Put on warm winter clothes

There are few signs in the European and global economies that suggest that economic growth will improve in the foreseeable future. There are far more indicators that we are facing a potential recession at the global levels caused in large part by the trade wars being triggered by the Trump administration.

China’s economy and therefore its ability to rely on exports, is in serious trouble. Investment, retail sales, industrial production and trade are all in a funk. Even the Belt and Road strategy is beginning to suffer from a reality check as China finds that many of the ambitious investments are big money losers.

The slowdown in China has a sharp knock on effect in the rest of Asia, where economic growth and trade are in decline.

The US, for all its blustering, is rapidly being dragged into the slowdown as various sectors of the economy, particularly manufacturing, are impacted by the foolish tariff and sanctions strategies that are driving the country’s foreign policy.

The US Federal Reserve industrial production index indicates that manufacturing production also decreased during the first two quarters on 2019, suggesting the US may be headed for a recession.

What trade growth there is, can be attributed to growing increases in inventory ahead of newly announced tariff rates.

In Europe, the various think tanks are suggesting that Germany, the EU’s largest economy, could fall into a recession as data indicates that the third quarter will also have
negative growth.

The Munich-based forecasting house, the IFO, has cut Germany’s gross domestic product (GDP) forecasts for the rest of 2019 and the whole of 2020. The Eurozone, overall, is not managing to find much to be cheerful about.

Oddly enough, the UK, the world’s 5th largest economy is in better shape, Brexit madness or not. For the port sector this is not good news. Sailings are being dropped on the major trade routes, even with part of capacity out of service to get new scrubbers fitted.

Volume growth is declining, even as ships are getting bigger. All sectors are being impacted. The message is, time to tighten the belts and put on the warm winter clothes.