Читаем без скачивания Английский язык. Практический курс для решения бизнес-задач - Нина Пусенкова

The 2003 numbers are a «distraction compared to the big story of where this is all heading,» said Kent Conrad, the senior Democrat on the Senate Budget Committee, «a fiscal crisis unlike any we’ve ever seen.»

Source: Washington Post, 20 October 2003 (abridged)

U.S.: Businesses Are Betting On A Happy New Year

Businesses appear to be casting off their summer caution, and that’s good news for 2005. Earlier this year, the oil shock and election uncertainty clouded the outlook, causing companies to delay some of their inventory-building, capital projects, and hiring. Now, companies seem to like what they see, especially the rebound in consumer spending and the lower dollar, which will provide a boost to exports and profits.

Corporate America is gearing up once again. Just look at the rising trends in industrial orders and output, suggesting that companies are responding to the stronger pace of demand. Companies appear to be interested in expanding their operations, not just in replacing obsolete equipment. Growing payrolls are another key sign that businesses are willing to expand. All this is supporting economic growth this quarter, and the momentum should carry over into the new year.

The reason businesses are increasingly willing to shell out more for equipment and payrolls is evident in the details of the Commerce Dept.’s update on Q3 real GDP. Commerce says the economy grew at a 3.9% annual rate over the summer, instead of the 3.7% pace originally reported. And while the overall revision to the past was small, the underlying data show a sharp upward shift in prospects for the future.

Spending in all sectors grew at a 4.9% annual rate, but businesses built up their inventories by less than estimated. With inventories lean, output will have to be boosted to meet rising demand. All this implies further growth in jobs, income, and spending.

This virtuous cycle explains why many companies are starting to look at expansion plans. The Business Roundtable’s CEO Economic Outlook Survey shows that executives expect the economy to grow at a healthy pace in the first half of 2005. 50% of the CEOs expect their companies to increase capex in the next six months.

The upturn in capital spending got its start when companies began to replace aging, short-lived tech equipment. During the first two years after the recession ended, spending on IT gear accounted for 70% of the growth in overall equipment outlays.

In the past year, with industrial operating rates rising and with demand strengthening, businesses boosted their spending for more traditional machinery and equipment. Q3 business outlays for all types of equipment and software increased at a sturdy 17.2% annual rate, faster than the 14.9% pace first reported. Outlays for IT equipment slowed last quarter, but spending on nontech items accelerated. Industrial machinery was up 27.2%; transportation equipment soared 35.4%, the largest quarterly gain in nearly six years.

That trend is continuing this quarter. Machinery orders posted a strong gain in October, while transit equipment saw a small rise. Total orders for capital goods, excluding aircraft, were reduced by 3.6%, but that followed a 5.2% jump in September.

Despite the recent interest-rate hikes, financing this spending won’t be a problem. Corporations have enough cash flow to cover all their capital outlays. True, profits will grow more slowly as costs rise, but that’s compared with the superstrong pace of recent quarters. Q3 profits from current production fell 2.4% from the second quarter, and the growth from the previous year slowed to 8.4%, vs. 19% in the second quarter. But hurricane-related payouts by insurance companies and uninsured losses subtracted nearly $80 billion from the total. Excluding that, profits last quarter would have grown 16% from the year before.

A more critical question mark for capital spending is the yearend expiration of the 50% «bonus depreciation» allowance granted companies in the 2003 tax package.

Companies have to be pleased by the way consumers have bounced back from the initial impact of the oil shock. Commerce now says consumer spending grew at a 5.1% annual rate last quarter. Clearly, higher energy prices have hit households. But important offsets are coming from better job growth, which is boosting incomes, and sizable gains in household wealth, which is lifting borrowing power.

Last quarter’s spending increase is a reminder that consumers’ actions don’t always line up with how they say they feel. The index of consumer confidence has fallen steadily since July. In November it slipped to 90.5 from 92.9 in October. And for the second month in a row, households said they have diminished expectations for the future. But October non-auto retail sales were strong, and the holiday shopping season appears off to a decent start.

The continued upbeat trend in demand, the ongoing rise in capacity utilization, and the excellent financial condition of corporations all support the notion of a positive outlook for capital spending. Capital spending and job growth have always moved in tandem. Thus, the economy is most likely on its way to a happy new year.

Source: Business Week (online), Dec 13, 2004 (abridged)

The Rush to Invest in Russia

It’s official: Russia is a magnet for money. For the first time in its post-Soviet history, Russia in 2005 attracted more private capital than it exported. The capital inflow is a sign of the huge appetite for Russia among foreign investors and lenders, who are now pouring more money than ever into Russian loans, securities, acquisitions, and greenfield investments.

True, last year’s net private capital inflow was just $300 million – less than 0.1% of GDP. China, by comparison, logged inflows equal to 6% of GDP in 2004. Still, Russia’s results were much better than government forecasts, which earlier last year anticipated a net outflow of up to $10 billion.

The unprecedented surplus represents a dramatic turnaround from the days when money used to leak out of Russia like a sieve. Net private-sector outflows averaged around $20 billion a year during the late 1990s, a sign that neither local nor foreign investors could be induced to park their cash in a country infamous for its political and financial instability.

«Impressive turnaround». Even the recovery of the Russian economy after 2000 didn’t immediately stem the hemorrhage. True, by 2003, the annual net outflow had fallen to just $1.9 billion. But then came the notorious Yukos affair. Investors were horrified, and capital flight shot up again, to $8 billion in 2004.

The latest figures are a sign that foreign investors have recovered their nerve. «It’s an impressive turnaround, given fears of a worsening following Yukos. The country and business shrugged that off, and people are investing relatively happily,» says Al Breach, research director at Brunswick UBS.

A key factor driving last year’s surge was the continued strong performance of the Russian economy. GDP grew by 6.4% last year, buoyed by record high oil prices. Rising tax revenues from energy exports also mean that the government’s finances are impressively healthy. Last year the government ran a budget surplus equal to 7.5% of GDP. The improvement in Russia’s public finances prompted international credit rating agencies to upgrade the country to investment grade, which has added to Russia’s investment attractiveness.

Foreign loans. So where is all the money going? The Central Bank’s data show that loans to Russian companies accounted for the bulk of the inflows. These were worth some $39.4 billion, up from $16.2 billion in 2004. Russian banks, too, were active in borrowing abroad, raising some $18 billion, or $5.3 billion more than they invested overseas. In comparison, portfolio investment amounted to just $3.1 billion – still a big improvement from $800 million in 2004.

The growing share of loans could be grounds for caution. Although a healthy sign of bankers’ confidence in Russian borrowers, bank lending generally brings fewer benefits to a recipient country than other forms of investment, and may even be risky if debts get out of hand. What’s more, notes MDM’s economist Peter Westin, the surge in foreign borrowing partly reflects the weaknesses of Russia’s own underdeveloped banking and financial systems.

More worrying than the build up of debt is that much of the new loans are going to state companies rather than to the private sector. Last year Gazprom took out a mammoth $13.1 billion loan from a consortium of Western banks in order to finance its acquisition of Sibneft. Likewise, state oil company Rosneft borrowed $6 billion from state banks, indirectly financed from abroad, to fund its controversial purchase of Yukos’ main production unit.

Strengthening government. That’s why not all Russians are impressed by the healthy balance-of-payments data. Skeptical local newspapers argue that foreign borrowing is being used to finance creeping renationalization of the Russian economy. Russia’s finance ministry has also criticized the growing appetite of state companies for foreign loans. Last year finance minister Alexei Kudrin called for caps on the amount that state companies could borrow abroad.

A more positive indicator of foreign investor sentiment towards Russia is foreign direct investment (FDI). FDI was up by 38% to $16.7 billion. That’s a far cry from the days, prior to 2003, when Russia managed a meager FDI trickle of $4 billion each year.

With so much hard currency now flowing into Russia the government has been able to dramatically improve its financial position. Last year it repaid some $21.3 billion in foreign debt, while the Central Bank’s forex reserves jumped by $61.5 billion, or 51%. This remarkable improvement in the country’s public finances is one reason why Russia watchers see few negative clouds on the immediate horizon. Barring a spectacular upset, such as a dramatic fall in international oil prices, Russia could well prove to be an even bigger magnet for foreign investment this year.

Source: Business Week (online), Jan. 20, 2006 (abridged)

Essential Vocabulary

1. tax revenues – налоговые доходы

2. Congressional Budget Office (CBO) – Бюджетный комитет Конгресса

3. close the books – закрытие бухгалтерских книг к концу периода

4. fiscal year (FY) – фискальный, деловой или финансовый год

5. budget deficit – дефицит бюджета

6. tax receipts – налоговые поступления

7. corporate tax – корпорационный налог

8. sluggish a – застойный, вялый

9. individual income tax – подоходный налог на физических лиц

10. Medicare – государственная программа бесплатной медицинской помощи престарелым

11. Social Security tax – налог на социальную защиту

12. interest payments – процентные платежи

13. federal debt – государственный долг

14. government (public) finances – государственные финансы

15.inventory building – наращивание запасов

16. industrial order – промышленный заказ

17. pace n – скорость, темп

18. obsolescence n – устаревание, износ

obsolete a – устаревший

19.payroll n – общая сумма денег, которые предприятие регулярно выплачивает сотрудникам; ведомость на получение зарплаты

20. momentum n – импульс, движущая сила, толчок; темп

21. Commerce Department – Министерство торговли США

22. update n – обновление, модернизация, изменение в соответствии с новыми данными

update v – обновлять, модернизировать, изменять в соответствии с новыми данными

23. upward (downward) – направленный или движущийся вверх (вниз)

24. capital expenditures (capex) – капитальные расходы (на приобретение или реновацию основного капитала)

25.capital goods – капитальные товары (средства производства, здания, дороги и др. активы, используемые при производстве других товаров)

26. subtraction n – вычитание

subtract v – вычитать

27. expiration n – окончание, истечение срока

expiry n – окончание, истечение срока

expire v – истекать (о сроке), кончаться, терять силу (о законе и т. п.)

28. depreciation n – снижение стоимости, обесценение, снижение курса, девальвация, амортизация материальных активов

depreciate v – обесцениваться, уменьшаться в стоимости, амортизироваться

29. allowance n – налоговая скидка; денежное содержание; допущение, резерв; скидка с цены

30.tax package – комплекс мероприятий в области налоговой политики

31. household n – семья, домашнее хозяйство

32. consumer confidence index – индекс уверенности потребителя

33. capital inflow – приток капитала

34. greenfield a – новое предприятие, дочерняя компания, создаваемые с нуля; освоение новых территорий