Many investors have held out hope that a rapid growth in manufacturing would speed the world economy out of its slump. Recent economic data has dashed these hopes. Global manufacturing has halted, and it appears that the West cannot rely on booming demand from Asia to dig it out of the crisis. The FT writes:
Across Asia, Europe and the US, surveys of purchasing managers produced the lowest readings of manufacturing activity and orders since mid-2009, when the world economy was only crawling out of the recession.The figures, better than feared in the US, gave little reason to think the world economy would quickly recover from the twin summer political crises of the US debt ceiling debate and the wider loss of confidence in sovereign debt from the peripheral Eurozone countries.
Asia’s vaunted export-oriented growth model has so far weathered the recession rather well — inflation, not unemployment, has been the number worrying Chinese policy-makers. The optimism, however, is not universal; HSBC now believes the country to be experiencing contraction. That may be an overstatement, but China does not seem to have what it takes to pull the world out of its slump.The list of potential economic saviors keeps getting shorter.