Manufacturing Recession Goes Global as Demand Withers

[marmar]

Manufacturing Recession Goes Global as Demand Withers
by Wolf Richter • May 24, 2016


The “strong dollar” has been blamed for the manufacturing doldrums in the US that started over a year ago. But then manufacturing in other countries should boom, or at least not decline, but that’s not the case. Manufacturing is sick and weakening in just about every major economy!

References to 2009 and the Global Financial Crisis keep popping up in the latest spate of reports because that’s how bad it has gotten.

[font color="blue"]US manufacturing gets ugly.[/font]

On Monday, Markit reported that its US Manufacturing PMI, which tracks the overall health of the manufacturing sector via surveys sent to purchasing managers, dropped to 50.5 (below 50 = contraction) in May, the weakest reading since October 2009.

Production actually declined for the first time since September 2009, “the height of the Global Financial Crisis.” Companies blamed “reduced foreign demand” as new export orders fell for the second month in a row. And they blamed the “uncertainty around the general economic outlook” which had caused their customers “to delay spending decisions,” which then triggered production cuts.

Backlog of work fell for the fourth month in a row, at the same rate as in April, which had been a “post-recession record,” which means that companies “will be poised to cut capacity unless inflows of new work start to pick up again.” ..............(more)

http://wolfstreet.com/2016/05/24/manufacturing-recession-goes-global-as-demand-withers/

[Downwinder]

1. Demand follows income which follows wages.

[TonyPDX]

2. Yep. Too bad the rich mostly shop at CostCo

and after accumulating a few summer-homes, BMWs and box seats at the stadium, they don't circulate enough cash to keep their favorite businesses afloat.

The real drivers of the world economy are ordinary consumers, who are mostly invisible in this climate.

[Downwinder]

3. Henry Ford knew that mass production required

mass consumption. Supply side fails without a consumer side.

[StoneCarver]

8. Welcome to du

What's up,with the Costco dig? Costco pays their workers a decent wage and benifits. I love Costco! Take care of your workers, your workers take care of the customers, and the customers come back - rinse repete Wal-mart is the company that screws their workers!
Stonecarver

[TonyPDX]

9. I'm not digging at Costco-- I love employee-owned Costco!

My point is that the rich don't spread their spending around enough to keep money in circulation for the rest of us. They're raking in the cash so fast they can't count it and parking it off-shore. Meanwhile at home they shop in big-box stores-- you can only buy so many BMWs and boats. When small businesses are doing well (and incentives exist to expand), they hire people, who can then afford to buy a new car, go out to dinner, buy some new birkenstocks, etc., and we all benefit.

Costco's great. Having successful small businesses would help more of us.

[elleng]

4. Exactly,

WORLDWIDE!

[fasttense]

5. But I thought they could create demand?

You know the story about the computers. There was no demand for computers until Saint Gates or Jobs created the first at home computer.

What they forgot was that we had lots of extra income to buy things because women were demanding workplace equality.

[Downwinder]

6. Automated assembly lines, robots and kiosks

are not consumers. They don't buy products.

[Downwinder]

7. A study in 1965 showed that extra income

predominately went to food.