Business News Online

By Tim Duy, Oregon Economic Forum sponsor, KeyBank.

The University of Oregon Index of Economic Indicators™ edged down 0.2 percent to 86.3 (1997=100).  Compared to six months ago, more than half the index components declined while the UO Index fell 5.9 percent (annualized).  In the past, declines of this magnitude signaled impending weakness in Oregon nonfarm payrolls.

Highlights of the report include:

•         Weak economic conditions continue to weigh on labor markets. Initial unemployment claims rose again, continuing the upward drift that began in April.  Employment services payrolls – largely temporary hiring – were essentially unchanged.  Both trends are disappointing and signal that despite being in a recovery phase, the pace of economic activity continues to fall short of that necessary to generate solid job growth. •         Consumer confidence continued to decline. Although household spending is growing, weak job growth tempers the pace of gains. •         New orders

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Supermarket giant Tesco unveiled a 12.5% rise in half-year profits to £1.6 billion today.

The result came despite “modest” UK sales growth in the 26 weeks to August 28, constrained by higher fuel costs as customers spent more at the pump instead of in store and due to low food inflation.

Delivering his last set of results, outgoing chief executive Sir Terry Leahy said the retailer – which plans to create 9,000 jobs in the UK this year – was experiencing “the tailwinds of recovery”.

The firm said UK like-for-like sales excluding petrol rose 1.3% in the second quarter, compared with 1.1% in the first quarter – but, adjusting for VAT sales, the figure was just 0.3% higher over the half-year.

Finance director Lawrie McIlwee said UK like-for-like sales had been modest because “the economy is pretty stagnant” although there were “signs of a recovery”.

He said higher food inflation last year made for tough comparatives, while higher fuel costs meant customers had less to spend in stores.

Looking ahead, Mr McIlwee said “the lapping effect” of inflation was decreasing and customers remained loyal.

He said there are now 16.5 million Clubcard holders in the UK, and added: “Tesco customers seem to be much more loyal than our competitors’.”

But Mr McIlwee said consumers in the UK still faced great uncertainties.

He said: “We’ve got the spending review and we’ve got VAT going up in the second half, but there are signs of a recovery.”

Mr McIlwee said Tesco Bank was now a “significant” part of the group’s business, with revenues of £474 million in the first half, with trading profits up 12.2% to £129 million

He said new insurance products and a fixed-rate savings account would be made available in the next few months after Tesco recently tied up with Fortis, the Belgo-Dutch insurance group.

Mr McIlwee said Tesco hoped to offer mortgages next year, with a current account to follow, following regulatory approvals from the Financial Services Authority (FSA).

Mr McIlwee shrugged off rising competition from the likes of Waitrose and Sainsbury’s.

The most recent figures from consumer research firm Kantar Worldpanel showed Tesco’s market share slipping to 30.8% from 30.9%, with growth trailing behind its rivals.

But Mr McIlwee said: “We like competition. It was interesting that Wa

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While many business owners plan for the survival of their businesses in the event of death, many don’t consider the effects of disability on the firm’s future. Or, like many of us, they just don’t believe they will ever become disabled. However, the probability of a disability is significantly higher than death:

2,650 – The number of people disabled each hour due to an accident, compared to 13 who die from an accident.¹

43 – The percentage of people age 40 who will have a long-term disability event prior to age 65.²

Two types of coverage can help:

1. Disability buy-out insurance provides funds for the purchase of a disabled business owner’s interest in the event of a long-term, total disability.
2. Overhead expense insurance covers operating expenses of a business when the owner can no longer generate revenue due to disability.

The two products work nicely in tandem. Overhead expense fills the gap immediately following the onset of disability to keep the doors open. If the disa

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AN AIRCRAFT maintenance firm has landed a contract which it hopes will provide a springboard to nearly double its turnover over the next five years.

Aircraft Maintenance Support Services (AMSS), which has its headquarters in Pyle, near Bridgend, has won a contract to supply Abu Dhabi’s airport with ground support equipment.

The contract with Abu Dhabi Airport Services (ADAS) is worth £1.2m for AMSS and follows a £7m contract that it won to supply peacekeeping export equipment from the Atlas family of aircraft loaders over the next few years.

AMSS, which is a family-owned company headed by entrepreneur Duncan Barber, operates at a turnover of £12m and said that it hopes to create between 11 and 20 skilled manufacturing jobs on the back of the deal.

The firm already employs 110 at its Pyle base.

The company said it was aiming to double its turnover over the next five years.

The firm will supply the airport – which has seen a 7% increase in traffic in August alone – with specialist ground equipment for aviation, for loading and unloading aircraft.

Mr Barber said the deal represented the biggest order the company had struck in the Gulf and that it wanted to make it a “foundation stone for more work” in the area.

AMSS has around 65% of its production in the export market after the recession and said that the deal represented an “expression of trust” that ADAS put in the firm.

Mr Barber – whose son is also involved in running the company – said that companies in the UK were trusted around the world and the deal showed the “integrity” of Welsh firms.

He said: “We cannot expect any favours from anybody, we have got to perform as we were up against companies from France, Turkey, China and America so we need to impress with the quality of what we offer.”

Graham Keddie, general manager at Abu Dhabi Airport Services, said the firm had won the contract despite “intensive” competition through a tender process.

He said: “This is the first time we have used AMSS and that is purely down to the quality and price of the products.

“AMSS won despite being up against a number of larger firms – including two of the largest in the world – and some tough negotiations with us and that is credit to their approach.”

Mr Keddie added that he hoped that the relationship could become an “established, long-term” one, adding that while the airport continued to grow there was an opportunity for suppliers to get more business.

AMSS was founded by Mr Barber in 1978 and its work is now split between civilian and military contracts, with some of its equipment currently used in theatre in Afghanistan.

Mr Barber – who has grown the company with no financial help from the Assembly Government – said that he will not sell the company to a larger, multinational company and will work to ensure that the firm stays in Wales.

He added that the Welsh business environment was a good one, and that there was a high-skilled manufacturing workforce in South Wales.

“We are a privately owned firm and we remain very proud of that and I intend to keep it that way. We wouldn’t float on the stock market and I would no

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Writing about starting a home-based business in Manitoba, Joel Schlesinger discusses do and don’ts of operating a home-based business that apply to everyone thinking of starting a home-based business (Self-employed workers can make it work from home, Winnipeg Free Press).

Several of the points he raises bear repeating because they’re the cause of so many of the problems that people experience when starting home-based businesses.

• Do: Get the proper permits and licensing. Many people assume that home-based businesses don’t need to be licensed. But they do in most places, and the permits and licenses required vary from place to place. Schlesinger’s article recommends using BizPal, an online program that will tell you what permits and licenses you need, which is excellent advice, but you can also call your municipality to find out.

• Don’t use your home phone line as both your business and personal line.

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When it comes to marketing and seeking out new business a lot of companies focus on the private sector and do not realise the public sector also has many opportunities to offer. In the UK marketing to the public sector is worth an estimated £220 billion every single year, encompassing over 100,000 individual tenders. Probably the most lucrative business opportunities come in the form of NHS tenders which incorporate a diverse range of both services and products, from huge extensive contracts to the supply of day to day materials. Whatever the nature of the tender, one the biggest benefits of sales to the public sector would be the vast potential for repeat business time and again.

The UK public sector consists of over 4000 individual organisations, which the NHS is just one of. Legally all goods and services required by the public sector needs to be tendered, so that any UK business can openly compete for the contract. The sheer selection of goods and services needed by the public sector ensures that there will be tender opportunities suited to nearly every business. Read more…

A lot of people own , and I just noticed that Vanguard made an that they will be making some changes:

• The international equity weighting will be increased to 30% of the overall stock portion fund, up from about 20%.
• Three of the funds (European Stock Index, Pacific Stock Index, and Emerging Markets Stock Index) will be replaced by a single fund, Vanguard Total International Stock Index Fund.
• The Total International Stock Index Fund itself is making some changes. Its benchmark index will switch to the MSCI All Country World ex USA Investable Market Index, which differs from the previous index by adding exposure to Canada and Israel, as well as adding a ~13% allocation to small-cap companies.

All of these changes sound good to me, even if it is another example of Vanguard following the herd. The very first target retirement funds had no exposure to Emerging Markets. Emerging got hot, and then Vanguard added to their funds. Investors have been increasing their international exposure as well recently, and 20% was and starting to look old-fashioned.

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THE Government inquiry into banking reforms will consider breaking up Britain’s largest high street banks to increase competition.

The Independent Commission on Banking (IBC) will look not only at whether to split investment and retail banking operations, but also radical options such as forcing the UK’s “too big to fail” banks to divest assets to address competition concerns.

It stressed the commission had not settled on any options at this stage, but chairman Sir John Vickers said “hard questions” needed to be asked.

The IBC – set up in June to look at financial stability and competition – said the financial crisis and subsequent merger of Lloyds and HBOS had reduced the number of players in the banking sector.

It added that current European Commission requirements for part-nationalised Lloyds and Royal Bank of Scotland (RBS) to offload branches and assets could “go further”.

One option would be for the Government to use its stakes in the taxpayer-backed banks to improve competition.

“Beyond that, and most radically, is the option of requiring the UK’s largest banks to divest assets with a view to creating a more competitive market structure,” according to the report.

Another central reform under consideration is the controversial issue of separating investment and retail banking operations.

Business Secretary Vince Cable has been vocal in his calls for “casino” banks to be hived off from retail deposits.

But banking giant HSBC and Standard Chartered have both recently warned such a move could prompt them to move their UK headquarters, sparking fears of a mass exodus.

Sir John, former chairman of the Office of Fair Trading, said: “Experience shows that the risks from not asking hard questions about financial stability and competition are far greater than from doing so.

“Questions about the structure of banking need to be debated in an open, rational way, and we would like to invite anyone with an interest to provide us with views and evidence.”

The IBC has until September next year to report back with its recommendations.

The IBC said some people have put forward the idea of “narrow banking”, which is a step further than the separation of retail and investment operations.

It would ensure retail deposits are 100% backed by government bonds and these banks would be immune from State bailouts, but they would only look after so-called utility services, such as transactions and deposit-taking.

The IBC said this option had “several challenges”. It will also consider limiting proprietary

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