Factory growth in Europe at its lowest level at the end of the third quarter

Export orders in European and Asian factories weakened, mainly due to the recent trade disputes between the United States and China. However, the growth was little changed in the Americas.

News and indications that the United States and Canada reached an agreement last Sunday to salvage the North American Free Trade Agreement (NAFTA) have led to the near-term disappearance of some of the risks in the global expectations. Nonetheless, some fear that the failure of Beijing and Washington to reach understandings and the unwillingness of both parties to make any concessions on tariffs will affect global economic growth, and that this may lead to a slowdown.

Manufacturing growth in the euro zone slowed to its lowest level in two years by the end of the third quarter of this year, according to the IHS Markit purchasing managers’ indices. Generally speaking, the picture of the industrial sector in Europe remains less buoyant in the third quarter due to the lack of strong signs of a strong economic outlook at the end of the year.

A slowdown in global trade and a steady increase in the possible trade war between China and the United States are weighing on the market and the manufacturing sector’s morale.

In Germany, manufacturing growth slowed to below the two-year low in September, grew at the slowest pace in 3 months in France and in Italy did not change for the first time in two years.

Perhaps the most logical reason for the slowdown in growth in the euro area is the weakness of export orders.

In Britain, factory activity fell unexpectedly in September, leading to a three-month halt in growth, just six months before the UK’s exit from the EU.

Asian Slow Rise

Two surveys conducted by China on Sunday pointed to a weakness in the manufacturing sector. A private opinion poll also showed that factory growth had stalled after 15 months of expansion, while an official government report said that manufacturing was starting to lose strength amid declining export orders.

The first major reading on China for September shows that the world’s second-largest economy continues to lose momentum with weak domestic demand and the impact of strong US tariffs. This is likely to push Beijing to take further measures to support growth in the coming months.

However, analysts do not expect more stimulus to encourage the stability of the Chinese economy until early next year at least.

Monday’s survey also showed that industry elsewhere in Asia also stumbled, especially in Vietnam, Taiwan and Indonesia last month, as Taiwan’s factories recorded the slowest pace in more than two years due to slow export orders.


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