In the QAD Precision News Round-Up: 21 January 2022, UK inflation soars; China’s economy grows; US & UK plan tariff talks; Burberry raises profit outlook; Port of Long Beach reports record volumes; plus mitigating disruptions with global trade compliance and more.
In December, UK inflation surged to a 30-year high. Higher energy costs, resurgent demand and supply chain issues have all continued to inflate consumer prices. Inflation soared to 5.4 percent, its highest since March 1992 and an increase from 5.1 percent in November. The result was also higher than the increase of 5.2 percent expected by economists polled by Reuters. Furthermore, consumer prices grew 0.5 percent on a monthly basis, surpassing projections for a 0.3 percent rise. The rising cost of living is raising expectations that the Bank of England will increase interest rates again.
Furthermore, according to the Office for National Statistics, the Consumer Prices Index grew by 4.8 percent in the 12 months to December. This is an increase from 4.6 percent in November and the highest since September 2008. Housing and household services and transport provided the largest contributions. For more information, please see CNBC.
On Wednesday, the US and the UK agreed to begin talks to resolve their trade dispute over US steel and aluminum tariffs. Despite this public commitment, no dates have been set for the negotiations. The tariffs, 25 percent on steel and 10 percent on aluminum, were first imposed in March 2018 by the Trump Administration. The UK aims to negotiate duty-free access to US steel and aluminum markets similar to that granted by Washington to the EU on January 1.
In addition, the negotiations will cover the UK’s 25 percent retaliatory tariffs on US products including whiskey, tobacco and motorcycles. The Distilled Spirits Council said annual exports of US whiskey to the UK have decreased by over 50 percent since 2018. For more information, please click here.
The Port of Long Beach moved more cargo in 2021 than in its 110-year history. In 2021, the port handled 9,384,368 twenty-foot equivalent units (TEUs). This is a 15.7 percent increase from the previous year’s record of 8.11 million TEUs. Imports are also up 14.6 percent year-over-year while exports are down 2.6 percent. Additionally, the number of empty containers also increased 27.5 percent. Despite this, the number of vessels utilizing the port declined in 2021 to 980 vessels down from 1,042 the year before. Overall, the port saw tremendous growth only declining slightly in December due to the omicron surge. For more information, please click here.
Luxury British retailer Burberry has predicted a 35 percent increase in full-year profits year-on-year to between £500 million and £515 million. The prediction comes as it attracts younger shoppers under the designer Riccardo Tisci and benefits from the end of lockdowns around the world. Furthermore, the retailer saw strong growth in Asia. Sales in the region skyrocketed by 22 percent. In contrast, European sales fell 4 percent.
According to Burberry, full price sales were up 26 percent compared to pre-pandemic levels in the three months to 25 December. This followed 10 percent growth in the previous quarter. For more information, please see The Guardian.
In the US, there were 286,000 jobless claims for the week ending January 15. This is higher than the Dow Jones estimate of 225,000. This is also up from the previous week’s 231,000 claims. As a result, this week’s claims are the highest since October 16, 2021. Additionally, the unemployment rate is down to 3.9 percent. The future employment index is also down 19 points to 38.4. Furthermore, inflation is still high with the future prices paid index up 23 points to 76.4, its highest level since August 1988. Analysts believe this will be short term and primarily due to the Omicron surge. For more details, please visit CNBC.
In 2021, China’s economy grew 8.1 percent according to China’s National Bureau of Statistics. However, the growth is slightly under the 8.4 percent predicted by economists. China’s fourth-quarter GDP is also up 4 percent compared to the previous year. Consequently, this is an increase from the forecasted 3.6 percent growth. However, retail sales only grew by 1.7 percent in December missing predictions of a 3.7 percent increase. Nonetheless, compared to its 2020 GDP growth of 2.2 percent, 2021 was a considerable improvement. For more details, please click here.
The global supply chain is surprisingly brittle for such a strong-sounding name. In a 2017 study by the University of Tennessee, it was reported that as many as 90 percent of the participating firms did not quantify supply chain risk and trade compliance as a threat to their business.
Yet according to one metric, global economic policy uncertainty has risen sharply since the beginning of 2018. It doesn’t have to take a once-in-a-lifetime event like COVID-19 or Brexit to see a huge impact on a company’s performance and bottom line. Take the life sciences industry for example: regulations, guidelines, and procedures are constantly changing and violations of global trade compliance can stain a company’s reputation—and they risk severely falling behind competitors.
To mitigate disruption, it is best to first understand what global trade compliance is. In this QAD Precision Report, we explore the risks of non-compliance and how to mitigate them in the year ahead. To read the full report, please click here.