Ever Changing World
As we head into the final quarter of the year we find the global economy slowing, inflation conspicuous by its absence and central banks delivering accommodative monetary policies. Increased volatility in markets reflects the ongoing trade tensions around the world confluence with heightened domestic and geopolitical risks. This uncertainty is having a profound effect on business confidence, trade and investment.
Industrial production and the manufacturing sector are being effected the most by the rise in protectionism, slowing global growth. In particular, the export economies of Europe, Japan and China have contracted, as supply chains that have been developed over decades are adapted to new scenarios. The service sector has, so far, remained resilient. Consumers appear relatively healthy with good employment, wage growth and benign inflation. This is especially true in the US where unemployment is at a 50 year low. Whether the global economy slows further will depend upon the willingness of political leaders to adjust their current fiscal and trade strategies.