Thanks in part to fears over Brexit but more so "faltering demand for exports amid the US-China trade dispute," eurozone factory productivity has fallen more quickly than ever in the last six years and the world is seeing a sharp drop in financial markets. The expectations of a surge of growth following the somewhat less-than-spectacular end to 2018 seem to be less realistic now than they were before, according to the Guardian. The Dow Jones Industrial closed on Friday down 1.8% and the FTSE 100 down 2.0%. Across the rest of Europe, markets did not fare well - Germany's manufacturing output recorded the steepest decline in seven years. According to the article, this is due to China's slowing economy and President Trump's import tariffs on Chinese goods. China is, of course, Germany's biggest export market for car manufacturers. The final note of the article is that the PMI index showed Germany and France as the two worst performers at the moment, with the rest of the eurozone growing well enough.
Article:
https://www.theguardian.com/business/2019/mar/22/eurozone-suffers-sharp-decline-manufacturing-activity
2 comments:
It would appear that the global economy is approaching a recession. Almost all developed countries have begun to slow down even the US. The US manufacturing and Services PMI both fell, but are still not bad. It also appears that global growth has begun to fall since 2018.
Brexit aside, the long-lasting impact of the United States trade dispute with China is continuing to show the larger scale impact it's having on the rest of the world. Now throw something like Brexit in the mix, and everyone appears to be slowing down as their hands are somewhat tied as they are unable to be as sure in their economic decision making (production levels, imports, exports.. etc) as they would be under more normal conditions.
Moving forward, I am interested to see where the rest of Europe is in a few months following Brexit and after our trade dispute with China has had more time to play out.
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