Rising populism, policy uncertainty and trade conflicts have led to a sharp drop in confidence among global CEOs. The share of chief executives who think the global economy will slow over the next year has jumped to nearly 30% from 5% in 2018, according to a survey of 1,300 top business leaders by audit giant PwC.
The wave of pessimism extends to company earnings. Just 35% of CEOs said they are “very confident” about their growth prospects over the next 12 months, a sharp decline from 42% last year. “CEOs’ views of the global economy mirror the major economic outlooks, which are adjusting their forecasts downward in 2019,” Bob Moritz, global chairman at PwC, said in a statement. “With the rise of trade tension and protectionism it stands to reason that confidence is waning.” CNN Money
IMF says the global economic expansion is losing momentum as it cuts growth forecasts
The International Monetary Fund (IMF) revised down its estimates for global growth on Monday, warning that the expansion seen in recent years is losing momentum. The Fund now projects a 3.5 percent growth rate worldwide for 2019 and 3.6 percent for 2020. These are 0.2 and 0.1 percentage points below its last forecasts in October — making it the second downturn revision in three months. Speaking at the World Economic Forum in Davos, the IMF’s Managing Director Christine Lagarde said: “After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising. But even as the economy continues to move ahead … it is facing significantly higher risks.” CNBC
Overseas Investment Seen Rebounding as U.S. Firms Repatriate Less Profits
Corporate overseas investment will likely rebound this year as U.S. companies repatriate less profits, but will nonetheless continue to be weak by precrisis standards in the face of a darkening economic outlook and uncertainties about trade rules, the United Nations said Monday. The U.N. Conference on Trade and Development said global business investment flows fell sharply in 2018, to $1.2 trillion from $1.47 trillion in 2017. But it said most of that decline was due to U.S. companies sending profits back home in response to changes in the country’s tax law. With U.S. repatriations easing, the agency expects to see total foreign direct investment rebound in 2019, while remaining subdued compared with the years before the global financial crisis. It counts profits made overseas and not repatriated as foreign investment, in addition to the establishment of new operations and the acquisition of existing businesses. The Wall Street Journal
As more Boeing SC 787s are built, analyst expects another delivery record
After delivering an all-time-high 145 Dreamliner jets last year, Boeing Co. 787 plants in North Charleston and the Seattle area are expected to repeat their record-setting performance in 2019. That’s largely because of the production increase from 12 to 14 jets per month. Boeing won’t say exactly when the rate will tick up, if it hasn’t already, citing the “quiet period” prior to next week’s quarterly and year-end earnings report. But the company’s North Charleston campus started preparing for the boost in 2018 and planned to hire hundreds of people to support the higher rate. It’s not clear how many people now work at Boeing South Carolina because the aerospace firm hasn’t updated the annual labor report on its website. It’s likely Boeing CEO Dennis Muilenburg will address the ramp-up during his Jan. 30 teleconference with financial analysts. In the meantime, analyst Uresh Sheth, who tracks Dreamliner production on his All Things 787 website, said he thinks Boeing “will break rate by mid-February and start delivering at 14 per month around early April.” Charleston Post and Courier
D.H. Griffin to demolish former tobacco factory, making way for another NC megasite
Greensboro-based D.H. Griffin Cos. will do the honors in destroying a massive manufacturing and distribution facility in Concord to make way for yet another megasite in the state. The massive, shuttered manufacturing and distribution facility at what was once a sprawling Philip Morris operation in Cabarrus County is due to be demolished. Set to begin within 30 days, the demolition of the 3.5 million-square-foot facility is expected to take the rest of the year to complete, according to a news release. It covers roughly 500 acres of the overall 2,000-acre site, which is owned by Bootsmead LeaseCo LLC. Now called The Grounds at Concord and marketed by JLL, officials hope that clearing the site will boost its appeal to future users. Triad Business Journal
Charlotte-based Duke Energy makes offer to purchase troubled South Carolina utility
Duke Energy Corp. (NYSE: DUK) is back in the mergers and acquisition hunt, having submitted a proposal to purchase South Carolina-owned utility Santee Cooper. S.C. Gov. Henry McMaster has proposed selling the state-owned utility in the wake of the failed $20 billion-plus expansion of the V.C. Summer Nuclear Station. The July 2017 decision to abandon that project — after more than $9 billion was spent on construction — already led to the sale of SCANA Corp. to Virginia-based Dominion Energy Inc. SCANA subsidiary S.C. Electric & Gas owned 55% of the project. Duke is one of several companies and organizations to submit proposals for Santee Cooper, which has about 180,700 direct customers. It also sells wholesale power to 20 electric cooperatives and estimates that overall it provides power to about 2 million residential and business customers in 46 South Carolina counties. Charlotte Business Journal
Report: Apple to slow hiring; Austin’s new mega-campus on track
With iPhone sales falling short and revenue forecasts dragged down, Apple Inc. will cut back on hiring for some divisions, Bloomberg reports, citing anonymous sources. The intel was reportedly gathered after CEO Tim Cook met with employees earlier this month. In that meeting, Bloomberg reports, he said Austin is still on track to get a new $1 billion campus — and an expansion in Los Angeles was also specified as safe. Cook reportedly dropped the news to select employees a day after he authored a letter to investors about the company’s recent woes, particularly in China. During the meeting, Cook said he didn’t expect a hiring freeze — just that “some divisions would reduce hiring,” Bloomberg reports. Austin has a lot at stake. Not only are about 6,200 Apple employees already here, but the company announced in December that 5,000 more are on the way to a soon-to-be-built extension to the Austin campus. Austin Business Journal
SpaceX to develop, test Starship prototype in South Texas
SpaceX, the commercial space company of billionaire Elon Musk, is working in South Texas to develop and test an early prototype of the vehicle designed to take people to the moon and Mars. The Starship vehicle, with a test version recently assembled at Boca Chica beach near Brownsville, could one day carry space travelers atop a powerful rocket. The Starship integrated with the Super Heavy Rocket, previously called BFR, is expected to be more powerful than the Saturn V rocket that NASA used to propel astronauts to the moon. The assembly of the test Starship is reinvigorating the Greater Brownsville community after long delays and roadblocks. SpaceX first announced its Gulf Coast launch facility in 2014, but then years went by with little to no activity. People can now see the vehicle while driving along the beach, stopping to gawk and take pictures. Houston Chronicle
Texas unemployment rate holds at its historic low of 3.7 percent
The Texas unemployment rate in December held at its historic low of 3.7 percent as employers added to their payrolls for a 30th consecutive month, according to government data. The Texas economy added 38,000 jobs in December, according to the Texas Workforce Commission. Annual employment growth for Texas was 3.2 percent in December and marked 104 consecutive months of annual growth. Over the year, Texas has added 391,800 jobs as Total Nonfarm employment reached a new high of 12,744,100. Houston Chronicle
TSA security checkpoint at Houston airport remains closed until further notice
It’s unknown when Terminal B at Houston’s George Bush Intercontinental Airport (IAH) will return to normal operations as the partial government shutdown drags on. The Houston Airport System announced Jan. 16 that the Transportation Security Administration security checkpoint and the ticketing counter in Terminal B will remain closed until further notice. The closure began the afternoon of Sunday, Jan. 13 and is due to staffing issues associated with the shutdown. Passengers who are flying out of Terminal B have to check in and go through security at Terminal C or E before heading to their departing gate by walking or taking the Skyway tram to Terminal B. Click here for maps of the airport. Houston Business Journal
