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EuroWire – September 2008
25
to 50.2 for the month after a 49.6 reading in May. A reading over
50 indicates growth. Coming in stronger than expected, the
bellwether manufacturing report published 1
st
July also showed
exports remained strong, helping offset the effect of dwindling
domestic demand. Home-market orders dropped slightly, and an
inflation gauge edged upward. In a separate report on 1
st
July, the
latest figures issued by the government indicated that spending on
construction projects declined for a second month. The US Census
Bureau of the Department of Commerce estimated construction
spending during May at a seasonally adjusted annual rate of
$1,085.2 billion, 0.4% below the revised April estimate of
$1,089.3 billion. The May figure is 6% below the May 2007 estimate of
$1,154.6 billion. During the first five months of this year, construction
spending amounted to $416.6 billion, 5.1% below the $438.7 billion for
the same period in 2007.
Canada, too, is seeing a rebound in the manufacturing sector, which
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helped the national economy grow by a stronger-than-expected
0.4% in April after two months of contraction. A 1
st
July report by
Statistics Canada showed manufacturing expanded 1.9% in the
month, although not enough to recover the 2.4% decline in March.
The strength in manufacturing was widespread, but motor vehicle
production was the big contributor with a 7% rise compared with a
12.8% drop in March. Even so, economists see growth in the sector
remaining weak for the rest of the year. Growth in Canadian gross
domestic product in April beat market expectations of a 0.3% climb
after declines in March and February of 0.2% and 0.3%, respectively.
The economy shrank in the first quarter for the first time since the
second quarter of 2003, by an annualised 0.3%.
Of related interest . . .
The United States has filed a complaint with the World Trade
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Organisation over European tariffs on technology goods of
American manufacture. The duties, which run as high as 14%,
make such goods less competitive in Europe, according to the
Information Technology Industry Council, a US trade association.
The complaint reflects the Bush administration’s view that the
European duties violate a 1996 WTO agreement that eliminated
tariffs on information technology equipment, and that they
effectively tax innovation.
The European Commission said in a statement that it was willing to
renegotiate the 1996 Information Technology Agreement to cover
new products, but that the US had refused to do so. The commission
said, “Both the spirit and explicit provisions in the ITA make it clear that
extension to new products to reflect technological change would not
be automatic, but based on periodic review by signatories.” The WTO
received the complaint 29
th
May, beginning a 60-day consultation
period with the European Union. After that, the United States may ask
a WTO panel to rule on the dispute. Total worldwide exports of the
products included in the complaint totalled $70 billion in 2007.
Steel
Two for Nucor: joint ventures with
Sidenor, of Greece, and Italy’s Duferco
Nucor Corp (Charlotte, North Carolina) announced it has signed a
memorandum of understanding with Sidenor SA to purchase a 34%