Services with a smile prop up UK growth

Britain’s services sector came to the rescue in April, with growth there suggesting there is further growth out there in the wider economy.

It also suggests the Q1 figures may need revising as they were far more pessimistic about GDP in particular.

Surveyors Markit/CIPS said the April numbers pointed to “robust growth momentum”, and that the weak start to the year was over.

However that upswing in purchasing managers’ confidence was not reflected in the construction and manufacturing sectors, which both weakened and were showing “warning lights flashing about the sustainability of growth.”

The latest figures confirm investment spending remains weak, and that the economy as a whole has become services-heavy. It, along with consumer spending, are increasingly the sole agents of growth.

Productivity is flatlining, so any slowing in growth will immediately create fiscal pressure and hit living standards.

Also on Wednesday the National Institute for Economic and Social Research lowered its growth forecast for economic growth this year to 2.5 per cent, down from the 2.9 per cent it forecast in February.

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Siemens to slash 4500 jobs

More jobs are to go at Siemens after the German industrial giant
posted a larger-than-expected drop in quarterly profits.

Siemens says its digital factory unit underperformed, compounding problems in the energy division.

Four thousand five hundred jobs are to go, with half in Germany, or 1% of the global workforce, many from the gas turbines business which has been hit by poor demand and price erosion. The company’s sprawling portfolio also contains other loss-making divisions.

Analysts say Siemens will struggle to raise industrial margins to 10-11% in the short term.

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UK economy: whats behind these royal figures?

In this edition of Business Line we take a closer look at the UK’s economy and its key components.
Why does the OECD say the country’s growth rate is the highest in the G7 leading nations? To answer this question we focus on the UK GDP growth, the country’s unemployment data and inflation figures.
We also speak to Euronews’ Sarah Chappell in London to find out people’s hopes and fears.
Finally, in our IT-dedicated segment, we’ll explore the consequences of expansive monetary policies on computer prices. Believe it or not, the QE has had in impact on the PC

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US fines drive Alstom into loss

Despite rises in both income and sales French transport and power firm Alstom turned a loss last year to the tune of 719 million euros.

The previous year the company made a 556 million euro profit.

The poor figures are being blamed in part on a 684 million euro fine imposed on Alstom in America for criminal bribery charges.

The company’s medium-term earnings targets remain unchanged
but it will not be paying a dividend for 2014.

Alstom says it is close to selling its power equipment division to GE, and it is deciding how much of the 12.4 billion euro raised will go to shareholders.

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VW's Winterkorn says it's back to business for carmaker

Volkwagen’s boss has spoken out about the future for Europe’s number one carmaker and sought to put the boardroom battles behind at the annual shareholders meeting.

The company is on the hunt for a new chairman which it wants to appoint quickly, said Martin Winterkorn.

“It is good that we have returned to calmer waters, that we have clarity on our future strategy and above all that we can fully concentrate on the business,” he told shareholders in Hanover.

However why stop at just getting rid of the company patriarch say some who want bigger changes at the top to ensure a revival of the
carmaker’s fortunes.

“I don’t think Mr Winterkorn’s contract should be renewed. I believe that the future holds so many new things and I’m not sure a 68 year-old’s up to it,” said shareholder Imsold Schroeder.

Plans for integrating VW’s different truck businesses are being speeded up as VW seeks to take on market leader Mercedes, costs are being cut at car operations, and the US division is being boosted.

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