WCA May 2013

Statue of Liberty Image from BigStockPhoto.com Photographer: Marty

cent gain for the MSCI All Country World Index. The US Dollar Index, which tracks the greenback against six of America’s biggest trading partners, reached a five-month high.

Manufacturing Buoyed by increases in new orders, factories in the United States see their best growth since mid-2011 According to the Institute for Supply Management (Tempe, Arizona), a trade group of purchasing managers, economic activity in the US manufacturing sector expanded in February for the third consecutive month. The ISM index of factory activity rose to 54.2 from 53.1 in January. A number above 50 indicates expansion – and February’s factory reading was the highest since June 2011. The group’s measure of production rose to the highest level since April 2012, while its new orders gauge was the strongest since April 2011. The index of export demand improved to a nine-month high. And factories added jobs, ISM said. The Washington-based Business Times pointed out that the pickup in factory activity indicates a strengthening demand for goods even as a higher payroll tax takes effect in the US, reducing the buying power of consumers. At the New Year the tax was allowed to return to its 2010 level of 6.2 per cent from 4.2, which means that an American earning $50,000 is now taking home about $83 less a month. Alex Kowalski of Bloomberg News observed that companies in the US are benefiting from growing demand as businesses boost spending and as economies in emerging markets pick up. Combined with a rebound in housing and sustained gains in household purchases, the jump in orders will likely help propel an economy about to be tested by federal government cutbacks. The data continues to be consistent with a moderate recovery, Dean Maki, chief US economist in New York for Barclays plc, told Mr Kowalski. “Production is picking up and we think growth will be stronger in the first quarter,” Mr Maki said. “Underlying all this is a pretty steady pace of consumer spending. Auto sales and housing are quite solid right now. The economy can withstand some fiscal tightening without going into recession.” Also on 1 st March, Thomson Reuters/University of Michigan said that its index of consumer sentiment – a measure of how consumers feel about the upcoming six months and their plans to make purchases (or not) – climbed in February to a three-month high of 77.6 from 73.8 a month earlier. The gauge is important because consumer spending accounts for roughly two-thirds of the US economy. ❖ Bloomberg noted that investment in new equipment is “at the root of” the pickup in increased activity on factory floors reported in March. According to Commerce Department figures, orders for capital goods, excluding military gear and aircraft, climbed 9.5 per cent since October, the biggest three-month gain since 1993. The brightening outlook was not lost on investors, who pushed the Standard & Poor’s 500 to 6.3 per cent for the year up to March – better than the 4.1 per

The environment

A ‘blistering report’ from NAFTA charges that faulty American battery recycling endangers the health of Mexicans According to an environmental agency created under the North American Free Trade Agreement, cross-border trade in lead acid batteries increased between the United States and Mexico by up to 525 per cent from 2004 to 2011. Now the agency, the Commission for Environmental Cooperation, has charged that US companies are sending spent lead batteries to recycling plants in Mexico that do not meet American environmental standards, putting Mexican communities at risk. In what Elisabeth Rosenthal of the New York Times called a “blistering report,” submitted in early February, the NAFTA agency asserted that the United States does not fully follow procedures common among developed nations that treat international battery shipments as hazardous waste. It blames environmental watchdogs on both sides of the border for lapses in regulation and enforcement. (“Report Faults US Use of Mexican Battery Recyclers,” 8 th February). The Times said that almost all lead acid batteries used in the US – in vehicles, wind turbines, and cellphone towers – are recycled to extract the lead for reuse, both because lead is a dangerous pollutant and because it is a valuable commodity. Trade statistics indicate that an estimated 20 per cent of lead acid batteries from the US now go to Mexico for recycling. Ms Rosenthal pointed out that, since 2008, new US limits on lead pollution have made domestic recycling complicated and costly. That has helped propel the recycling trade to Mexico, both legally and illegally, environmental groups say, because that country has less stringent limits for lead pollution – and much less vigorous enforcement. Among other shortcomings highlighted by the report, customs data on the number of batteries crossing the border did not mesh with counts by the United States Environmental Protection Agency. While the EPA requires notice of batteries leaving the US, there was no effort to verify their arrival at qualified recyclers in Mexico. The data that battery companies sent to the EPA about exports consisted of “piles of paper,” said Evan Lloyd, who was the NAFTA agency’s executive director until late 2012 and oversaw the year-long study; and it was never amassed into an electronic database that would be “useful to regulators.” ❖ Mr Lloyd said that the NAFTA report was initiated in response to a report by the American environmental group Occupational Knowledge International, which has led the campaign against lead poisoning internationally,

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Wire & Cable ASIA – May/June 2013

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