In the QAD Precision News Round-Up: 20 August 2021, inflation
slows in the UK; WTO reports trade levels are up; Japan’s economy
rebounds more than expected; Target reports high earnings; FedEx
announces peak surcharges; FTZ Q&A with expert Greg Jones and more.
According to Irish government officials, exports from Ireland to
Great Britain increased in the first six months post-Brexit. Imports
from Great Britain to Ireland declined during the same period. The
Irish Central Statistics Office said exports to Great Britain,
excluding Northern Ireland, rose by 20 percent in the first half of
2021. This totaled €6.7 billion, an increase of €1.1 billion compared
Conversely, imports from Great Britain decreased by 32 percent, a
fall of €2.5 billion, to €5.3 billion. Furthermore, exports from
Great Britain also decreased by 16 percent in June compared to June
2020. The goods most impacted include food, live animals and
manufactured goods. British exporters face additional border checks on
goods going to the EU, while Irish and EU exporters opted for a phased
approach to Brexit restrictions. For more details on this news
article, please see The Guardian.
In July, UK inflation declined to the Bank of England’s target of two
percent following a slowdown in the economy. Economists polled by
Reuters had predicted a 2.3 percent increase in consumer prices last
month after a 2.5 percent rise in June. The UK’s Office for National
Statistics said the prices of clothing, footwear, computers, games and
toys slumped on the rate of price growth in July.
Furthermore, the data showed that second-hand cars were a big driver
of inflation last month. A shortage of semiconductors and other goods
such as motor vehicles as well as global shipping problems have
contributed to rising inflation in many countries. In August, the Bank
of England said it expected inflation to reach 4 percent around the
end of the year. For more information, please see Reuters.
The World Trade Organization (WTO) reports that trade levels rose to
110.4 in March. This is the highest level since 2016. The organization
says that although the index is above average, the gains are quickly
decreasing. Nonetheless, the WTO cautions this could be a “peaking of
upward momentum in trade.” The WTO forecasts an 8 percent increase in
world merchandise trade volume in 2021. This is up from a 5.3 percent
decrease in 2020. Furthermore, the WTO warns that COVID-19 still poses
a threat to the global trade outlook for 2021. For more details,
please see Bloomberg.
On Monday, data showed Japan’s economy recovered by more than
expected in the second quarter of the year. From April to June,
Japan's economy grew at an annualised 1.3 percent following a 3.7
percent slump in the first quarter. The rebound beat forecasts for
growth of 0.7 percent.
According to the data, consumption increased 0.8 percent in April —
June from Q1. This surpassed expectations of a 0.1 percent drop. Japan
experienced a 1 percent decline in the months January to March.
Despite this, Japan’s economic growth is weaker than that of other
countries, including the United States. In the second quarter, the US
economy expanded by 6.5 percent. For more details, please click here.
This week, FedEx announced that its peak surcharges will extend into
2022. Beginning October 4 through to January 16, 2022 the carrier will
penalize shippers for oversized packages, packages that require
additional handling, and parcels unauthorized for the FedEx Ground
network. In addition, FedEx will impose per-package surcharges for
Ground Economy shipments. These surcharges will be in place from
November 29 until December 12 and peak at $3.
Furthermore, FedEx will charge customers shipping over 25,000
packages on average per week for residential packages shipped between
November 1 and January 16, 2022. The number of additional packages the
customer ships compared to volumes they sent in February 2020
determines this year’s surcharge rate. For more details, please click
On Wednesday, Target announced its second quarter sales rose,
surpassing earnings estimates. Target reports that sales rose in every
merchandise category, including apparel and grocery. This growth
exceeds 2020’s record sales from the pandemic e-commerce boom.
In the fiscal second quarter, ending July 31, Target reported $25.16
billion in revenue and a net income of $1.82 billion. Compared to
2020, revenue rose 9.5 percent, exceeding estimates of $25.08 billion.
Target attributes its second quarter success in part to back-to-school
shopping. Furthermore, the company is also predicting a strong holiday
season, adding $2.5 billion in inventories compared to the previous
year. For more information please see CNBC.
Leveraging the US Foreign-Trade Zone (FTZ) program offers many
advantages. In the QAD Precision Report we do a Q&A session with
FTZ expert Greg Jones. To read the full report, please click here.