Global Factory Activity Dropped In November

 Global Factory Activity Dropped In November

Global Factory Activity Dropped In November

During the month of November, factory output decreased on a global scale due to slow global demand and COVID-19 lockdowns introduced by China. If we look at Europe, the downturn slowed down, but in India, it actually picked up. So overall, the results were mixed, but the end result was a drop in global factory activity.

According to the surveys, the EuroZone factories still continue to be at risk of harsh winters. However, it will not be as bad as the markets were initially fearing. In addition, there are also signs that the inflationary pressure is disappearing slowly.

In fact, many believe that inflation has already peaked but let's not forget that prices have gone through a steep rise. In addition, the central banks also adopted a very aggressive policy that decreased consumer spending.

As a result of all this, global consumers had to cut back on their spending. So in a sense, we are now living in the stagflation era!

If we look elsewhere, the S&P Global index revealed that the PMI value was 47.1, which is also a sign of slow factory activity around the globe.

When we look at all of this data, it tells us that the manufacturing sector is now headed toward a recession in the winter season. But in the next few months, the outlook may improve a little!

Although the fundamentals are showing a little hope, it doesn't mean that Europe will be able to skip a mid-recession! According to a poll of economists, there is a 78% chance that the world will go through a recession in the next 12 months.

In the United Kingdom, manufacturing activity has also dropped for the 4th consecutive month due to weak demand, job cuts, and low confidence.

But if the Chinese economy fully opens up and Europe also manages to go through winter, there's a chance that the global factory activity may start to rise a little, showing signs of optimism.

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