While the US economy seems to be gaining momentum mainly due to the developments in the services sector, China keep on falling down mainly due to the ongoing decline in industrial production. I mentioned the reasons why investors should be cautious about Asia in my previous article, and the Shanghai Composite Index is about 3% down since then. But in this article, I would like to point out some interesting developments which have taken place in Europe in February of 2016. Particularly, manufacturing PMIs for the "Big 5" economies, which are Germany EWG, France EWQ, the UK EWU, Italy EWI and Spain EWP, have got much closer to the contraction area as seen in the chart below. And the main questions now are: Will Europe pursue Asia? Or it is going to follow the US? The most curious thing here is that a few record lows have been recorded last month. As per Markit, UK Manufacturing PMI came in at 50.8 in February, which is the lowest mark since April of 2013. The main reasons mentioned in the survey are output slowdown in consumer and investment goods sectors as well as input cost deflationary pressure, which remains strong.
A few other interesting notes follow below: The breadth of the slowdown is especially worrisome. The domestic market is showing signs of weakening while export business continued to fall. A lot of this is driven by the ongoing weakness of global commodity prices. However, there are also signs that weaker growth is driving up competition between manufacturers to secure new business and among their suppliers too. The trend in staffing levels also registered a downward trajectory, with some job losses thrown in, and only the intermediate goods sub-sector showing signs of employing more staff. It appears the global slowdown is continuing to challenge markets and thought it may be too soon to envisage another financial downturn, the possibility will have crossed the minds of key-decision makers. Read more at Seeking Alpha
0 Comments
Leave a Reply. |
AboutB2BManufactures.com focuses on providing the e-business solutions to small and medium-sized enterprises, and helping them enhance international competitiveness in world arena. Archives
April 2024
Categories
All
|