Transcript Lesson 3 Annual Report on American Economy I．Teaching Points

Lesson 3
Annual Report on American
Economy
I．Teaching Points:
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1. the annual report
2. the performances and problems of the
American economy in the past year
3. the prospects of American economy for the
new year
4. the terms: capital goods, business cycle,
unionized plants, the weak dollar
5. the difficult sentences in the text
II. Teaching Aim:
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1. understand what the annual report is
2. understand the performances and
problems of the American economy in the
past year
3. understand the prospects of American
economy for the new year
4. understand the terms in the text
5. understand the difficult sentences in the
text
III. Teaching Process
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1. Introduction to the Text
At the beginning of each year, Forbes(福布斯)，an
influential American business magazine, makes its
annual report on the American economy, examining
the performances and problems of the economy in
the past year and looking at its prospects for the
new year. This text is part of its 1995 annual report,
covering three sections of the economy: capital
goods, construction, and consumer nondurables.
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Capital goods industrials performed pretty well in
1994 despite the problems of pricing and rising raw
materials costs, and will probably repeat the
performance in 1995. In the construction industry,
nonresidential building will have potentials for further
development along with a continuing slide in
housing sector in 1995. But there are still hopes for
hosing sector. The general trends for consumer
nondurable industries will be a continuing increase
in spending by consumers and price hikes by
suppliers. Specifically, however, different industry
will be confronted with a different situation.
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2. Reading for gist
Read the text with about 15 minutes, and then try to answer
the following questions:
1．What problems are capital goods firms confronted with?
2．Why are capital goods firms so cautious as not to add new
capacity soon?
3．Which Sector of the construction industry will show a slide
this year? What makes this possible?
4．Is there any business opportunity for housing industry at
all? Why (not)?
5．How is it that nonresidential construction will have
potentials for further development?
6．How have the Federal Reserve’S recent efforts affected
non-durables industry in general?
7．How do nondurables companies cope with price hikes in
raw materials?
8．What are the pmspects for personal care，apparel，and
footwear companies respectively?
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3. Detailed Study of the Text
Capital Goods (See Note 1)
“We’re nervous,” says Frederick Stratton, chairman of Briggs
& Stratton, the $1.3 billion (sales) leader (the leader in sales, the
leading company in the volume of sales) in small gas engines
(engines that use gas as fuel) and auto locks (汽车锁 / 保险装置).
“We don’t know if (wether) this is the peak of the cycle (See Note
2), or a midpoint in the intermediate trend. We think it’ the
midpoint.” But Stratton acknowledges (admits) he could be wrong
and says his company, like many capital goods firms, won’t be
adding new (productive) capacity (at) any time soon. Why the
caution? (Why is there the caution? / Why do they have caution?)
The machine tool industry (机床制造业) reports its highest
bookings (business orders) since 1980 in the third quarter of
1994, and backlogs (n. business orders that have not yet been
filled or carried out. 尚未交货的订单) remain high.
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The problem is pricing (the setting of price, 定价, 价格变化).
Many companies operate well below full capacity and can’t raise
prices. “We can’t get big price increases.” reports William Jordan,
president of Duriron Co., which sells to the chemical industry (sell
to..., sell sth. to..., sell products to the chemical industry ).
Echoing Jordan (agreeing with Jordan), Parker Hannifin Chief
Executive Duane Collins says his sales increase last year was
due more to new orders than to price increases.
Weak pricing (价格疲软，价格行情疲软) creates anxiety because
raw materials costs are rising. Tecumseh Products is a big user
of commodities like aluminium; prices for these inputs (costs /
materials inputs) rose sharply in 1994.
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Given (Even there are) rising prices and rising raw materials
costs, margins held up remarkably well (profits were pretty goods,
hold up: keep, go on, continue) last year. Many outfits
(equipment needed for production) can absorb suppliers’ price
hikes (accept and endure suppliers' price increase without raising
the prices of one's own products), thanks to strong productivity
improvements (because productivity has been greatly increased
by a lot of newly-improved machinery and equipment, which
reduces production cost. This is why these outfits can absorb
suppliers' price hikes.) in recent years.
Will the companies be able to repeat 1994’s performance in
1995? There are reasons for optimism. The weak dollar (See
note 5) helps international companies boost (increase, expand
greatly) overseas sales, particularly in Asia.
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There are victories on the labor front (aspect / respect / point),
too. Caterpillar’s strike by the United Auto Workers hasn’t cut into
earnings (affect or reduce the amount of income earned by a
firm). Briggs & Stratton is shifting jobs from (changing jobs of)
unionized plants (See note 3) in the North and will open three
nonunion plants in the South, where productivity is higher.
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Likely winners in 1995 will be companies supplying the strong
auto market and the diversifying aerospace business. But watch
out for (watch out for: be cautious, keep close eyes on...) firms
that sell to weak industries (市场疲软的行业) like oil and
residential construction---respectively.
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Construction
Like a runner in a relay race (a race in which each member of a
team runs, swims or otherwise covers a certain part of the
distance, 接力赛), the construction industry hopes to smoothly
pass the baton from the already slowing housing sector to
nonresidential building in 1995 (move from the housing sector to
nonresidential construction for continuing growth, like passing the
baton<接力棒> in a relay race of running). If things work out this
way, Robert Murray, chief economist with McGraw-Hill’s F. W.
Dodge construction information unit, expects overall spending on
construction to continue its three-year-long recovery, climbing 3%
this year, to $294 billion. Spending on hotels, highways, factories
and prisons will pick up the slack (will recover from the dull state
of business) as single-family housing slows.
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Housing, interest-sensitive as always, began to cool in late fall,
as mortgage rate (See note 4) increases began to influence
demand. Housing starts (start: n. starting point, the beginning of
doing sth., so, housing starts: 住房动工) were still expected to
finish the year up 11%, to 1.43 million homes, according to the
National Association of Homebuilders. This year will almost
certainly show a slide. How severe (great, tremendous) a slide?
That depends on Alan Greenspan (That depends on what action
Alan Greenspan will take. See note 6 for more information), but
even he doesn’t know for sure (for sure: adv.确实, certainly,
surely) where interest rates are heading (heading for
somewhere).
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Not everyone has given up on housing, however. Donaldson, Lufkin &
Jenrette housing analyst Barbara Allen reasons (deduced) that despite
the rise in interest rates the more affluent (rich) part of the population
will trade up to larger houses (Am.E, will buy larger houses at higher
prices) or build extensions (extending part to a house) on current ones,
so long as the economy remains strong. “One of the major myths (a
belief, opinion or story that is not based on the fact or reality) that Wall
Street (n.华尔街) holds about empty nesters (people who live in large,
empty houses) is that they move down in house size and price points
(they will move according to the house size and price points, especially
move to the small size, cheaper houses),” Allen says. “House size
corresponds with (is in line with) income, not with the number of people
living in the house.” Allen thinks spending on repair and remodeling
(reconstructing, rebuilding) may soon surpass (exceed, outpace)
spending on new home construction. She sees (notices) buying
opportunities (the good opportunities for buying something) in
diversified (all kinds of) home builders (住房建筑公司) like Centex, Pulte
and Lennar, whose shares have all been hammered (beaten) lately
(recently). She also has high hopes for building materials companies
(建材公司) like Owens-Corning, USG Corp. and Mueller, a maker of
copper and brass fittings (黄铜配件).
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But interest rate rises seem to pose less of a threat to
nonresidential construction than to residential (form a threat to
residential construction rather than to nonresidential
construction). Reason: As long as corporate profits remain strong,
businesses will build factories. Nonresidential construction is less
interest-rate sensitive than housing but (and is) more corporateprofits related.” There’s been a big pickup (acceleration) in
pricing for ( in pricing for: 在为...定价方面) chemicals and paper
but little in the way of new capacity (but little pickup / acceleration
in the aspect / use of a new capacity),” observes Carey
Callaghan, an engineering and construction analyst at Lehman
Brothers. “Typically, three years into a recovery (typically, if there
is a three-year-long recovery...) you would see a pickup in
industrial construction, and ("and" here means "but") we haven’t
seen it yet.”
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That would be good news for engineering giants Fluor and Foster
Wheeler. Both should benefit from an uptick (benefit from an
increase) in domestic chemical and paper construction (the
construction of chemical and paper factories), with even better
prospects overseas. Smith Barney recently reported that
worldwide demand for new power-generating capacity (the
capacity of generating power, 新的发电能力) could top $1 trillion
(trillion, 兆) over the next decade. Half of that new demand is
coming from Asian countries. (In fact,) There’s more (demands)
to that (nonresidential construction) than wishful thinking (痴心妄
想). Foster Wheeler has $1.2 billion worth (value) of bids (an
offer of the price at which one---the bidder agrees to supply
goods or undertake a construction project, 投标) outstanding
(unsettled / unpaid) for boiler (boiler: n. 锅炉，烧水器) orders in
China alone.
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That’s also good news for cement and
aggregates firms (水泥和混凝料公司) like
Hanson, Vulcam Materials, Lafarge and
Southdown, which are pushing through
(stimulating) price increases for the first time
in years (第一次在数年内促进了价格的上涨 /
上升), thanks to increased worldwide demand.
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Consumer Nondurables
Despite the Federal Reserve governors' efforts throughout 1994
to cool the economy (to cool the overheated economy ),
unemployment remains low and consumer spending high.
Spending on nondurables—everything from soap flakes (肥皂块，
香皂块) to razors to tennis shoes—rose 3% last year. That was
the first year that spending on consumer nondurables kept pace
with (were in line with) the rise in income. And both (spending
and income, ------but spending largely depends on the perfect
insurance system, ------China and America as two typical
examples) are expected to increase this year at the same rate.
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Higher raw materials costs are forcing many producers to raise
prices. Clorox, for instance, which has 67% of the liquid bleach
market (漂白剂市场), recently announced a 6 % price hike (price
increase). Procter & Gamble just raised prices on its paper
products by as much as 8% . Those firms with a dominant
market share (with an overwhelming market share) should have
an easy time (have an easy / a hard time doing something)
holding on to (remain, keep) those price increases. But privatelabel companies (private-owned companies) that depend on low
costs to keep their own prices low will certainly have a tougher
time (have a tough / difficult / hard time).
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Rather than slap new stickers (n. 1.不干胶标签；不干胶贴纸; 2.
不屈不挠的人, 滞销物,滞销货) on old products (stick new pricelabels or price-tags on old product, that is, increase the prices of
old products), shaving giant Gillette (修面业巨头吉利 / 吉列公司)
is introducing a higher-priced product within an existing category.
The company just launched (started to produce and sell) its
Sensor Excel razor in the U.S. at a 20% premium (at a 20%
additional value) over its hugely successful ($201 million 1994
US sales) Sensor. Sensor already has a 23% share of the wet
shaving (a type of shaving) and blade market (剃须刀片市场)in
the U. S.; the new razor could add another four points of share.
Gillette earns 33% on shareholders' equity (The 33% Gillete
earns on shareholders' equity is the return on equity, 股东产权盈
利), making it one of the country's most profitable companies.
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U.S. personal care (personal care: n. The occupation of
attending to the physical needs of people who are disabled or
otherwise unable to take care of themselves, including tasks
such as bathing, management of bodily functions, and cooking.
人身护理. 一种职业，出于那些残疾人或无法料理他们自己的人的
身体需要而照顾他们，包括这些任务，如洗澡、处理身体功能和
烹调等) and consumer product companies are busily expanding
overseas—particularly in Asia. In China, Avon is pumping up its
sales force (is strengthening its team of people for sales), Gillette
has started making toothbrushes, and P & G signed more joint
ventures. Duracell is building plants in China and India, which
should come on line ("which" refers to the plants. They are
expected to become ready for use this year.) this year. And
Colgate bought India's largest toothbrush company, giving it
three-quarters of that potentially huge market (making it have
three-quarters market shares...giving it three-quarters market
shares of that market which is potentially huge).
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The news was mixed (There were good news and bad news) last
year for apparel manufacturers (clothing manufacturers). The
absence of a strong fashion trend put women's apparel in the
doldrums (make the business of women's apparel a dull, inactive
business. put sb. in the doldrums: put sb in low spirits. 由于缺乏
一股强劲鲜明的时装趋势，女装业十分不景气). Liz Claiborne, for
example, showed a 34.8% earnings decline for the latest 12
months. Market expansion overseas is still difficult for U.S.
apparel firms, given the fragmented boutique environment
abroad (1. with the situation in which shops selling their clothes
are scattering here and there abroad. 2. fragmented:
scattered; 3. environment: situation; 4. boutique: n. a small shop
selling clothes, costumes, hats of the latest fashion. 5. Compare:
"Given your scenario" <lesson 2>: supposing things are like what
you describe; "Given (Even there are) rising prices and rising raw
materials costs"<lesson 3> ).
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U.S. apparel companies continue to try to capture
some of the retail margin for themselves (obtain,
earn some profits from selling to Americans by retail).
Jones Apparel, for example, opened 40 outlet stores
(outlet stores: 分店, 销售点) in 1994 and has another
50 slated for this year (1. has decided to open
another 50 outlet stores this year. 2. slate: Am.
colloquial. propose sb. for an office, a position, and
so on. Here it means: to be opened, or decided to
open).
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In footwear (n. <美>鞋类<鞋,靴,拖鞋等>), Nike and Reebok both
made comebacks (comeback: n. recovery, become better), with
latest 12 months' return on equity (return on equity <股东资产净
值盈利>, that is, return on investment <投资报酬率>) of 17.2%
and 29. 3% , respectively. Both companies have been exploiting
(developing, using) the $ 600 million outdoor footwear market (户
外/室外运动鞋/鞋类市场). And while the athletic footwear makers
(运动鞋制造商) expect big growth from foreign expansion, they
are still finding ways to (the phrase: find ways to do something)
increase sales in the U. S. Smith Barney senior analyst (首席分
析家, compare: chief economist) Faye Landes figures (believes,
thinks, predicts) Nike and Reebok could grow up to 12 %
annually, 5 % in the U.S. alone , over (in / within) the next few
years.
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In the textile industry (纺织工业), higher costs for
raw materials like cotton (up 20% last year) and
slow sales of women's clothing have hurt some of
the smaller mills (smaller factories). Many more mills,
which depend heavily on the auto and household
sectors (which depend heavily on the sales /
performance of auto and houses / residential
buildings ), will face tougher times if higher interest
rates choke off (choke off: <colloquial> make sth.
difficult, or put an end to sth.) sales of cars and
homes (How can higher interest rates choke off cars
and homes? Recall the fact that most Americans
buy cars and homes with a mortgage. ).
Homework
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1. Exercise II, V.
2. Annual Report Writing: According to the functions and
structure of "annual report on one nation's economy", try to write
an annual report on Chinese economy in which you examine the
performances and problems of Chinese economy in 2006 and
kook at its prospects for 2007. You can write this annual report as
the author of the text does, and you can express your ideas on
the following aspects: capital goods, construction (residential and
nonresidential construction), consumer nondurables, direct and
indirect domestic investment, direct foreign investment,
consumption, international trade (export and import), domestic
trade (e.g., prices of products), visible and invisible trade (such
as transportation, tourism...), employment......