Global Economy: Mapping the Global Economy: Factories Slow from US to Asia

Manufacturing from the United States to Asia is in a slowdown as factories continue to struggle with supply issues, labor shortages and high material costs.

A measure of U.S. manufacturing activity weakened in June to a two-year low, and several regional Federal Reserve surveys indicated that business activity had contracted. The gauges for purchasing managers at factories across Asia eased, with South Korea, Thailand and India among those showing the steepest declines, according to S&P Global.

Similar indices in Poland, Spain and Italy also showed weaker activity compared to May.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:



Consumer spending fell in May for the first time this year and previous months were revised down, suggesting the economy is on a somewhat weaker base than previously thought amid rapid inflation and Fed interest rate hikes.


The Fed’s regional manufacturing surveys took on a more gloomy tone, with four out of five pointing to a drop in business activity in June. Separately, a measure of overall manufacturing slipped to a two-year low as new orders contracted, held back by continued supply constraints and some softening demand.


The pandemic housing boom comes to a halt as the fastest-rising mortgage rates in at least half a century upend affordability for homebuyers, catching many sellers off balance with prices that are too high.



Confidence in the eurozone economy plummeted as households became more pessimistic amid fears a Russian energy cut could trigger a recession. At the same time, they are less concerned about inflation than they were a month ago, although there is a divide between core and periphery eurozone countries.


After suffering unprecedented shocks in recent years, the UK is succumbing to more intractable problems marked by sluggish growth, runaway inflation and a series of damaging strikes.



China’s economy showed some improvement in June as Covid restrictions were gradually eased, although the recovery remained subdued. That’s the outlook based on Bloomberg’s aggregate index of eight leading indicators for this month. The global gauge returned to the neutral level after deteriorating for two consecutive months.


Output at Japanese factories has shrunk at the fastest rate since the peak of the pandemic as the lagged impact of virus lockdowns in China continues to disrupt supply chains and economic activity in the region. The weakness in the manufacturing sector extended across Asia, particularly in South Korea, Thailand, India and Taiwan.

Emerging Markets


Colombia’s central bank made its biggest interest rate hike in more than two decades. Policy makers are preparing for a new peak in annual inflation already above 9%.


Two years after Argentina emerged from its last default, a debt crisis is brewing again. This time, the immediate problem is in the local bond market, where creditors have become reluctant to roll over maturing government bonds.


Zambia’s inflation rate fell below single digits for the first time in nearly three years in June, bucking a global trend of record consumer price growth. Optimism about the national economy since the election of Hakainde Hichilema as president in August, a possible debt restructuring and a $1.4 billion rescue package from the International Monetary Fund have led to a rise in the local currency, which helped contain prices.



Differences in underlying inflation trends call for different policy outlooks among the world’s major central banks, according to Bloomberg Economics. The Fed will have to go well into restrictive territory, the Bank of England might go a little above neutral, and the European Central Bank might not even go that far.

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