Investing Curiouscatblog

Tag: Europe

  • Manufacturing Contracting Globally

    Global manufacturing recession continued in February. From the Institute for Supply Management, the USA is in the 13th consecutive month of contraction:

    Manufacturing contracted in February as the PMI registered 35.8 percent, which is 0.2 percentage point higher than the 35.6 percent reported in January. This is the 13th consecutive month of contraction in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

    Japanese Factory Output Posts Record Drop in January

    Japan says its industrial output plunged a record 10 percent in January, another sign the world’s second-largest economy is facing its worst economic recession since the end of World War II. January’s bad numbers break the previous record of 9.8 percent set just the month before.

    European Manufacturing Contracts at Record Pace

    A gauge of manufacturing activity declined to 33.5 from 34.4 in January, lower than an initial estimate of 33.6 published on Feb. 20. The index is based on a survey of purchasing managers by Markit Economics and a reading below 50 indicates contraction.
    …
    The manufacturing index for Germany, Europe’s largest economy, was at 32.1 in February, lower than the initially reported 32.2, according to a separate report. Italy’s dropped to 35 from 36.1 and the French gauge declined to 34.8 from 37.9, less than the initial estimate.
    …
    The International Monetary Fund predicts the euro area economy will contract 2 percent this year.

    In Korea, industrial output shark 26% in January, the largest decline even (statistics available since 1970). A one month period is not very significant but with a 26% decline that is still huge. And the December decline was 19%

    China appears to be slowing the least of any sizable manufacturer:

    The CLSA China Purchasing Managers Index, produced by U.K.-based research firm Markit Group Ltd., came in at 45.1 in February, compared with 42.2 in January. The index registered a record low of 40.9 in November. A PMI reading below 50 indicates contraction.

    It was the third straight month that the PMI came in higher than the month before, which provided some hope that China’s economy, which grew at its slowest pace in seven years in the fourth quarter of 2008, might be starting to stabilize. But economists are far from declaring an economic rebound.

    Related: Manufacturing Employment Data from 1979 to 2007 – Top 12 Manufacturing Countries in 2007 – The Economy is in Serious Trouble – Japanese Economy Shrinks 12.7% – USA Job Growth (2007)

  • Families Shouldn’t Finance Everyday Purchases on Credit

    Why the Germans just hate to spend, spend, spend

    “Millions of Americans,” croaked the US Treasury secretary, were being denied credit or facing rising credit card rates, “making it more expensive for families to finance everyday purchases”. The notion that families should finance everyday purchases on credit, the anchor commented, “suggests Washington has still to understand what brought us there in the first place”.
    …
    US, French and British officials puzzle over Germany’s refusal to tackle the recession head-on. German leaders, meanwhile, cannot see why their taxpayers’ money should go into encouraging precisely the kind of behaviour – reckless lending, careless borrowing and overconsumption – that precipitated the financial crisis.

    I am with the Germans on this one. The people that want to find some more credit cards to run up don’t understand the problem. Until they come up with strong policies that admit we have been living beyond our means for decades and have to pay for this at some point and fashion a policy based on that understanding we are in danger. Yes another credit card can allow you to continue to live beyond your means, but it also puts you into even worse financial shape than you have already gotten yourself into. It is not a solution, it is an emergency to deal with the complete failure of yourself previously and without a plan to change it is just setting yourself up for a worse situation soon.

    Related: How to Use Your Credit Card Responsibly – Have you Saved Your Emergency Fund Yet? – Can I Afford That? – Too Much Stuff

  • Manufacturing Employment Data – 1979 to 2007

    I have had difficulty finding good economic data on manufacturing jobs. I have posted about this previously but have trouble finding much worth posting about: Worldwide Manufacturing Job Data – Manufacturing Jobs. The Unites States Department of Labor, Bureau of Labor Statistics has published some interesting data and so here is a look at some of that data.

    The table shows average annual productivity gains (output per hour, in USA dollars – I think it is not clear) – the 2007 output totals are from the United Nations data I posted about last week (Data on Top Manufacturing Countries).

    Average Annual Manufacturing Productivity Gains by Country
    Country 1979-1990 1990-1995 1995-2000 2000-2007 1979-2007 2007 Output
    $USA billion
    Taiwan 6.1 4.7 5.6 6.4 5.9
    Korea NA 9.4 10.8 7.6 NA 241
    USA 2.8 3.7 5.6 4.6 3.9 1,831
    France 3.8 3.4 4.6 3.5 3.8 296
    Japan 3.8 3.3 3.4 3.8 3.6 926
    United Kingdom 4.1 2.8 2.7 3.9 3.6 342
    Germany 2.1 2.9 3.7 3.8 3.0 670
    Spain 3.3 3.1 0.8 2.1 2.5 208
    Canada 2.1 3.4 3.8 1.1 2.4 218
    Italy 3.4 3.8 1.4 -.2 2.2 345

    The countries that were part of the study but are not included in the table above: Australia, Belgium, Denmark, Netherlands, Norway, Sweden.

    Manufacturing productivity increased in 14 of 16 countries in 2007, according to the study. The United States of America increase of 4.1 was the fourth largest among the 16 economies and was slightly above the 3.9 percent U.S. average annual increase since 1979. 15 of the 16 countries increased manufacturing output in 2007.

    9 countries increased manufacturing hours worked in 2007, the USA increased 2.3% (below their average increase since 1979). Hours worked decreased for all countries in the period of 2000-2007 (UK has had the largest decrease 3.9% annual average decrease, the USA in next at 3.1%).

    Manufacturing employment increased in 10 countries in 2007. From 2000-2007 the USA has experienced average annual declines of 3% in manufacturing employment (the second sharpest drop to the UK which has fallen 4%). From 1979-2007 the USA annual declines averaged 1.2% (only Taiwan.9% and Spain .1% showed increases). From 2000-2007 four countries show slight average annual increases: Spain .5%, Korea .4%, Taiwan .2% and Italy .2%. From 2000-2007 only 3 countries showed annual average decreases in output: Canada -.3%, Italy -.2% and UK – .1%.

    Hourly manufacturing compensation has increased in all countries for the period 1979-2007 (data shown for this item is in each national currency: USA 4.6% average annual increases, Spain up 7.2% annually, Taiwan up 7%, UK 6.8%, Germany 4.4%, Japan 4.2%.

    via: Canada’s Manufacturing Crisis in International Perspective

    Related: posts on employment – Top 10 Manufacturing Countries 2006

  • Top 12 Manufacturing Countries in 2007

    The updated data from the United Nations on manufacturing output by country clearly shows the USA remains by far the largest manufacturer in the world. UN Data, in billions of current US dollars:

    Country 1990 1995 2000 2005 2006 2007
    USA 1,041 1,289 1,543 1,663 1,700 1,831
    China 143 299 484 734 891 1,106
    Japan 804 1,209 1.034 954 934 926
    Germany 438 517 392 566 595 670
    Russian Federation 211 104 73 222 281 362
    Italy 240 226 206 289 299 345
    United Kingdom 207 219 228 269 303 342
    France 224 259 190 249 248 296
    Korea 65 129 134 200 220 241
    Canada 92 100 129 177 195 218
    Spain 101 103 98 164 176 208
    Brazil 120 125 96 137 170 206
    Additional countries of interest – not the next largest
    India 50 59 67 118 135 167
    Mexico 50 55 107 122 136 144
    Indonesia 29 60 46 80 102 121
    Turkey 33 38 38 75 85 101

    The USA’s share of the manufacturing output of the countries that manufactured over $200 billion in 2007 (the 12 countries on the top of the chart above) in 1990 was 28%, 1995 28%, 2000 33%, 2005 30%, 2006 28%, 2007 27%. China’s share has grown from 4% in 1990, 1995 7%, 2000 11%, 2005 13%, 2006 15%, 2007 16%.

    Total manufacturing output in the USA was up 76% in 2007 from the 1990 level. Japan, the second largest manufacturer in 1990, and third today, has increased output 15% (the lowest of the top 12, France is next lowest at 32%) while China is up an amazing 673% (Korea is next at an increase of 271%).
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