’s often used as a measurement of that country’s economic activity.