Connect with us

Business

Middle East records highest jump in confidence, orders as per global economic survey

The Middle East is the highest scoring region in terms of confidence and orders, in spite of worries about escalating operating costs, according to the Global Economic Conditions Survey (GECS) for the first quarter of 2022.

The survey was conducted by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA).
For the latest headlines, follow our Google News channel online or via the app.
GECS’s index of concern around operating costs jumped once again in the first quarter of this year by nine percentage points. It is now at its highest recorded level at 62 percent. The dramatic rise over the past 12 months highlights the impact of rising energy and transport costs caused by supply chain shortages and disruption.
Despite these concerns around operating costs, the Middle East survey for the first quarter recorded the biggest rise of all major regions in both confidence and orders, with its GECS confidence index score increasing by 25 points between Q4 2021 and Q1 2022. Much of this can be attributed to oil price movements which increased dramatically since the start of 2022. This jump in confidence in Q1 also reflects the waning of the ‘omicron effect.’
The Q1 survey however highlighted that global confidence and orders were little changed, up by four points to +9 for confidence and by two points to -3 for orders. Other economic activity indicators, such as employment and capital spending improved. Overall, the Q1 survey maintains the trend of modest overall growth through to the middle of the year, well down from the strong post-pandemic recovery of 2021. The level of orders in advanced regions remains above that of emerging regions, as it has throughout the post-pandemic recovery.
GECS’s two ‘fear’ indices – measured by concern that customers and suppliers may go out of business – were little changed in the Q1 survey, down by two points and one point respectively. Both indices have seen a step-down from the extreme levels seen in 2020 however they are still above pre-pandemic levels.
ACCA’s Chief Economist Michael Taylor commented: “The start of the year has seen a steep increase in the price of oil, gas, wheat, and other commodities, propelling inflation to even greater heights, squeezing real incomes and slowing economic growth. Compared with previous forecasts, global growth may be reduced by as much as one percentage point this year, to around 3.25 percent.”
Loreal Jiles, Vice President of Research and Thought Leadership at IMA, added: “We asked respondents to name their two biggest economic risks: 51 percent highlighted supply chain disruption and 50 percent underlined the risk of renewed COVID restrictions, 40 percent of respondents also highlighted rising interest rates as a risk, compared to 26 percent with the Q4 survey. The Middle East’s exemplary rise in confidence attributed to movements in the oil price is a welcome trend yet concerns about operating costs remain significant.”
Both ACCA and IMA warn of the risk of policy mistakes. Jiles explained: “Removing the exceptional policy ease introduced to mitigate the effects of the pandemic was always going to be tricky. Over the last year, supply shortages and geopolitical turmoil have resulted in a stagflation scenario reminiscent of the 1970s which was a time of weak economic growth combined with high rates of inflation.”
“Central banks in advanced economies face a difficult judgment call that could result either in overly-tight policies that may lead to recession or excessively lenient policies embedding inflation and inflation expectations. Policies need to be thought through and stress tested very carefully in the days, weeks, and months ahead,” concluded Taylor.

Read more: OPEC+ supply gap widens in March as sanctions hit Russian output

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Business

Ryanair cabin crew in Spain announce 12 new days of strikes in July

Spain-based cabin crew at Ryanair plan to strike for 12 days this month to demand better working conditions, the USO and SICTPLA unions said on Saturday, raising the prospect of travel chaos as the summer tourist season gets under way.

The announcement came on the final day of the crews’ current strike, which began on Thursday and forced Ryanair to cancel 10 flights in Spain on Saturday.

For the latest headlines, follow our Google News channel online or via the app.

Cabin crew will strike on July 12-15, July 18-21 and July 25-28 across the 10 Spanish airports where Ryanair operates, the unions said in a statement.

“The unions and crew of Ryanair … demand a change of attitude from the airline,” they said in a statement, calling for Ryanair to resume negotiations on working conditions.

The unions also urged the government “not to allow Ryanair to violate labor legislation and constitutional rights such as the right to strike.”

Airline workers across Europe have been staging walkouts as the sector adapts to a resumption of travel after pandemic lockdowns.

Spain-based cabin crew at easyJet are striking for nine days this month for higher pay. The airline cancelled five flights from Spain on Saturday.

Workers at Paris’ Charles de Gaulle airport went on strike on Friday and into Saturday, forcing the cancellation of about 10 percent of flights.

Read more:

Summer air fares will be up 7-9 pct on 2019 levels: Ryanair CEO

UK travel-chaos row escalates as IATA chief slams minister Shapps

Ryanair boss predicts tough months ahead due to rising oil prices

Continue Reading

Business

Tesla braces for delayed delivery due to China plant shutdown

Tesla Inc. is expected to announce quarterly production and delivery figures this weekend that will likely be among the worst of the year – and break its multi-quarter streak of record-setting results – due largely to an extended shutdown of its factory in Shanghai.

The electric vehicle maker may have delivered more than 261,000 vehicles globally during the three months ended in June, according to nine analysts surveyed by Bloomberg, ending a two-year stretch of consecutive quarterly gains.

For all the latest headlines follow our Google News channel online or via the app.

Tesla handed over more than 310,000 vehicles in the first three months of the year, more than any previous quarter.

“We cut our second-quarter deliveries estimate by 65,000 to 245,000 units, reflecting a prolonged Covid 19-related shutdown and logistical challenges in the Shanghai factory,” wrote Emmanuel Rosner of Deutsche Bank in a research note to clients. “Recall that during the first-quarter call, CEO Elon Musk had provided directional guidance of sequentially flat deliveries for the quarter but the situation in China worsened subsequently,” only improving in early June.

Shares of Tesla rose 1.2 percent to close trading Friday at $681.79, but the stock is down about 35 percent so far this year.

Deliveries are one of the most closely watched metrics at Tesla. They underpin the Austin, Texas-based company’s financial results and are widely seen as a broad barometer of consumer demand for EVs amid a wider shift away from the internal combustion engine.

Many large automakers will announce US sales results Friday but Tesla, which reports global totals, hasn’t specified a release date.

Dan Levy, an analyst with Credit Suisse, reduced his delivery estimate for the period to 242,000 units. “In aggregate, we believe the Shanghai shutdown accounted for about 90,000 units of lost production in the second quarter,” Levy wrote in a note to clients.

Tesla makes the Model S, X, 3 and Y vehicles at its plant in Fremont, California. It also produces Models 3 and Y at a factory near Shanghai. The company has begun delivering the first Model Ys from its new plant near Berlin and held a “Cyber Rodeo” event for 15,000 people in April to celebrate a new factory in Austin.

‘Money Furnaces’

However, both Berlin and Austin have been slow to ramp up production, with Musk warning in a late May interview that both plants are “gigantic money furnaces.”

Analysts and investors are also worried that the price hikes automakers are imposing to combat soaring raw material costs will weigh on demand. Tesla had boosted its sticker prices by as much as $6,000 a car earlier this month, according to Electrek.

A stronger-than-expected delivery number could provide a boost to Tesla’s stock, which is down more than 35 percent this year amid wider market concerns about rising energy costs, inflation and a potential recession.

Musk shares many of those concerns and is in the process of laying off 10 percent of Tesla’s salaried work force while pushing others to return to the office.

Earlier this week, Tesla laid off roughly 200 people on its Autopilot team, mostly hourly employees who worked as data annotation specialists.

Read more:

Tesla cuts 200 staff from Autopilot team as it closes California site

Watch: Electric vehicle bursts into flames, India orders investigation

Several matters in Twitter deal still unresolved, Musk says in Qatar

Continue Reading

Business

Regulator urges Germans to prepare for possible gas shortage

Fearing Russia might cut off natural gas supplies, the head of Germany’s regulatory agency for energy called on residents Saturday to save energy and to prepare for winter, when use increases.
Federal Network Agency President Klaus Mueller urged house and apartment owners to have their gas boilers and radiators checked and adjusted to maximize their efficiency.
“Maintenance can reduce gas consumption by 10 percent to 15 percent,” he told Funke Mediengruppe, a German newspaper and magazine publisher.
Mueller said residents and property owners need to use the 12 weeks before cold weather sets in to get ready. He said families should start talking now about “whether every room needs to be set at its usual temperature in the winter – or whether some rooms can be a little colder.”
For the latest headlines, follow our Google News channel online or via the app.
The appeal came after Russia reduced gas flows to Germany, Italy, Austria, the Czech Republic and Slovakia earlier this month, as European Union countries scramble to refill storage facilities with the fuel used to generate electricity, power industry and heat homes in the winter.
Russian state-owned energy company Gazprom blamed a technical problem for the reduction in natural gas flowing through Nord Stream 1, a pipeline which runs under the Baltic Sea from Russia to Germany.
The company said equipment getting refurbished in Canada was stuck there because of Western sanctions over Russia’s invasion of Ukraine.
German leaders have rejected that explanation and called the reductions a political move in reaction to the European Union’s sanctions against Russia after it invaded Ukraine.
Vice Chancellor Robert Habeck, who is also Germany’s economy and climate minister and responsible for energy, has warned a “blockade” of the pipeline is possible starting July 11, when regular maintenance work is due to start. In previous summers, the work has entailed shutting Nord Stream 1 for about 10 days, he said.
The question is whether the upcoming regular maintenance of the Nord Stream 1 gas pipeline will turn into “a longer-lasting political maintenance,” the energy regulator’s Mueller said.
If the gas flow from Russia is “to be lowered for a longer period of time, we will have to talk more seriously about savings,” he said.
According to Mueller, in the event of a gas supply stoppage, private households would be specially protected, as would hospitals or nursing homes.
“I can promise that we will do everything we can to avoid private households being without gas,” he said, adding: “We learned from the coronavirus crisis that we shouldn’t make promises if we’re not entirely sure we can keep them.”
He said his agency “does not see a scenario in which there is no more gas coming to Germany at all.”
Also on Saturday, German chemical and consumer goods company Henkel said it was considering encouraging its employees to work from home in the winter as a response to a possible supply shortage.
“We could then greatly reduce the temperature in the offices, while our employees could heat their homes to the normal extent,” Henkel CEO Carsten Knobel told daily newspaper Rheinische Post.
Earlier this month, Habeck activated the second phase of Germany’s three-stage emergency plan for natural gas supplies, warning that Europe’s biggest economy faced a “crisis” and storage targets for the winter were at risk.
Read more:

Germany risks recession as Russian gas supply crisis deepens

Europe ready for Baltics emergency switch-off from Russian grid

Oil prices fall on recession fears, on track for third weekly loss

Continue Reading

Trending