Hans-Peter Keitel, chief executive of Hochtief, the largest construction company in Germany, has some enviable problems that help explain why a European company can be sanguine in the face of an expected slowdown at home.
Though Hochtief’s German business may slow somewhat next year, its Australian subsidiary – from which it services the booming Asian market – cannot lay bricks fast enough. Constrained only by a shortage of building engineers, the outlook is sunny, to say the least.
“This kind of strength allows me to be a little more relaxed when I look at the other regions like Germany,” Keitel said. “In Australia there is not a cloud in the sky.”
Figures released Friday showed the U.S. economy grew at a pace of only 1.6 percent in the third quarter, the slowest in more than three years.
But in European boardrooms, the prospect of a slowdown in the United States – still Europe’s largest export market – is producing little more than a shrug. Years of restructuring have left companies significantly better able to weather a rough patch than five years ago, the last time the European economy fell into serious trouble.
“If you are just reliant on the United States, then it’s an uncomfortable position to be in,” said Julian Waldron, chief financial officer for Thomson, the French technology and media company. “But there are opportunities in the world that are much more interesting than people give credit for.”
Many companies have sought to wean themselves from relying too heavily on the American economy – particularly after the technology bubble burst six years ago – to inoculate against potential shocks if the U.S. market begins to cool too rapidly.
With the housing bubble on its way to deflation an easy means of short-term investing is about to disappear. The heart of the U.S. economy depends on consumerism. Are we prepared to make the same adjustments Europeans have already made?
Wise move from the Europeans.
When the interest payments from our national credit card passes the 50% mark of every tax dollar paid, it will prove a wise move.
However, in the Republican party’s defense, this should happen when it’s our grand children’s problem, not ours. They do have a good point.
Europe can’t feel too impudent; they’re in the same boat. The coming major correction and collapse of the dollar won’t hit there as hard, but it will definitely be felt. Only a few countries, like Switzerland, are truly safe. [edited]
Are we prepared to make the same adjustments Europeans have already made?
Obviously not or the US wouldn’t be heading for this trouble. I’m almost entirely ignorant of economics (as my bank manager would readily confirm) so I’m not sure to what extent this would affect Europe, but it certainly would affect us to some degree.
Europes problem is they keep raising their taxes to meet some EU’s budgeter’s guidelines. Their productive people head elsewhere looking for work.
Several European countries have debts that are substantially higher in relation to Gross Domestic Product, than the USA.
First off, America’s economic slowdown is debatable and since I’m bullish I still think there are three to four years of expansion left. But even if it drops from 3% rise in GDP to 1.5%, this measurement compared to European standards is far from a slow down, that’d be close to a robust expansion. Comment #1, European nations do have a sizable amount of dept in terms of (debt/GDP), and comment #2 there will not be a collapse in the dollar. And what do you mean by “are we ready to make the same adjustments”? If you mean restructuring the production process that has already been done over the last 5 years; the low rise in wages (they’ll catch up over the next 2 years helping the consumption variable in the Aggregate Expenditure model) is proof of this. If Uncle
Benny Bernancke will keep interests rates stable then we’ll be fine and won’t have to follow the EU model which I really don’t want to get into.
We have inflated the Dollor so high, that ALl the loans we have, IF based on the Economic Value, and we DROPPEd it into the dirt, COULD save us abit of money.
If the Loans we have Arnt based on economics, and are based on Value… If we drop the value of our money we will Owe about 2-3 times as much…
My concern from long ago, is 1 question..
“What happened to the single income family??”
Most itmes the Profits Made arent going to the Maker of the product.
Which includes the farmers. We dont have many FARMS that are self sufficent any more..most are owned by 1 of 3 corps.
Only an OLD corp that has Full control of there product to the reseller is making HIGH profits. Fuel/gas, Cars/trucks and Exon are among those.
It used to be that the utilities, were regulated.. NOW they are into BUYING power back and forth, until it hits a HIGH price, considering WE/US gov. built the dams that power most of this nation, they are getting the prices so high(that they rented/leased for ALMOSt nothing).
The dollar has not been inflated, it has actually decreased in value over the past five years. In terms of farming, American innovation has led to economies of scale production where a single farming family cannot compete with large scale production models. Is this bad? For the single family farmers yes, but for the vast sum of individuals who consume these products, no. This arises from that fact that the large scale production models produce the goods at a much lower price, which increase the real wage of those single families. You’re argument against the makers of the product as being the sole beneficiaries of profit is wrong, These producers utilize labour to produce these goods, assuming that wage is tied to the value of the marginal product of labour, these workers will benefit from an increased profit in the long run.
MX,
do you live in the Rural areas??
Do you KNOW how much is being paid, even to Whites??
Trucking for the farming industry AVERAGES about $5 per hour…$50 per day on a 10 hour shift.
the farmer gets about $2.35 per 100 lbs of potatoes..And most other crops are the SAME… And you are willing to pay McD $1.59 for 1/4 lbs…
So, WHOM is getting the profit??
And LONG run?? WHERE?? WHEN??
I know the folks that work these shifts, and I KNOW the medical coverage they are getting… LITTLE or NONE…
#9, “Do you KNOW how much is being paid, even to Whites??”
Are you a member of the KKK? Even to “Whites”? What does that mean? Blacks deserve less?
well,
It means that most the people HERE will probably think its All mexicans out there in the fields…
Its NOT.
Thats what it means… And in this area, There are More Euro white decendants out there, then there are of the S. american Spanish Inca mix..
So, blow it out your Short high strung, Hairless Dog, Miguel.