If there had been any doubt, the third quarter seems to have proved what many investors have been fearing all year long: the Chinese economy is experiencing a structural slowdown. Data released this week showed year-on-year growth of 7.3 percent in the July-to-September period. On the one hand, it’s quite impressive; few countries boast growth levels anywhere near that. On the other, it’s a reversal; after unexpectedly accelerating in the previous quarter, during which it grew 7.5 percent, and third-quarter growth was the weakest in more than five years, a reflection of a sluggish real estate market and weakening domestic demand. It also increases the likelihood that the world’s second-largest economy will miss its annual growth target—set by the government at 7.5 percent—for the first time since 1998.
Two key parts of the economy—namely, exports and a property market that represents around one quarter of GDP—are simultaneously slowing after a decade of growth. Residential property sales are in complete reversal, and fell 10.8 percent in the first nine months of this year. Worse, there are no new sources of growth in the economy to compensate for the weakness. E-commerce is growing and renewable energy could spark the economy down the road, but neither is sizeable enough at present to act as a counterbalance. As a result, China’s economy will likely keep decelerating—fourth-quarter growth is forecast at 7.2 percent—and will continue on that path next year, according to Credit Suisse analysts Dong Tao and Weishen Deng. “The problems in the economy remain unsolved,” they write in an October 21 report.
The silver lining in it all: the main challenge for Chinese policymakers today is managing the adjustment to a new paradigm of lower growth, rather than preparing for a crisis. Economic growth has slowed gradually, rather than crashing, suggesting that the country might yet avoid a hard landing. Concerns at the start of the year that trusts and wealth management funds could default have fallen away, as there appear to be no looming issues that threaten to destabilize the financial system.
One confidence booster: the government has both the motivation—and the means—to arrest any steeper decline that might materialize with a substantial stimulus package. It has room, for example, to cut either its reserve requirement ratio or real interest rate. The central government could also take on large amounts of debt if necessary, which would make up for the more limited borrowing capability of local governments. Credit Suisse actually expects the central bank to cut the reserve requirement ratio or increase the loan deposit ratio in the fourth quarter, which could help make up for more tepid investment by local governments and bank lending.
A handful of short-term indicators are also blinking positive. Exports rose a better-than-expected 15.3 percent in September from a year earlier, while imports rose 7 percent, suggesting China is both benefitting from a strengthening U.S. economy and experiencing domestic demand that’s not as weak as anticipated. Industrial production rose a better-than-expected 8 percent in September, as auto production and computer manufacturing improved from August. All the while, the government continues to implement economic reform measures aimed at boosting private investment, government revenue and productivity. Credit Suisse expects the government to start more rail and subway projects in the fourth quarter, which would mean increased investment and more jobs.
The bottom line? Chinese equities may not be as unattractive as the bears might think. Indeed, the bulls have been in charge of late, as the Shanghai Composite Index rose 16 percent between July 21 and October 8, and hit an 18-month high earlier this month amid optimism about the government’s reforms. There also remain a few straight-up growth stories in the equity market, including “new economy” stocks in healthcare, Internet and some consumer sectors. Still, it’s important to be realistic. China was never going to be able to maintain the breakneck growth trajectory that had already lasted longer than expected. And the transition is now. “China’s growth,” Tao and Deng point out, “is moving to a new norm.”
Photo of Shanghai skyline courtesy of Songquan Deng / Shutterstock.com
Dear EarthTalk: I recently heard that Sweden is the greenest country in the world. Is this true and, if so, by what standards? And where does the U.S. rank? — Raul Swain, New York, NY
It’s true that Sweden came out on top in the recently released ranking of 60 countries according to sustainability by consulting firm Dual Citizen Inc. in its fourth annual Global Green Economy Index (GGEI). Norway, Costa Rica, Germany and Denmark rounded out the top five. The rankings take into account a wide range of economic indicators and datasets regarding leadership on climate change, encouragement of efficiency sectors, market facilitation and investing in green technology and sustainability, and management of ecosystems and natural capital.
Sweden’s first place finish reflects the Swedes’ ongoing commitment to climate change mitigation and sustainability policies and practices. The country is a leader in organic agriculture and renewable energy as well as per capita investment in green technology and sustainability research. Upwards of 75 percent of Swedes recycle their waste, while only four percent of the country’s garbage goes to landfills. In fact, Sweden imports garbage from other nations to burn as a renewable source of energy.
On the climate front, Sweden was one of the first countries in the world—going back to 1991—to put in place a heavy tax on fossil fuels to encourage the development of greener sources of energy. Indeed, the high price of gas there has notably boosted sales and consumption of homegrown, renewable ethanol. Just a few decades ago Sweden derived 75 percent of its energy from fossil fuels, but is on track to shrink that to 18 percent by 2020, with many Swedes clamoring for the country to abandon fossil fuels entirely at that point. As if that wasn’t enough, Sweden recently announced that it would pay a whopping $500 million over the next four years into the United Nations’ Green Climate Fund, a pool of money sourced from richer countries to help poorer ones transition to a future less dependent on polluting fossil fuels.
The United States didn’t fare so well in the GGEI, ranking just 28th overall, just behind Rwanda and slightly ahead of Canada. Despite leadership in green technology and environmental awareness, Americans’ disproportionately large carbon footprint and resistance to a national policy on climate change mitigation are hurdles to the U.S. achieving a better ranking.
The GGEI isn’t the only sustainability ranking of countries. The Yale Center for Environmental Law & Policy and Columbia University’s Center for International Earth Science Information Network recently released their 2014 Environmental Performance Index (EPI), a similar but more expansive ranking of 178 nations on environmental health and ecosystem vitality. Switzerland topped that list, followed by Luxembourg, Australia, Singapore and the Czech Republic. Sweden ranked 9th and the U.S. 33rd.
The fact that global rankings like the GGEI and EPI exist shows without a doubt that sustainability concerns are a global phenomenon, and that people from Iceland to Australia (two highly ranked countries) realize the importance of taking care of Mother Earth. Despite issuing different rankings, both indices had a lot in common, with five countries (Norway, Germany, Switzerland, Austria and Spain) making the top 10 list of each. Another common conclusion was that the U.S. has much to do if it hopes to be taken seriously among world leaders committed to protecting the planet and our common future.
Lately, black gold looks more like black pyrite. The price of Brent crude began falling in late June, and dropped below $100 a barrel in September – and it’s on track for a double digit quarter average for the first time since January 2011. All-in, the price of oil has declined 25 percent from a June 19 peak of $115.19 to $86.36 in mid-October. What’s behind the plunge? The price of a commodity can fall for two reasons—too little demand or too much supply. Or both. While demand from Europe and Japan has been sluggish of late, oversupply is what’s really driving prices lower. A remarkably successful effort over the last five years to extract oil from previously untappable shale beds in North Dakota and Texas has flooded the U.S. market with oil. The U.S. shale revolution, no longer just a local phenomenon, is putting downward pressure on global oil markets, and Credit Suisse believes it will continue to do so for at least the next three years.
Oil production outside the Organization of the Petroleum Exporting Countries (OPEC) has grown an average of 800,000 barrels per day each year since 2009. The United States, where oil production rose from 5.3 million barrels per day in 2009 to 7.4 million in 2013, is the single biggest driver of that growth. The Obama Administration is considering lifting a ban on crude oil exports, but for now, American crude stays at home. As a result, the U.S. needs less foreign oil. Imports fell from 12.9 million barrels per day in 2009 to 9.9 million in 2013, even as the economy improved dramatically. (They may not be exporting crude, but American refineries have built a booming business shipping out diesel fuel and other refined products.)
All that said, all signs pointed to a global supply crunch as recently as June, when the militant group ISIL launched a devastating offensive in the key oil-producing region of northern Iraq. As a result, says Credit Suisse Global Energy Economist Jan Stuart, speculators bid up prices. But oil production in southern Iraq was never affected, and the Iraqi Army (with foreign assistance) began to make headway against ISIL. Meanwhile, Libyan oil exports, which had stopped entirely since the summer of 2013 as the post-Gadhafi civil war intensified, began to re-enter markets in July. By August with the country’s largest export terminal re-opened for business after a year offline, flows averaged more than 500,000 barrels per day.
Through it all, global crude oil inventories actually rose rather than fell, as they usually do in summer, partly due to increasingly efficient refineries. In August, as it became clear that markets were actually oversupplied, oil prices that had been slowly weakening since late June suddenly began to sell off dramatically. Markets remain bearish. Oil prices for future delivery remain higher than spot prices, a so-called contango situation that reflects a supply surplus and the ongoing incentive to build inventory.
Credit Suisse energy analysts expect average Brent crude prices of $92 in the fourth quarter. Weak economic data out of Europe and China augurs softer demand, while both Libya and Iraq delivered higher oil production than previously estimated in August and September. Further out, Stuart expects the growth pace of the U.S. oil boom to level off in 2015 and 2016, but says crude oil production alone should still grow by more than 1 million barrels per day each year. Energy analysts have lowered their forecasts for Brent crude to an average of $91.50 in 2015, $90 in 2016, and $88 in 2017. Meanwhile, the price of West Texas Intermediate (WTI) oil produced in the U.S. is expected to average $86 in the fourth quarter of 2014, $84.50 in 2015, $82 in 2016, and $81 in 2017.
Those forecasts are a radical departure from the triple-digit prices of the last four years, but prices could slide even further if Saudi Arabia maintains current production levels. If Saudi Arabia doesn’t cut production, WTI prices could fall to $70 a barrel. At that level, Stuart says, U.S. exploration and production activity would decline quickly, with the number of completed wells falling by at least 11 percent and production growth falling by a third to 740,000 barrels per day. Crucially, however, growth wouldn’t deflate entirely, and would re-accelerate quickly once prices rise again. In the end, Stuart believes the kingdom will cut oil production as soon as next month, and will keep production toward the bottom end of its comfort range in 2015. . Saudi officials have repeatedly said that they prefer stability above all else, and that oil prices close to $100 per barrel makes everyone “happy.”
LED lights are used in industry, home, outdoor and other applications for efficient and energy saving lighting. When compared to the luminaries that are traditionally used, such as incandescent and fluorescent lighting, LED lights have significantly higher efficiency and energy saving properties. They can save more than eighty percent of electricity costs. They also have long life and heavy duty performance.
Why are LED luminaries energy efficient and reliable?
LEDs are energy efficient and power saving because of their construction and operating system. Incandescent lights are highly inefficient and they convert electricity to heat. This causes high electricity bills and the costs are increased. Energy saving is important for homes, businesses, industry and other institution. Therefore, the replacement of traditional incandescent lighting with LED lighting will lead to up to eighty percent of energy saving. The reliability of LEDs is remarkable because they can operate without failure for more than three years. During their operating time, they are no requirements for maintenance and replacement. You can imagine the lights that are working for almost one hundred thousand hours without replacing. This is called the high reliability and heavy duty performance.
Where can LED luminaries be used?
They can be used anywhere and any place. They can even be used in hazardous environment and in the areas where there is influence of corrosion and toxic substances. The durability of LEDs is remarkable, and they can withstand temperature fluctuations and other environmental effects. When these lights are used at home, they are very easy to install. They are also cheap, when you have in mind the long operational time and the fact that they do not need to be replaced for a long time. They are organized in cluster of small LEDs that are preventing the malfunctions and failures during performance.
by Sasa Sijak
Infinis is the UK’s 6th largest producer of Renewable Energy operating a growing portfolio of landfill gas, onshore wind and hydro plants across the country. They currently operate 121 landfill gas extraction plants.
Allen & York have partnered with Infinis for 8 years, providing specialist technical recruitment solutions to support their growing renewable energy capabilities.
At Allen & York we like to take the time to thoroughly get to know our clients and understand their business inside out, as such we were delighted when two of our senior team were invited to take an onsite tour of the Infinis Landfill Gas Plant in Northamptonshire, yesterday.
Sally Woods, Principal Consultant – Energy Generation; “We want to say a big thank-you to Will, the Chief Engineer at Infinis for a really interesting and informative tour of their Landfill Gas site yesterday. We donned our wellies and hard hats and learnt all about the gas production process, including methane extraction and hot spots!”
At just under a mile across the landfill is covered with clay to seal in the decomposing waste and gas. 500 wells are then sunk into the waste, which enables the methane to gather in the well head and flow into the network of gas collection pipes. These pipes then pump the gas into large engines which produce energy which is fed into the National Grid.
Landfill gas is a reliable and constant source of renewable energy, which doesn’t fluctuate due to atmospheric conditions (like wind or solar, for example) it is therefore a very valuable part of the renewable energy mix.
“Careers across Waste & Renewables are constantly developing and to date we have worked with Infinis to recruit; Estates Managers, Landfill Supervisors/Managers, HSE Managers and Operations Managers.
We also work with them to source Onshore Wind technicians for other parts of the business. We’re seeing an increased demand for talent within Waste & Recycling and the EfW (Energy from Waste), AD and Biogas industries are amongst the most interesting and innovative in the renewables portfolio.”
Stuart Vivian, Team Leader – Waste & Recycling at Allen & York.
To learn more about the Landfill Gas process and How it works
Re-posted from Brechin Advertiser – 16 October
News that the Scottish Government has given development consent for three windfarms off the coast of Angus, has been welcomed by the county’s MP.
Mike Weir believes that the windfarms could provide a boost to the local economy.
The three windfarms, Inch Cape, Seagreen Alpha and Bravo, together with one off the Fife coast will together generate up to 2.284GW of renewable energy and will be a very significant boost to Scotland’s renewable energy industry.
Mr Weir said: “Between them the windfarms could generate up to £1.2 billion to the Scottish economy together with more than 13,500 jobs.
“There is a huge opportunity for our local economy to receive a substantial boost both in the construction phases of these windfarms and in the long term maintenance and operation of them.”
He continued: “This is a major opportunity that could provide long term sustainable good employment prospects throughout Angus and should be warmly welcomed by everyone.”
Mr Weir added that the windfarms would also add to the ability of Scotland and Angus to contribute to producing all our energy from renewables.
He said: “As the issue of climate change becomes ever more urgent it is clear that we must move to more clean, green renewable energy. Scotland is well placed to be the renewable powerhouse of Europe and this consent is another step along the way to ensuring that all our electricity comes from renewable sources.”
Allen & York are leading Renewable Energy recruitment consultants. Current opportunities include;
According to Karen Wordsworth, director, climate change and sustainability at KPMG “commodity prices, energy usage and logistics management are already important for manufacturers to maintain their competitiveness today”.
Results from September’s report The Future of Energy: The UK Manufacturing Opportunity, which collated the opinions of individuals form 600 UK manufacturers, revealed 79% of firms regarded energy as a critical issue for 2015.
More than two thirds plan to increase investment in energy management during the next 12 months, which can only be good news for the Energy Jobs market.
KPMG’s Top Ten Manufacturing Megatrends;
- Automation and factories of the future
- Demand to shift to the East – declining
- Cluster manufacturing
- Energy/resource efficiency
- Talent challenge
- Service driven business models
- Sourcing governance
- Additive manufacturing/3D printing
See The Manufacturer to read more.
Allen & York are a leading specialist Building & Energy Services recruitment consultancy. Current job opportunities include:
Shoes that tell runners which way to turn. Bracelets that tell beachgoers which sunscreen to use. All around us, formerly inert objects are being refashioned with the capacity to connect to cyberspace. But while wearable technology for consumers might be most visible manifestation of the phenomenon known as the Internet of Things, it isn’t going to have the greatest impact on the corporate bottom line. That distinction belongs to industrial smart machines.
Companies across the corporate spectrum are increasingly using equipment outfitted with sensors that connect to the Internet . The consumer and industrial goods, energy, and transportation industries, in particular, are making increasing use of sensors that transmit usage patterns, productivity levels, location, and even weather conditions. The much more complete view of operations that results allows companies to better monitor equipment use, report unusual problems, and track output, with the ultimate aim of cutting costs and improving productivity.
Consider a Siemens’ plant in Amberg, Germany, that produces so-called programmable logic controllers. Smart machines connected to the Internet autonomously control 75 percent of the facility’s production, enhancing efficiency so much that there are only 12 defects per million units produced.
In commercial aviation, a GE-Accenture joint venture named Taleris outfits aircraft with sensors that provide real-time information about the condition of parts. That allows the scheduling of maintenance based on actual need rather than the number of trips an aircraft has flown, thereby reducing costs and better ensuring safety.
In transportation, there’s the case of NYK Logistics, which handles freight for the retailer Target at an enormous 70-acre yard in Long Beach, California. Historically, NYK used manual labor to track incoming and outgoing shipping containers, with personnel roaming the hub with clipboards and walkie-talkies, tracking inventory by scanning bar codes. When increased volumes rendered such a system untenable, NYK tapped Zebra Technologies to install a wireless tracking system known as WhereNet on the yard’s containers, trailers, dock doors and parking slots. Today, 90 percent of the yard’s equipment is automated and connected to a central database, and the company pretty much knows exactly where everything is at all times.
So those are the opportunities. The challenge? Unlike the above examples, most companies haven’t figured out how to cultivate and benefit from machine-generated data. Some 95 percent of the information generated by industrial machines is “unstructured,” meaning that it isn’t organized into traditional data formats and cannot be easily crunched by the relational database software sold by the likes of Oracle, Microsoft, and IBM. And the problem is only getting worse: according to market research firm IDC, the amount of data managed by corporations will increase by a factor of 50 over the next decade.
In the meantime, the machines will get smarter. Interested investors can come at the trend from several directions. Demand is fast increasing for the sensors used in smart machines, which are produced by companies such as SAP and Splunk. Industrial companies are also facing an enormous need for software that gives them the capacity to analyze and understand machine data, made by the likes of ZL Technologies, SAS and Inxight. But it’s not just those selling the sensors and the software. Indeed, the companies that are intelligently investing in their own intelligent machines are also worth a look. “You want to consider both sides,” says Michael O’Sullivan, Chief Investment Officer in Credit Suisse’s Private Banking and Wealth Management Division “Focus on the IT companies making the software as well as in the companies who use these technologies well.”
Photo of Siemens’ Amberg Electronics Plant courtesy of Siemens.
Several IT brands have begun showing an increased commitment to social and environmental responsibility. A new report from TCO Development shows that 17 brands have increased their efforts in implementing codes of conduct and corrective actions by working with the structured platform of TCO Certified, directed by sustainability organization TCO Development.
Niclas Rydell of TCO Development comments: “Since introducing social responsibility criteria in the TCO Certified program, we’re seeing evidence of a more open dialog between brands and suppliers as well as more brand awareness of what’s happening in the supply chain.”
By prioritizing socially responsible manufacturing when selecting IT products, buyers can directly influence brands toward continued improvements. The new EU Public Purchasing Directive pushes buyers to include social and environmental factors when buying IT equipment, and to make use of certifications to verify product compliance with those demands. “The challenge for buyers is how to know whether the products you buy actually meet the sustainability criteria you set. TCO Certified offers this verification, providing both manufacturers and buyers with the confidence of third party verification,” concludes Niclas Rydell.
TCO Certified is an international third party sustainability certification for IT products. Criteria in TCO Certified address environmental and social risks throughout the IT product life cycle. This unique mix of criteria makes TCO Certified the world’s most comprehensive third party certification of IT products.
About TCO Development
TCO Development promotes sustainable development in IT. Through the TCO Certified sustainability certification we make it possible to select products that meet criteria for environmental and social responsibility throughout the life cycle; manufacturing, use and end of life phases. TCO Development is owned by TCO, a non-profit organization based in Stockholm, Sweden.