Global industrial production (IP), which was flat in the second quarter of 2012 (the worst performance since the 2009 global recession), seems to have picked up speed in July based on latest CPB data. While the 0.4% IP increase in July is welcome news, the coinciding decline in trade volumes (- 0.2%) isn’t so. In fact, the ratio of industrial output to trade volumes, a proxy for the global inventory-to-sales ratio, rose again in July, extending an uptrend that started about a year ago.
Such stock building doesn’t bode well for global production and growth over the rest of the year, unless of course trade volumes see a significant rebound in coming months. But with Europe’s ongoing recession and the apparent moderation in Chinese demand, such a sharp rebound is unlikely for now. All told, the expected moderation in global output growth could generate headwinds for commodity prices over the coming months, even as the Fed’s printing press gears up.
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World: Stockpiling Could Hit Growth In 2012 H2
Published 09/25/2012, 01:54 AM
Updated 05/14/2017, 06:45 AM
World: Stockpiling Could Hit Growth In 2012 H2
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