01/02/2013 World Business Report

Norodom Sihanouk. The monarch died of a heart attack in October last

year. He was revered for leading the country to independence from

France. Those are the latest headlines from BBC World News. Now

for the latest financial news with World Business Report. Is America's

recovery still on track? Global markets await job numbers for

January after a surprise contraction in the US economy at

the end of last year. Plus, staff at Spanish airline Iberia say

they'll strike over plans to cut up to 4,500 jobs. Bosses call the

shake-up a fight for survival. Welcome to World Business Report.

In a minute we'll have more on those looming job cuts at Spanish

airline Iberia. Until this week there was a sense of optimism

building about the improving health of the world's biggest economy. But

Wednesday's news that US GDP, gross domestic product, unexpectedly

shrank in the three months to December has been something of a

wake-up call. Official US employment figures, known as the

non-farm payroll, are always closely watched by global financial

markets but today's data for January is attracting far more

attention than usual. What are we expecting? Most economists

anticipate that employers will have added around 160,000 jobs in

January. That's not enough to make a significant dent on the

unemployment rate which currently stands at 7.8%. Michelle Fleury has

this report from New York. Lines at places like this are not

getting any shorter, more than 12 million Americans are out of work.

For those whose benefits and savings are running out, there is a

sense of urgency. US employers are hiring, but not fast enough. Make

no mistake there will be some real damage. With Washington locked in a

fight over spending and the budget, it looks like more trouble ahead.

Politicians will not get out of the way. We are going to have a

consolidation in the Budget in the first half of this year. That will

keep us growing slowly in the next quarter. Some manufacturers are

hiring, but the industry is losing its spark. If more Americans are to

find jobs they need have something to make. That is why the latest

government report on growth is so troubling. America's economic

recovery remains precarious as reflected in the latest consumer

confidence data. The message does not seem to have got through on

Wall Street, stocks are performing very strongly. Investors are

looking past the obstacles in the near term put forward by Washington

DC and seeing the resilience of the market economy. One example of that

resilience is America's housing market, which is finally recovering.

Once a trouble-spot for the US economy, it may be the source of

much-needed jobs and growth in the months ahead. Staff at Spanish

airline Iberia say they will go on strike over plans to cut up to

4,500 jobs and reduce salaries. Bosses and union representatives

have been in talks this week but they ended last night without

agreement despite a management offer to reduce the level of job

and salary cuts. Iberia lost well over $300 million last year amid

competition from low cost airlines and slumping passenger demand in

the recession-hit Spanish market. Parent company IAG, the

International Airlines Group, which was formed from Iberia's merger

with British Airways says it is in a fight for survival. John

Strickland is an aviation industry consultant. In light of those

numbers, were you surprised by the quite harsh objectives are being

put on the table by Iberia to its unions? Spain is one of the most

difficult markets in Europe. We have seen low-cost airlines cut

capacity in Spain. There was a need to make radical changes. British

Airways is profitable, it is a company that has been through its

share of pain over the last couple of beers. I was not surprised that

management said they had to make those changes. Were you surprised

that the unions rejected these reduced demands to cut less jobs?

We are facing another strike. not. Iberia has been insulated in

the past. It has not had to face up to its problems. However, a weak

market has worsened things. There can be a sense of disbelief. We

have seen the pilots' union, they feel under threat. They are very

unhappy about a low-cost subsidiary called Iberia Express. No-one wants

to change. No-one wants to see their terms and conditions change.

How much is this about that low- cost airline? It was hugely

controversial. How much is it about Iberia being a Spanish company?

mentioned Ryanair and easyJet is in big plays in Spain. -- being big

players. They have greater efficiency. Iberia cannot carry on

making loss-making for -- flights. As you say, there is a national

element to this as well. Emotions running high. We do not know when

the strike will happen, but we expect it later next month. Markets

in Asia are weighing up some disappointing data this morning

about China's vast manufacturing sector. The official Purchasing

Managers' Index, which gives an insight into factory activity, came

in weaker than expected in January although it still showed an

improvement. China reported a slowdown in its manufacturing

growth. The PMI fell in January. The HSBC index rose during January.

A bit of volatility. Analysts saying that sort of volatility is

fairly normal. These lacklustre numbers point to some of the

challenges China's new leader's face in sparing economic growth.

Manufacturing activity usually flows around the Chinese media. We

see that in February. -- Chinese New Year. There is a colder than

expected winter which will have an impact. That is having an impact on

the markets. We saw Hong Kong and South Korea also showing some

weakness. Thank you. America's biggest oil companies Exxon Mobil

and Chevron report results later. They're both expected to say

profits rose in the last three months of the year. On Thursday

European rival Shell said its annual profits fell some 14% last

year despite an improvement in the final quarter. The oil giants are

trying to chase growth amid flat market prices for crude oil and gas.

Shares in Japanese electronics firm Sharp are on the rise after reports

the company returned to profit in the last three months of last year.

The results would be a welcome boost for the struggling TV maker,

which warned in November it was worried about its future survival.

Once a titan of the electronics world Sharp has seen its fortunes

tumble in recent years as it struggles to compete with low cost

rivals from South Korea and China. Both Sharp and fellow television