In the QAD Precision News Round-Up: 6 August 2021, US trade
deficit at record high; China’s manufacturing growth slows; DHL to
buy electric cargo planes; Toyota and Honda report profits; private
job creation falls; plus sustainable last-mile delivery.
As the American economy rebounds, the US trade deficit rose to a
record $75.7 billion in June due to increased demand for imports. On
Thursday, the Commerce Department reported that the deficit grew 6.7
percent from a revised May deficit of $71 billion. Last month's
deficit set a new record, beating the previous record of $75 billion
in March 2021. In addition, exports in June grew 0.5 percent to $207.7
billion while imports surged 2.1 percent to $283.4 billion.
Furthermore, in June, the goods deficit with China climbed to $27.8
billion, an increase of 5.8 percent from the month previous.
In the first six months of 2021, the US trade deficit totaled $428.6
billion, up 46.4 percent from the deficit during the same period in
2020. However, according to analysts, the growth in the deficit may
start to slow in the coming months as the surge in consumer spending
following the reopening of the economy begins to level off.
Additionally, analysts expect increased growth in foreign countries to
boost US exports. For more details, please see AP News.
On Tuesday, the United States Foreign-Trade Zones (FTZ) Board
released its annual report to the US Congress. The report details the
FTZ activity for the 2020 calendar year. In 2020, there were 195
active FTZs, an increase of 2 from 2019. There were 347 active
production operations, down from 348 in 2019. Additionally, a record
number, 470,000 people were directly employed by 3,400 firms utilizing
FTZs.That figure represents an increase of 10,000 jobs and 100 firms
The value of shipments into zones decreased by 18.5 percent, from
$767 billion in 2019 to $625 billion in 2020. Of these shipments, 55
percent for production operations and 45 percent for warehouse and
distribution operations. Exports from FTZ facilities also decreased by
$11 billion since 2019 to $94 billion in 2020. For the first time,
pharmaceuticals topped the list of largest industries involved in zone
production, followed by oil refining, automotive, electronics, and
machinery/equipment. For more details, please see the FTZ
China’s manufacturing growth in July has dropped to the lowest level
in 15 months. Caixin, a business magazine, released a monthly
purchasing managers’ index showing the decline. In July, China scored
a 50.3 out of an available 100 points. This is a decline from June,
where it reported a score of 51.3. Figures above 50 indicate
increasing activity. The decline, attributed to a decrease in export
demand from foreign markets. The decline also highlights a disruption
in supply chains from the raw materials and components segment. For
more details, please visit AP News.
On Wednesday, the payroll processing firm ADP reported job creation
at private companies in the United States fell in July. Overall,
employers added 330,000 positions in July, a significant decrease from
680,000 added in June. The jobs created in July also fell
significantly below the Dow Jones estimate of 653,000.
The industry that added the most jobs in July was leisure and
hospitality creating 139,000 jobs. Education and health services
followed with 64,000 new jobs, and professional and business services
with 36,000 jobs. The construction industry added the fewest jobs with
1,000 new jobs in July.
Mid-size companies with 50-499 employees added the most new jobs with
132,000, followed by large companies with 106,000 jobs, and finally
small businesses with 91,000. July’s reported job growth was the
smallest gain since February. The decrease is being attributed to the
Covid-19 delta variant spreading. For more information, please visit
On Tuesday, DHL Express announced that it will purchase 12 electric
cargo planes for package delivery in the US in an effort to cut carbon
emissions. The planes, purchased from start-up Eviation and will be in
operation by 2024. Eviation is building a plane, called the Alice,
that has the capacity to carry 2,500 pounds at a maximum speed of 250
mph and can travel 500 miles on one charge. The planes will move
packages from major hubs in the US to smaller markets within range —
the so-called middle mile. CEO of DHL Express Americas Mike Parra said
the use of the electric planes is in line with the company's
sustainability pledge. For more details, please see CNBC.
On Wednesday, Toyota Motor Corp reported record quarterly earnings
and Honda Motors raised its annual profit forecasts. Sales for both
the Japanese car makers increased following coronavirus lockdowns.
However, both companies warned that the global chip shortage would continue.
The two automakers are facing production constraints in China, which
on Wednesday reported the greatest increase in locally transmitted
COVID-19 cases since the beginning of this year. Honda and Toyota have
both had to temporarily close facilities in China citing Covid-19
outbreaks. Toyota reported that it is on track to sell 8.7 million
cars by March 2022. Honda lowered its forecasted sales to 4.85 million
vehicles from a previously estimated 5 million. Both companies are
attributing lower numbers to the global semiconductor chip shortage.
AlixPartners estimates that the shortage will cost companies $110
billion in lost revenues this year. For more information, please see
Around the world, government bodies and consumers are becoming more
and more concerned with their impact on the environment.
The European Commission, the EU executive body, recently launched a
major climate plan. This plan outlines how the bloc's 27 member
countries can meet their environmental goals. EU members have been
tasked with reducing net greenhouse gas emissions by 55 percent from
1990 levels by 2030. This is a step towards achieving the EU’s target
of "net zero" emissions by 2050.
Consumers are also becoming more aware of the choices they make and
their impact on the environment. As a result, carbon-neutral delivery
is becoming increasingly important to consumers. Read the full report