Economy

The writer, author of ‘Red Flags: Why Xi’s China is in Jeopardy’, is a research associate at the University of Oxford’s China CentreStrictly speaking, a country that has one of the fastest ageing populations on earth and a slump in fertility should be running into labour shortages, especially among younger age cohorts. Yet China has just reported that youth unemployment reached a record 21.3 per cent in June, with some speculating that inactivity may be far higher. Finding work for the young is of paramount importance — youth unemployment is socially corrosive as well as a blight on the economy.Since 2021, a social phenomenon known as tang ping, or lying flat, has taken root among young Chinese. It is essentially about disillusionment and doing whatever it takes to simply get by in the face of a weak economy, low social mobility and the dearth of good jobs. Now a new term, bai lan, translated as “let it rot”, is popular among the young. It conveys a deeper sense of pessimism, and of not striving at all.With good jobs in short supply and stiff labour market competition in a weak economy, increasing numbers of younger people are reported to have also become full-time children, staying at home to work for and be paid for by their parents.The biggest problem for out of work young people, however, is the risk of what economists call “hysteresis”. This is the danger that the longer they stay out of the formal labour market, the greater the difficulty becomes of ever getting back into it as skills and experience atrophy.Even allowing for the fact that China’s youth unemployment rate would be a bit lower if International Labour Organization definitions applied, a worrisome pattern has emerged in the five years since national data were first published. There is an annual cycle operating in which the unemployment rate rises into the summer when graduates flood the labour market and then ebbs in the second half of the year, but every year has seen a ratcheting up of unemployment rates throughout.The problem in China is acute for three reasons. First, the young are significant consumers, contributing as much as a fifth of spending in urban areas, according to a report by Goldman Sachs. Taken together with their slightly older peers, those under 35 account for over three-fifths of luxury goods spending. Weak consumption in China is certainly more complex than just rising youth unemployment but there is a link.Second, a marked change in the occupational structure of jobs has meant that the proportion of low pay, low skill, informal sector jobs has been rising at the expense of higher paid, high skill jobs in manufacturing and construction. According to Stanford University professor Scott Rozelle, the ratio of informal to formal sector jobs 15 years ago was 40:60, but has now flipped. This is a particular problem for younger workers who are over-represented in low pay sectors and the gig economy.Third comes three sets of mismatches. There is a mismatch of skills between those that many graduates acquire and those that employers, especially in engineering, finance and manufacturing, demand. Job and salary expectations, especially on the part of highly educated graduates, are unrealistic. There is also, importantly, a lack of aggregate demand reflecting the official focus on supply side policies and increasingly apparent shortcomings in China’s economic development model with its emphasis on state enterprises.With another 11-12mn graduates coming on to the market this summer, China watchers will be paying close attention to the unemployment numbers — and to economic decisions expected from the Politburo.Talk of stimulus is in the air, underscored by weak second quarter numbers. But the traditional remedies of credit creation, rural revitalisation and infrastructure programmes have been limited because of severe financing and debt difficulties for the local and provincial governments charged with implementing them. Chinese economists have become more vocal in urging their government to adopt measures to boost consumption.Ultimately, youth unemployment in China may not be resolvable until the national development model gets a makeover: service industries need to be expanded and opened up, and the government needs to embrace enthusiastically income redistribution and social security, education and tax reforms with a switch in strategy priorities back to the private sector. These require a formidable political transformation.Earlier this year, the Communist Youth League urged young Chinese to “take off their suits, roll up their sleeves, and go to the farmland” but the young seem to be hoping for something different. More

Deposits at large U.S. banks fell by $78.7 billion to $17.289 trillion from a week earlier, on a seasonally adjusted basis.Commercial bank lending inched up by $2.10B to a seasonally adjusted $12.093T during the week, the Fed data showed.Residential real estate lending increased $8.2B, commercial real estate loans fell by $2.00B, while consumer loans were down $2.1B from the prior week. Commercial and industrial loans slipped by $2.1B from a week ago on a seasonally adjusted basis. More

(Reuters) -New Jersey sued the Biden administration on Friday seeking to block New York City’s plan to impose tolls on vehicles in Manhattan to fight congestion and pay for mass transit, saying it was unfair to residents of the neighboring state.The city aims as early as next year to charge a daily toll of up to $23 on vehicles in central Manhattan between 60th Street in Midtown and Battery Park on the southern tip. In its lawsuit in U.S. District Court in Newark, New Jersey said the federal highway administration’s environmental review of the plan was inadequate. The body also ignored the financial and environmental burdens on New Jersey residents, it said. Tens of thousands of drivers commute from New Jersey to Manhattan for work. New Jersey said it would suffer because some drivers would reroute into the state to avoid the toll and it would not receive money from New Yorkers who enter New Jersey. “New Jersey will bear much of the burden of this congestion pricing scheme—in terms of environmental, financial, and human impacts—but receive none of its benefits,” the lawsuit said.New York City, which has the most congested traffic of any U.S. city, would become the first major city in the U.S. to follow London, which implemented a similar charge in 2003.In 2022, New York said the charge would cut traffic, improve air quality and increase transit use by 1% to 2%. The toll would generate $1 billion to $1.5 billion a year and support $15 billion in debt financing for mass transit improvement.”As any one in New Jersey knows, if you screw Jersey, buckle up. We’re not backing down,” New Jersey Democratic Representative Josh Gottheimer said. New York Governor Kathy Hochul said the plan was crucial to reduce congestion in New York City and said most New Jersey residents commuting to New York City use public transportation and would benefit from better mass transit. The federal highway administration declined to comment. More

NEW YORK (Reuters) – A feared liquidity drainage in the U.S. banking system as the Treasury refills its coffers has not materialised yet, on the contrary reserves increased recently, assuaging some concerns the bond spree could lead to further credit tightening. The U.S. Treasury started rebuilding its account through T-bills after the government’s debt ceiling was suspended last month. Since early June, the Treasury General Account at the Fed has increased by about $460 billion.Generally, an increase in government borrowing coincides with a decline in demand for the Fed’s overnight reverse repo facility (ON RRP), through which money market funds lend to the Fed, or with a drop in bank reserves parked at the central bank.When banks absorb the new debt issuance they have less money to lend – a scenario which had some investors worried given ongoing fears of excessive credit tightening amid higher interest rates.Federal Reserve data this week, however, showed that in the week ending on July 19 reserves increased by about $58.5 billion to $3.22 trillion, while demand for the ON RRP facility declined by $87.3 billion.”The risk of reserve scarcity in the near-term has receded as more cash has left the RRP facility,” said Gennadiy Goldberg, Head of US Rates Strategy at TD Securities USA.”We’ll be watching balance sheet runoff in the next several months to see if that materially changes, but I think the risk has declined as things stand now,” he added.Demand for the Fed’s ON RRP has been declining steadily from $2.3 trillion at the end of May to $1.7 trillion as of Friday.”At the end of May, we had expected more of the drain to come out of bank reserves, as we expected money market funds to keep their money in ON RRP due to still-hawkish Fed messaging at the June FOMC (Federal Open Market Committee) meeting,” Citi analysts said in a note this week.”However, money market funds shifted their allocation out of the RRP facility into outright purchases of T-bills and private repo markets,” they said.Fed officials increasingly track the combined total of reserve and ON RRP balances to get a fuller picture of sector liquidity as they proceed with reducing the central bank’s bond holdings at a targeted rate of nearly $100 billion a month. Together they now total $5.3 trillion, the lowest in about two years and down by $700 billion since April with most of that drop coming from ON RRPs, but Fed officials do not yet sense it is threatening reserve scarcity.Going forward, Citi analysts said they expected the ON RRP to continue declining, although at a smaller pace as the Treasury’s financing operations are expected to lose some steam. More

The Acropolis has stood above the city of Athens for centuries, its ancient walls and pillars withstanding war, siege and conquest. But as temperatures crested 40C across southern Europe this month, Greece’s top tourist attraction briefly fell victim to extreme heat. Officials shut the site for several hours during the hottest parts of the day, after holidaymakers queueing to enter required medical attention.The Cerberus heatwave — named after the three-headed dog who guarded the gates to hell in Greek mythology — has shone a spotlight on just how vulnerable the Mediterranean’s huge tourism industry is to the heatwaves that are becoming increasingly common in Europe. But the economic impact of what experts warn could be a new era of record-breaking heat goes far beyond tourism. Industries ranging from construction, to manufacturing, agriculture, transport and insurance are all bracing for changes to the way they do business as high-temperature days become more routine because of climate change. A visitor cools off at the Acropolis hill during this month’s heatwave in Athens. The economic impact of what experts warn could be a new era of record-breaking heat goes far beyond tourism © Louiza Vradi/ReutersScientists are clear that extreme weather events, including heatwaves, will become more frequent and intense with every fraction of a degree of warming. In July, with average temperatures already at least 1.1C hotter globally than pre-industrial levels, swaths of the US, Europe and Asia sweltered under “heat domes.” Record highs were reached from China to Italy. Business leaders and policymakers are now counting the cost of shuttered companies and decreased productivity. A study published by academics at Dartmouth last year found that heatwaves, brought on by human-caused climate change, cost the global economy an estimated $16tn over a 21-year period from the 1990s.Extreme heat is “pulling down our growth,” says Kathy Baughman McLeod, director of the Adrienne Arsht-Rockefeller Foundation Resilience Center at the Atlantic Council, and “dragging down our economies . . . the runways are buckling, metros are closing, restaurants have to shut down because the kitchen staff are too hot.”But those costs are likely to spiral in coming decades as economies reorient themselves for peak seasons of ever more extreme heat, to mitigate against the risks and disruption they will bring. “Extreme heat is one of the very serious consequences of climate change,” says Dan Jørgensen, Denmark’s climate minister. “The very tragic news is that this is probably only going to get worse.”Too hot to workOne of the main reasons that extreme heat poses an economic threat is because it makes it harder to work. High temperatures go hand in hand with low productivity.In hot conditions, human beings typically “work slower, we take on more risk, our cognitive function decreases”, says Laura Kent of the Institution of Mechanical Engineers, a professional association which recently produced a report on how industry will need to adapt to extreme heat. A study by the International Labour Organization, the UN agency for workers, projected that by 2030, the equivalent of more than 2 per cent of total working hours worldwide would be lost every year, either because it is too hot to work or because workers have to work at a slower pace. Around 200mn people in cities today are at risk from extreme heat, a number that is expected to grow eightfold by 2050, according to Sachin Boite, director of climate resilience at the C40 network of mayors pushing for environmental action.Yet few countries have a maximum temperature for when work must stop. In the UK, for example, where extreme heat has not historically been a problem, there is only a recommended threshold for stopping work in cold, not hot, temperatures.The poorest and least able to cope are often hit hardest by extreme heat — with productivity losses often concentrated in jobs where wages tend to be lower than average. Travellers at Liverpool Street railway station during a heatwave in London earlier this month. Few countries have a maximum temperature for when work must stop © Jose Sarmento Matos/BloombergOutdoor workers — especially those in agriculture or construction — are particularly at risk of death, injuries, sickness and reduced productivity because of heat exposure, according to the ILO. Between 1992 and 2016, 285 construction workers in the US died from heat-related causes, about a third of all the country’s occupational deaths from heat exposure, according to academic research.But those working inside are at increasing risk as intense heatwaves become more frequent, including the world’s 66mn textile workers, who often work inside factories and workshops without air conditioning. Many are situated in the global south, where peak temperatures are even more extreme and dangerous. After British Columbia in Canada suffered a devastating heatwave in 2021, heat-related workplace injuries requiring compensation increased by 180 per cent when compared to the previous three-year average, according to research. More than a third of those came from indoor workers, compared to 20 per cent on average. The impact of extreme heat on workers has become “an issue of human rights,” says Italy-based environmental economist Shouro Dasgupta, and one that calls for stronger labour protection policies. “The right to a safe and healthy working environment is a human right [that] is being eroded,” he adds. “Governments will need to step in.”Sectors at riskBeyond the consequences of extreme heat on their employees, industries are being forced to rethink more existential issues, such as where their businesses are based and how they operate.The construction industry is one area that might require a radical reinvention, says Daisie Rees-Evans, who works on policy at the Chartered Institute of Building, a professional body.“Not only do extreme weather conditions impact construction work on sites but it actually impacts material,” she says. Steel can warp in hot conditions, while concrete becomes difficult to work with and sets much more quickly — leaving it more prone to cracking and affecting its strength and durability. There is also the risk concrete will spoil before it can be poured. All of this adds up to additional costs for the sector, says Rees-Evans. Companies faced with having to reorder materials such as steel that warped often find themselves battling with other companies who also need to repurchase goods, driving up prices in the process.Any delays to projects can also come with additional costs, including fines levied for exceeding the agreed completion date, she adds. Manufacturing is another sector that faces significant changes. Factories and warehouses “are just not designed for the temperatures we are seeing now and expected to see,” says Kent of the mechanical engineers’ association. Along the Rhine, one of Europe’s most important waterways, companies have faced disruptions due to low water levels for three out of the past five years © Wolfgang Rattay/ReutersThis means that equipment might not work as effectively or wears out more quickly, which comes with higher operational costs. “A vast majority of our industry rely on some sort of heating or cooling process,” she says. “If you are heating or need to cool down to a certain temperature and the ambient temperature is already hotter, that difference is harder to overcome.” At the same time, the availability of water can come under intense pressure during periods of higher heat — a huge problem for the industrial sector, which needs water for functions from cooling and transportation. Along the Rhine, one of Europe’s most important waterways, companies have faced disruptions due to low water levels for three out of the past five years, including in 2018 when barges struggled to travel, hitting fuel and chemical supplies. “For the longest time, we have put industries next to rivers,” says Johanna Lehne, programme lead at climate consultancy E3G, but companies are now faced with questions about where they should be based and what they are able to produce. Then there is the risk to infrastructure. Heat stress is “going to shorten lifespans”, says David Carlin of the UN Environment Programme Finance Initiative. That affects everything from train tracks to roads and airports. “Not only do you have potential infrastructural damages like bridge collapses, but you also have the need to replace these things faster, which is increasing costs.”For agriculture, extreme heat can result in decreasing crop yields, fuelling rising prices and food insecurity in the process. Research from Arsht-Rock found corn, the most widely produced US crop, is losing about $720mn in revenue annually because of extreme heat, which will increase to a projected $1.7bn by 2030. As work becomes riskier in a range of sectors, insurance costs will rise. Climate change “will significantly shape how the sector will choose to manage and absorb risks,” says Mohammad Khan, general insurance leader for consultancy PwC’s UK arm.According to data from reinsurer Swiss Re, heat-related catastrophe losses for insurers, such as crop failures from drought or wildfire damage to properties, amounted to $46.4bn in the five years to 2022, up from $29.4bn in the previous five years.In California, one of the areas most affected by wildfires, some big US insurers have pulled back. Allstate cited the growing bill from wildfires as among the reasons it paused selling new home insurance policies in California last year. State Farm, another big home insurer, warned of “rapidly growing catastrophe exposure” when it did the same earlier this year.That has fed a growing debate about the affordability of insurance for both individuals and companies as climate change effects intensify, with more people falling into public safety nets. Adapting for changeA couple of generations down the line, humans will have to find new ways to adapt their societies as temperatures rise ever higher.Climate pledges made by countries put the world on track for temperature rises of between 2.4C and 2.6C by 2100. This is far ahead of the 1.5C threshold after which scientists have warned of potentially irreversible changes to the planet and devastating consequences for citizens. “This [extreme heat] is not going to go away anytime soon. It’s going to be more frequent, it’s going to be more intense, it’s going to be longer as well,” says Carolina Cecilio, policy adviser at E3G. Some countries are waking up to the issue. Greece appointed its first chief heat officer in 2021, while Spain said earlier this year it would ban outdoor work during periods of extreme heat.A local resident fights a forest fire with a shovel during a wildfire in Tabara, north-west Spain. The country said earlier this year it would ban outdoor work during periods of extreme heat © Bernat Armangue/APCompanies are introducing measures such as using “misting” on animals and employees to keep cool. Others are switching working hours, trying to do more at night or during the early hours of the morning — although this can be met with objections from local governments and residents. As the world warms, so-called passive cooling is likely to become more important for economies, says Kent. Many of the materials that buildings and roads are made from — such as tar and concrete — absorb and retain energy from the sun’s rays, warming their surroundings, while factories and warehouses are often found in industrial parks that lack green spaces and allow heat to build up. Cost effective solutions included “cool roofs” that are painted white to reflect the heat, or adding shade through the use of “overhang” on buildings or increased tree cover.Rees-Evans says construction firms are starting to use AI to factor forecasted weather into a project’s running order. This would allow them, for example, to hold off ordering steel if they expected a prolonged period of hot weather was on the cards. People walk under ‘dry mist’ in the July heat in central Paris. Swaths of the US, Europe and Asia have sweltered under ‘heat domes’ © Apaydin Alain/ABACA/Reuters Internationally, adaptation is expected to be high on the agenda of the international COP28 climate negotiations. Politicians are increasingly looking at how money can be raised to help countries, especially those in the global south, deal with extreme temperatures because of climate change. But Baughman McLeod says businesses and policymakers needed to act now to prepare for extreme heat. A big rethink of our economies may be needed, she says, as countries that depend on tourism see visits plummet during peak seasons, or companies can no longer do business for key months of the year. “There is not a solution for every place, but there is a solution for every person.” More

The median forecast of 10 analysts see annual headline inflation at 4.77% in the first 15 days of the month, its lowest level since March 2021. Core inflation, which strips out volatile food and energy products, is forecast to have slid to 6.73% year-on-year, marking the eleventh consecutive fortnight of slowdown.Both still remain well above the central bank’s target of 3%, plus or minus 1 percentage point.Last month, Mexico’s central bank board members made the unanimous decision to hold its benchmark interest rate at 11.25% for the second time, and warned that it will be necessary to keep it at that level for a prolonged period of time for inflation to converge to its target.Banxico first paused its rate hikes in May after a nearly two-year hiking cycle that began in June 2021.In the first half of July, consumer prices were forecast to have risen 0.27% compared with the previous two-week period, while the core index likely rose 0.22%.Mexico’s statistics institute will release inflation data for the first half of July on Monday. (Report by Noé Torres; Editing by Marguerita Choy) More

Today’s top storiesUK public sector borrowing fell unexpectedly in June while retail sales grew much more than anticipated. Net public sector borrowing hit £18.5bn last month, £400mn lower than in the same month in 2022, according to data published by the Office for National Statistics on Friday. Walls close in on Western businesses in Russia as companies looking to get out are struggling with a dearth of buyers and hardening Kremlin attitudes.Rishi Sunak’s Conservative party lost two seats in big by-election defeats. The once-safe Tory seat of Selby and Ainsty in Yorkshire went to Labour while the Lib Dems won the south-western seat of Somerton and Frome.For up-to-the-minute news updates, visit our live blogGood evening.Heatwaves have dominated the news this week, with scorching temperatures across much of southern Europe and the US south. Scientists have blamed a specific jet stream pattern that creates a series of “heat domes” which in turn drive up temperatures.The fast-moving band of air has been locked for weeks in a pattern characterised by five large U-bend shapes scientists have called “wavenumber 5”.Long periods of extreme heat at or near 40C aren’t just a feature of our climate’s future, FT’s John Burn-Murdoch argues; they are already here.The south-western US state of Arizona has long been affected by very high temperatures but now it’s clear those very high temperatures are climbing. Between 1970 and 1990, an average of 16 people per year died from “exposure to excessive natural heat”. Between 1990 and 2015, the average rose to 38. In 2020, it was 210, and 257 in 2022.

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In his column John tries to explain why Phoenix in Arizona, where maximum temperatures have now exceeded 40C for 26 successive days, is America’s fastest growing big city.Meanwhile in Germany, efforts to build a future supply of energy based on renewables is, perhaps surprisingly, being led by German coal giant Leag, which is headquartered in the Lausitz city of Cottbus.All coal-fired power plants in Germany must be switched off by 2038, making the success of Leag’s transition towards renewables crucial for sustaining the livelihoods of its 7,000 workers.Fabian von Oesen, a civil engineer who has spent much of the past decade working on offshore wind, leads Leag’s renewables division. But environmental groups are sceptical about a coal company leading the energy transition, with one activist saying: “It’s like asking a villain to change course.”

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But Von Oesen and others hope this will help to secure future generations’ career prospects in the region that witnessed an exodus of talent after the fall of the Berlin Wall.In the UK, on the other hand, efforts to boost renewable energy have suffered a significant setback after one of the country’s biggest wind farm projects, Vattenfall’s Norfolk Boreas site, has been halted after costs surged 40%.Need to know: UK and Europe economyUK consumer confidence plummeted in July, according to research group GfK. The consumer confidence index, which measures how Britons view their personal finances and wider economic prospects, fell six points to minus 30 in July compared with the previous month.Turkey’s central bank lifted interest rates for a second consecutive month but the limited increase has prompted concerns that policymakers are prioritising growth over fighting inflation. After Wednesday’s gigafactory announcement from Tata Group, the UK’s business and trade secretary Kemi Badenoch writes in the FT that the UK can’t pick winners but it can help the car industry succeed.Need to know: Global economyRussia is pushing a plan to supply grain to Africa and cut Ukraine out of the global market after Moscow’s withdrawal this week from a UN-backed deal. The Kremlin warned earlier this week it would treat all grain ships heading to Ukraine’s ports as military targets, a threat the EU said demonstrated Moscow’s “barbarian attitude” as it attacks food supplies.China’s low-profile billionaires have come out in support of the Communist party’s efforts to restore private sector confidence as Beijing looks to reinvigorate the slowing post-pandemic recovery.For the first time since 2017, net inflows into ‘ex-China’ emerging markets were more than $41bn, exceeding those into mainland Chinese equities, according to Goldman Sachs data.Taylor Swift is the latest frontline in the ongoing war between Singapore and Hong Kong over leading financial hub status. The American singer, like Harry Styles and Coldplay, is performing in Singapore but skipping Hong Kong for next year’s international tour, which is being seen by many as a snub.Just weeks after it was accused of being infiltrated by China’s Communist party, the Asian Infrastructure Investment Bank, Beijing’s answer to the World Bank, has approved one of its highest-profile international partnerships. The proposal will issue $1bn in credit guarantees against sovereign-backed loans made by the World Bank’s lending arm, the International Bank for Reconstruction and Development.Need to know: businessMcDonald’s has overhauled its UK complaints procedures after sexual assault and bullying claims emerged in a BBC investigation published earlier this week.US cinema owners are hoping for box office success by cashing in on the meme-driven “Barbenheimer” phenomenon which has led to hundreds of thousands of film-goers buying tickets to see Barbie on the same day as Oppenheimer this weekend.FTX has sued its founder Sam Bankman-Fried in an effort to claw back more than $1bn allegedly misappropriated in the months leading up to the bankrupt cryptocurrency exchange’s collapse last year.The world’s largest contract chipmaker TSMC has warned that it expects its 2023 revenue to drop by 10 per cent as the AI boom fails to offset economic woes and China’s delayed recovery.Record profits have been forecast by low-cost airline EasyJet this summer thanks to high ticket prices and strong demand for travel but concerns have been raised over “unprecedented” air traffic control disruption.Science round-upThe FT revealed that the UK’s decision on rejoining the EU’s Horizon research programme would be delayed until the autumn.Eli Lilly’s new Alzheimer’s drug donanemab, which phase 3 trials showed could slow memory loss and cognitive decline, was hailed as a “watershed moment” in the fight against the disease.Farm robots like Harvard’s Wyss Institute’s “Robobees” — though yet to be tested outside the lab — could eventually perform tasks such as crop pollination and environmental monitoring. Microsoft, OpenAI and Cohere are experimenting with “synthetic data” to train their AI systems as they reach the limits of information created by humans. John Thornhill, the FT’s innovation editor, explores the promises of AI-assisted healthcare.How do machines learn? Pretty much the same way as humans: repeating a process and making adjustments after mistakes, to gradually improve outcomes. Here’s how they can be trained to recognise images. And here’s our explainer on the EU’s proposals for AI regulation.Something for the weekendTry your hand at the range of FT Weekend and daily cryptic crosswords.Some good newsFilip Cegar, an Aberdeen teenager who broke his back sledging at a golf course in the Bieldside area last December, has successfully climbed the 674 steps of the Eiffel Tower. After learning to walk again, he’s raised more than £4,000 for the Royal Aberdeen Children’s Hospital. More

HOUSTON (Reuters) -SLB on Friday flagged weakening North America oilfield activity even as the company topped analysts’ estimates for second quarter profit, helped by a rebound in offshore and international drilling.SLB, the largest oilfield service company and former Schlumberger (NYSE:SLB), joined rivals Halliburton (NYSE:HAL) and Baker Hughes in forecasting tepid North American activity, sending its shares down 3.3% to $55.30 in morning trading.North America revenue for the current quarter will be slightly down, Chief Executive Olivier Le Peuch said in a post-earnings conference call with analysts, saying activity in the region was moderating.However, the company expects third quarter revenue from international markets to grow by a mid-single digit percentage, citing a resurgence in offshore and Middle East drilling.In comparison, last quarter’s international revenue rose 21% to $6.3 billion and North America’s climbed 14% to $1.75 billion.Analysts at Tudor Pickering Holt noted that international revenue missed its estimate by $1 billion, while North America slightly topped its forecast. U.S. and Canadian producers have kept a tight rein on spending since the 2020 downturn.SLB continues to expect year-on-year revenue growth of more than 15% and adjusted earnings before interest, tax, depreciation and amortization to rise in the mid-20s.”The year is playing out largely how the company expected with a more muted outlook for North America and overall profit margins picking up in Q2 through pricing power, technology adoption, and strength in key international markets,” said Peter McNally, an analyst at research firm Third Bridge.The company reported net income excluding items of 72 cents per share for the three months ended June 30, compared with analysts’ average estimate of 71 cents per share, according to Refinitiv data.Revenue of $8.1 billion fell slightly below analysts’ estimate of $8.2 billion. More