Competitive horizon

Citation

(2011), "Competitive horizon", Strategic Direction, Vol. 27 No. 4. https://doi.org/10.1108/sd.2011.05627dab.002

Competitive horizon

Article Type: Competitive horizon From: Strategic Direction, Volume 27, Issue 4

Economy in Switzerland set for 2011 growth

Economiesuisse predicts that Switzerland’s gross domestic product (GDP) is likely to grow by 2.0 percent in 2011. Rising wages that have helped increase activity in construction and consumer spending are regarded as one key contributor to growth. The Swiss business federation also cites falls in unemployment, interest rates and immigration as other important factors. A prediction that inflation will remain low in 2011 provides another reason for optimism. Expansion is forecast in both domestic and export markets, with Germany and emerging nations important drivers in respect of the latter. According to a report published by www.swissinfo.ch, the organization is concerned about the impact on exports should the franc remain strong. Tourism, machinery and textiles are sectors considered most at risk if that situation prevails. Apprehension that the value of Switzerland’s currency could increase significantly in the event of a euro zone collapse adds to the uncertainty. The report likewise notes the still fragile nature of economic recovery in the United States and a possibility of bubbles arising within emerging economies like China and Brazil. It is pointed out that the impact of any corrective action needed in these economies would reverberate around the world.

EU pulls plug on coal mine subsidies

Industry ministers in the European Union (EU) have decided to end state support for the region’s coal industry by 2018. This decision extends the deadline by four years from that originally proposed by the European Commission. The aim is to gradually phase out state subsidies until 2018 and uneconomical mines will be forced to close when support ends. Germany and Spain have expressed the need to address the social impact of pit closures and some state aid until 2027 may be possible. However, this would apply only to excessive costs associated with closing down mines, site redevelopment and social welfare benefits. A report published by www.EUbusiness.com points out that funds saved through ending support for loss-making mines can be invested in cleaner energies instead.

Rubber production subject to global warming effect

A report published by the Hindu (www.thehindu.com) points out scientific claims that climate change could see traditional rubber growing areas in India producing up to 6 percent lower volumes of natural rubber (NR) over the next decade. However, the Rubber Research Institute of India predicts a contrary effect on NR production in the North-Eastern States. Low temperatures currently limit cultivation in this area of the country. Global warming has produced increases in both maximum and minimum temperatures together with changes in both the amount and distribution patterns of rainfall. These developments have inspired the institute to examine genetically-modified (GM) rubber plants as a possible alternative. Results of laboratory studies have shown that drought might have a lesser impact on such plants. Developing clones able to withstand certain effects of climate change therefore becomes possible, although scientists believe a clear policy on the use of GM technology is needed first.

New Zealand companies upbeat about exports in 2011

A survey conducted by Export New Zealand discovered high levels of optimism among exporters in the country. The survey mainly addressed manufacturers and 80 percent of the 251 respondents expected to increase their activity within all markets. In addition, 44 percent hoped to enter new markets within the next 12 months, according to a report published by the New Zealand Herald (www.nzherald.co.nz). Around half of the exporters surveyed expected a rise in profits and another 32 percent felt they would remain near to current levels. While staff cuts were likely in only 13 percent of firms, around 38 percent stated their intention to take on additional workers. Export New Zealand believes exports are crucial to financial health and living standards within the nation and is encouraged by the findings of its survey.