The Great Deceleration: The most dramatic, and disruptive, period of emerging-market growth the world has ever seen is coming to its close

The Great Deceleration

The emerging-market slowdown is not the beginning of a bust. But it is a turning-point for the world economy

Jul 27th 2013 |From the print edition

WHEN a champion sprinter falls short of his best speeds, it takes a while to determine whether he is temporarily on poor form or has permanently lost his edge. The same is true with emerging markets, the world economy’s 21st-century sprinters. After a decade of surging growth, in which they led a global boom and then helped pull the world economy forwards in the face of the financial crisis, the emerging giants have slowed sharply. Read more of this post

Tower Crane Industry Awaits a Big Lift; Five Years After Commercial Construction Market’s Collapse, Utilization Rates and Sales Remain Soft

Updated July 25, 2013, 8:13 p.m. ET

Crane Industry Awaits a Big Lift

Five Years After Commercial Construction Market’s Collapse, Utilization Rates and Sales Remain Soft

BOB TITA

For a glimpse of how the U.S. commercial construction market is faring, Morrow Equipment Co. is worth a good look. Five years after the construction market collapsed, about 250 cranes—or half of Morrow’s fleet—remain idle. The market “is improving this year, but is still at a very low rate compared with where it used to be in the boom time,” said Christian Chalupny, president of Morrow, which is the nation’s largest supplier of rented tower cranes based on fleet size. Read more of this post

Retirement benefits: Who pays the bill? Pensioners are pushing many cities and states towards financial crisis

Retirement benefits: Who pays the bill? Pensioners are pushing many cities and states towards financial crisis

Jul 27th 2013 | CHICAGO AND LOS ANGELES |From the print edition

DETROIT may be an extreme case of fiscal incontinence. But its bankruptcy highlights a long-term problem faced by many American cities and states; how to fund generous pension and health-care promises that are no longer affordable. The problem has been decades in the making. It has always been easier for politicians to promise generous retirement benefits to public servants than to raise their wages. The bill for jam today falls due immediately; the bill for jam tomorrow can be delayed for decades. Read more of this post

Chemical Companies Rush to the U.S. Thanks to Cheap Natural Gas, powering a $100 billion investment boom in the U.S. chemical industry

Chemical Companies Rush to the U.S. Thanks to Cheap Natural Gas

By Jack Kaskey on July 25, 2013

Ships sailing north from Chile are bringing an unusual cargo to the U.S.: chemical factories. Methanex (MEOH), the Canadian company that’s the world’s largest producer of methanol, is spending $1.1 billion to disassemble two of its Chilean factories and rebuild them in Geismar, La. The first plant is scheduled to open next year. A second will be relocated by early 2016.

Scores of other companies including ExxonMobil (XOM), Chevron (CVX), and Sasol (SSL) plan to spend about $100 billion to build or expand chemical plants in the U.S., according to a tally kept by Dow Chemical (DOW), the biggest U.S. chemical maker by sales. Dow is spending $4 billion to build factories in Freeport, Tex., and reopen a plant in Hahnville, La., creating 500 manufacturing and 5,000 construction jobs. Five years ago the company was closing U.S. plants and moving production to the Middle East to gain access to cheaper raw materials and be closer to Asian markets. Read more of this post

For India’s Inflation Crisis, See Onion Prices; The onion is the preferred gauge by which many Indians measure inflation and the competence of their politicians

For India’s Inflation Crisis, See Onion Prices

By Brendan Greeley and Kartik Goyal on July 25, 2013

Apples are too expensive now, so Shilpa Gethe settles for bananas. She doesn’t have an easy substitute for onions. Gethe, 32, a housewife in the Mumbai suburb of Vashi, buys more than four pounds of onions a week. About two months ago a pound cost 10 rupees (17¢). Since then the price has doubled, she says. A 500-rupee note used to get her through a week of vegetables. Now it’s two days, sometimes less. To stick to her monthly budget, Gethe sends her husband to work with a packed lunch. “I have to put in more work,” she says. Read more of this post

Beijing takes on big beasts of global drugs industry

July 24, 2013 6:04 pm

Beijing takes on big beasts of global drugs industry

By David Pilling

Regulators are flexing their muscles with greater powers and long-dormant laws

Kill the chicken to scare the monkey is a well-known Chinese expression to describe the tactic of cracking down on the little guy in order to frighten the big beasts into stepping into line. In taking onGlaxoSmithKline, a gorilla of the global pharmaceuticals industry, Chinese authorities have gone straight for the monkey. The Anglo-American drugs company, which employs about 5,000 people in China, has become embroiled in a scandal over alleged payment of bribes to doctors in return for prescribing GSK medicines. According to the allegations, inducements to often lowly paid doctors, hospitals and government officials were funnelled through travel agencies for fictitious or overbilled travel and conference services. Read more of this post

Politics Is a Bitter Pill for Glaxo: How the Glaxo bribery scandal fits into China’s new narrative of re-crafting China’s economy as consumer driven

July 25, 2013, 8:20 p.m. ET

Politics Is a Bitter Pill for Glaxo

How the Glaxo Bribery Scandal Fits Into China’s New Economic Narrative

JOHN BUSSEY

Here’s one takeaway from the bribery scandal GlaxoSmithKline GSK.LN +0.24% is weathering in China: In Glaxo’s anguish, there’s solace for the Chinese consumer, and Beijing is glad about that. China this month accused Glaxo of bribing doctors and officials to sell the company’s drugs at higher prices. Glaxo apologized, saying it appears a small group of wayward managers was at fault, not company policy. It also said it will drop prices in China. Read more of this post

Indonesia’s Working Women Struggle to Succeed; “You have to manage everything well. But that’s why God created women — we can handle it.”

Indonesia’s Working Women Struggle to Succeed

Growing equality means a better economy for Indonesia: World Bank

By Angela Buensuceso on 12:23 pm July 25, 2013.
Ask the chief executive of one of the country’s largest banks what it takes for a woman to excel in the workplace and the answer is clear. “You have to manage everything well,” says Parwati Surjaudaja, the president director of Bank OCBC NISP. While countries in the West continue to aim for reductions in yawning pay gaps and a gradual dismantling of the glass ceiling, the developing world is, for the most part, a long way behind in building the foundations for greater female participation in the workforce. Not so in Indonesia. Read more of this post

Chinese maritime freight companies on brink of bankruptcy

Chinese maritime freight companies on brink of bankruptcy

Staff Reporter

2013-07-26

China’s Ministry of Transport is expected to introduce temporary measures to help container ship operators tide over a possible bankruptcy. The move was made public after a planned national stimulus program announced for the shipping industry last year was aborted and the National Development and Reform Commission reneged on its stance to help the industry, according to the Economic Information Daily, a newspaper published by the state-run Xinhua news agency. Read more of this post

The move out of bonds, a trickle so far, could intensify as investors hit the reset button on their portfolios.

July 25, 2013, 3:22 p.m. ET

Bonds Could Get Swept Away by the Flow

Move Out of Bonds Could Intensify as Investors Hit Reset Button on Their Portfolios

JUSTIN LAHART

Investors’ love affair with bonds is going through a rough patch. If they don’t make up soon, things could get really rocky. With the Federal Reserve signaling that it will begin reining in its Treasury and mortgage-bond purchases later this year, the fixed-income arena has become a less-than-happy place. Bank of America Merrill Lynch’s index of U.S. corporate and government bonds fallen 3.8% since the start of May. Investors have noticed, pulling a net $78 billion from bond mutual funds in the seven weeks ended July 17, according to Investment Company Institute estimates. Read more of this post

Reality Bites for Siemens and ABB: Two of Europe’s Largest Industrial Companies Are Signaling All’s Not Well With the Global Economy

July 25, 2013, 12:09 p.m. ET

Reality Bites for Siemens and ABB

Two of Europe’s Largest Industrial Companies Are Signaling All’s Not Well With the Global Economy

ANDREW PEAPLE

If optimism about the global economy is steadily building, some of Europe’s largest industrial companies didn’t get the memo.

Siemens SIE.XE -5.98% shocked investors Thursday afternoon by revealing it won’t meet its target of a 12% margin on earnings before interest, taxes, depreciation and amortization by the end of its fiscal-year 2014, a key management aim. The German engineer’s shares slumped 6%. Swiss peer ABB‘s ABBN.VX -3.08% shares dropped 3.1% after a downbeat first-half earnings statement showed its order book declining across the globe. The message is clear: The economic climate for such companies is still very challenging. The question is which one is better placed to cope. Read more of this post