U.S. Growth Slowed in Q2
From April to June, the value of all goods and services produced in the United States grew at a more sluggish pace than initially estimated. The U.S. Department of Commerce has lowered its estimate of economic growth in the second quarter to an annual rate of 1.6 percent, down from an initial estimate of 2.4 percent issued last month. The revision, announced last week, marks a sharp slowdown from the annual rate of 3.7 percent in the first quarter.

"Corporate investment in such big-ticket items as new machinery and computers drove a lot of the growth in the second quarter but trouble in the nation's housing sector, unemployment and, especially, trade all were a drag," the Washington Post's Political Economy blog notes.

Based on more complete source data than were available for the "advance" estimate issued last month, the revision shows imports of goods and services increased 32.4 percent, the biggest jump since the first quarter of 1984. However, inventories and exports were revised lower.

"Still, the revised estimate for the second quarter was above expectations for a 1.3 percent gain among economists polled by Dow Jones Newswires," the Wall Street Journal reports. Moreover, economists polled by MarketWatch also anticipated a downward revision in the second quarter to 1.3 percent growth.

"On the positive side, Friday's report showed stronger-than-expected spending by consumers from April to June," the Journal says. "The biggest component of GDP rose 2 percent, above the initial second-quarter estimate of 1.6 percent. Spending by Americans rose 1.9 percent in the first three months of the year."

U.S. Toughens Trade Law Enforcement
In an attempt to further curtail unfair or illegal foreign trade practices, the U.S. government last week introduced a new set of measures to support the National Export Initiative — aimed at doubling exports within the next five years — by establishing stricter guidelines for international companies doing business in the U.S.

The new proposals, announced by the U.S. Department of Commerce on Thursday, are intended to make it more difficult for individual companies to avoid paying nationwide duties and include adjustments to anti-dumping calculations as well as changes to how labor rates are set under conditions where products are sold at artificially low prices.

"Although less than 3 percent of imports into the United States are hit with anti-dumping or countervailing duties, the trade laws can be an important source of protection for sectors such as steel, tires, paper and other industrial goods," Reuters reports.

Some of the key measures among the list of 14 proposed changes include: removing duty exemptions for companies that proved they were not dumping goods over a certain period of time; requiring importers to post cash deposits for goods or services entering the U.S. if even a preliminary investigation into their practices is launched; and altering anti-dumping calculations to more accurately reflect how trade prices function in "a non-market economy."

"This is a very important move on the part of the administration," Dan DiMicco, CEO of steelmaker Nucor Corp. and a member of an advisory panel on manufacturing issues, told Bloomberg News. "Before American manufacturers get out of bed in the morning, they're already at a 40 to 60 percent disadvantage. As long as we continue to let them get away with it, they'll keep doing it."

The measures are likely to have a significant effect on China, as the Commerce Dept.'s changes "would allow the department to subtract Chinese export taxes when calculating the size of anti-dumping or countervailing duties," Reuters explains. "That is common practice now for unfairly traded goods from 'market economies' like Japan and countries in Europe. But it has not been the case for non-market economies like China on the theory the taxes are too hard to measure."

Skilled-Trades Positions Hardest to Fill Despite Urgent Need
Worldwide, skilled-trades positions are the hardest to fill, according to a recent Manpower Inc. survey of 35,000 employers across 36 countries and territories. The lack of these skilled workers could inhibit national growth and impede the progress of infrastructure projects.

The company's 2010 Talent Shortage Survey named the U.S., Germany, France, Italy and Canada as some of the countries where employers ranked skilled trades as their No. 1 or No. 2 hiring challenge. Yet the skilled labor shortage is not limited to developed countries. The apparent shortage in large developing countries like China, India and Brazil may "impede the progress of infrastructure projects and jeopardize national growth," Manpower says.

"[U]nless businesses, governments and trade associations work together to develop long-term strategies to alleviate talent shortages among skilled trades, future economic growth will suffer," Manpower warns.

Manpower recently published a paper entitled Strategic Migration — a Short-Term Solution to the Skilled Trades Shortage, which address the problem, calling for "long-term, collaborative strategies to alleviate shortages of skilled workers, including promoting positive attitudes towards skilled-trades work and ensuring that the technical training workers receive reflects the current demands of industry.

"Inadequate training and negative stereotypes relating to skilled trades are further fueling a dangerous shortage of skilled workers," Manpower Chairman and CEO Jeff Joerres said. "Employers and governments need to bring honor back to the skilled trades."

Automotive M&As on the Rise
The rate of mergers and acquisitions (M&As) in the global automotive industry showed a gradual upward trend through the first half of 2010, with the number of deals rising while deal value dropped significantly, indicating that a major restructuring period may be over.

According to a report from PricewaterhouseCoopers (PwC) last week, 265 M&A deals were concluded in the automotive industry in the first half of this year, up from 257 in the first half of 2009. However, the total disclosed deal value for the first half (H1) of 2010 was $11.6 billion, compared to $31.6 billion in H1 2009, a year-over-year drop of 63 percent. This fall may be a positive sign, suggesting an end to the massive restructurings and capital infusions that occurred last year.

"[A]s firms aim to position themselves for long-term success, the deal market appears to be transitioning towards creating and executing strategies for sustainable growth and value creation," according to PwC. "Focus on synergistic transactions during H1 2010, coupled with the subdued pace of economic recovery meant smaller but arguably more strategic transactions."

Vehicle manufacturers and parts suppliers have been more active in the deal market in 2010 because many companies are now seeking to divest non-core business components, strengthen their core competencies and engage with new markets or consumers.

"Strategic objectives such as growth-based strategies (increasing market share, acquiring technologies or accessing new markets) or product portfolio driven strategies will continue to shape and define much of the deal market," the report explains. "As a result, smaller, targeted deals are likely to remain the majority of the deal activity in the near term."