Manufacturing Output Increases In Various Regions

By: Mike Campbell

The question is often posed; will this financial crisis become a double dip recession? Just when the markets start to look more optimistic and a few more people are finding work, a double dip recession would strike, wiping billions off global markets and sending millions of workers to join the dole queue. Those who warn of a double dip are concerned that the underlying, fundamental problems that triggered the last crisis have not been properly addressed and the recovery, such as it is, is all froth – stocks are becoming overvalued. Optimists have been fanning the dying embers of the world economy of the summer of 2007 for the slightest spark that might be nurtured into a flame of recovery. Certainly, any on-going recovery is, as yet, a weak one. Markets are demand (and confidence) driven. If demand is weak, manufacturing turns down, unemployment rises and markets fall. So the fact that America, the UK, China, the Eurozone and Japan are all reporting good figures for manufacturing output may mean that those desperate optimists are right after all.

In the UK, the purchasing manager’s index showed its best monthly growth since 1994. Figures from Germany produced its best month on month increase in manufacturing for a decade. The French figure was the best it has produced since 2006. Manufacturing growth across the Eurozone is picking up. Chinese manufacturing output is sharply up, triggering fears that the Bank of China may need to raise interest rates to relieve inflationary pressure. In Japan, a survey of the confidence levels of manufacturers is at its highest reading since September 2008. The world’s largest economy also saw a rise in manufacturing expansion. The USA’s manufacturing sector grew at its fastest rate in six years in March.

And on that up-beat note; Happy Easter everybody!