Wednesday, March 21, 2012

World Trade and Output Set New Records in Jan.

The CPB Netherlands Bureau for Economic Policy Analysis released its monthly report this week on world trade and world industrial production for the month of January 2012.  Here are some of the highlights:

1. World trade volume increased in January by 0.9% on a monthly basis and by 2.8% on an annual basis, bringing the global trade index to a new all-time record high of 167.5 (see blue line in chart).  World trade is now 4.6% above the previous April 2008 peak of 160.2 in the early part of the U.S. and global recessions.  

2. By region, annual export growth was led by the United States at 10%, followed by 9% export growth for Latin America and 9% for Central and Eastern Europe.

3. World industrial output increased by 0.8% in January from the previous month and by 3.6% on an annual basis, reaching a new all-time high of 146.2 (see red line in chart), with especially strong annual output growth in Asia (8.2%) and emerging economies (6.3%).   Output declined in Europe (-0.9%), Latin America (0.4%), and Japan (-1.0%) on an annual basis, and increased by 3.5% in the United States.

4. World output is now 8.3% above its pre-recession level in February 2008 (135.0) and 24% above the recessionary low in February 2009.  

Bottom Line:  Both world trade volume and world industrial output reached fresh record monthly high levels in January.  Trade and output are now far above their pre-recession levels, providing evidence that the global economy has made a complete recovery from the 2008-2009 recession.  For the U.S., the annual growth rates for exports (10%) and industrial output (3.5%) reflect the underlying strength in America's manufacturing sector. 

19 Comments:

At 3/21/2012 11:42 AM, Blogger Buddy R Pacifico said...

MP states: "For the U.S., the annual growth rates for exports (10%) and industrial output (3.5%) reflect the underlying strength in America's manufacturing sector."

I'm not sure that anyone predicted this would happen for America's "new economy". Many have written and said that a strong manufacturing base is needed for the U.S. economy, so this is very good news .

U.S. manufacturers have strengthend their competitiveness to help benefit the overal economy, and consumers all over the world.

 
At 3/21/2012 11:53 AM, Blogger Benjamin said...

I agree with Buddy, and I never thought the "strong dollar" crowd knew what they were talking about.

The Fed should drive the dollar even lower.

I also wish we would revamp our educational system to stop lionizing white-collar jobs and start lionizing productive jobs in manufacturing.

 
At 3/21/2012 12:25 PM, Blogger VangelV said...

If things are going so well why is it that electricity consumption is down as much as it is?

 
At 3/21/2012 1:00 PM, Blogger juandos said...

"If things are going so well why is it that electricity consumption is down as much as it is?"...

Must be coincidence vangeIV because someone sent me a link to this Pew study: The Boomerang Generation
Released: March 15, 2012

If there’s supposed to be a stigma attached to living with mom and dad through one’s late twenties or early thirties, today’s “boomerang generation” didn’t get that memo. Among the three-in-ten young adults ages 25 to 34 (29%) who’ve been in that situation during the rough economy of recent years, large majorities say they’re satisfied with their living arrangements (78%) and upbeat about their future finances (77%).

 
At 3/21/2012 1:04 PM, Blogger morganovich said...

"I also wish we would revamp our educational system to stop lionizing white-collar jobs and start lionizing productive jobs in manufacturing."

ooh, yeah, and farming too!

moving back to manufacturing is a step backward and would drive average incomes down and reduce prosperity, not enhance it.

rich economies are knowledge and service based. manufacturing jobs are low pay and capital intensive.

it's platform companies like apple that own the future (and the present).

also: you do realize the dollar is up, not down in the last year, right?

 
At 3/21/2012 1:25 PM, Blogger Buddy R Pacifico said...

morganovich states:

"ooh, yeah, and farming too!

moving back to manufacturing is a step backward and would drive average incomes down and reduce prosperity, not enhance it."


There is more produced from farms in the U.S. than ever before. The same should be said for manufacturing. Prosperity is not reduced from highly productive farming or manufacturing, it is enhanced.

 
At 3/21/2012 2:01 PM, Blogger morganovich said...

buddy-

oh, i totally agree about upping productivity and manufacturing output, i was objecting to benji's idea that we need schools to produce more manufacturing workers and that those were the only "productive jobs" as opposed to white collar ones.

upping production is great. it's upping manufacturing employment as a % that i think is a bad idea.

 
At 3/21/2012 2:03 PM, Blogger bart said...

V said: "If things are going so well why is it that electricity consumption is down as much as it is?"


"Any sufficiently advanced technology is indistinguishable from magic."
-- Arthur C. Clarke

 
At 3/21/2012 2:23 PM, Blogger Buddy R Pacifico said...

Vangel asks:

"If things are going so well why is it that electricity consumption is down as much as it is?"

Record setting warm weather in the most populous regions of the U.S. and Canada, are much of the reason for "recent low usage".

 
At 3/21/2012 2:49 PM, Blogger Buddy R Pacifico said...

morganovich, I have to agree with Benji that we could use more manufacturing oriented education. We have higher ed agricultural schools and we need the same for manufacturing ed.

I wore a blue collar when I was much younger and worked to become white collar. Much of today's blue collars are much more skilled than I was, and deserve more respect as American Manufacturing is re-built. I'm glad I got a white collar, but I'm thankful for and respectful of the blues.

 
At 3/21/2012 4:03 PM, Blogger morganovich said...

"We have higher ed agricultural schools and we need the same for manufacturing ed."

we have them. they are called schools of engineering.

i think you are drawing a flawed analogy.

the farmer who plans the farm and makes the big choices may have gone to ag school, but the guy baling hay didn't and didn't need to.

the factory is the same. you don't need higher education to work on an assembly line. what does it add? you need engineers to put it together and rework the process, but having a degree in operating a lathe is just overkill in the same way that 4 years of animal husbandry at university is overkill for mucking out the horse barn.

 
At 3/21/2012 5:50 PM, Blogger Craig Howard said...

The Fed should drive the dollar even lower.

Yeah, because decreasing US investment and making imported goods more expensive for Americans is such a good idea!

 
At 3/22/2012 8:06 AM, Blogger Jet Beagle said...

This comment has been removed by the author.

 
At 3/22/2012 8:09 AM, Blogger Jet Beagle said...

I understand that manufacturing companies need both engineers and highly skilled blue collar workers. But I don't believe the U.S. has a shortage of training facilities such workers.

Modern factories need fewer and fewer low-skilled workers, of course.

I think some people who commented would have us go back to the so-called "glory days" of blue collar workers - back when low-skilled unionized workers somehow forced American consumers to pay outrageous wages for the very low value added by such workers. American consumers got wise, and that ship has sailed.

 
At 3/22/2012 8:29 AM, Blogger morganovich said...

HONG KONG (MarketWatch) — Chinese factory activity is slowing sharply, dragging on employment amid a deepening slowdown in global demand and aggravated by a stall in domestic consumption, according to March survey data showing new orders at a four-month low.

A preliminary reading of HSBC’s manufacturing purchasing managers’ index for March, released Thursday, printed at 48.1 on a 100-point scale, down from a final reading of 49.6 in February.

Weakening domestic demand continued to weigh on growth, as indicated by a slowdown in new orders, which came in at a four-month low,” said Qu. “More worryingly, employment recorded a new low since March 2009, suggesting slowing manufacturing production was hindering enterprises’ hiring desire.

The deterioration in orders matched a surprise slump in industrial-production growth, adding to the darkening outlook, which will play a role in factory managers’ decisions.

“External demand remained in contraction territory, but the decline was at a slower pace, implying that there are no improvements in the demand outlook,” Qu said.

 
At 3/22/2012 9:55 AM, Blogger bart said...

Buddy said: "Record setting warm weather in the most populous regions of the U.S. and Canada, are much of the reason for "recent low usage"."


It's FAR more than just a recent phenomenon.

http://www.nowandfutures.com/images/electric_generation.png

 
At 3/22/2012 3:52 PM, Blogger Ron H. said...

Jet: "I think some people who commented would have us go back to the so-called "glory days" of blue collar workers - back when low-skilled unionized workers somehow forced American consumers to pay outrageous wages for the very low value added by such workers. American consumers got wise, and that ship has sailed."

It wasn't all bad, though, those high wage workers encouraged the adoption of automation, and other productivity gains, and hastened their own obsolescence.

The most complicated human job I see in this video is driving the car. Hardly a rare skill.

 
At 3/22/2012 4:09 PM, Blogger Ron H. said...

This comment has been removed by the author.

 
At 3/22/2012 4:13 PM, Blogger Ron H. said...

By the way, anyone who thinks autoworkers making $14-18/hr are getting a raw deal, should watch this video of a Mini assembly plant, pay close attention to the jobs people are doing, and think about what's reasonable pay for those jobs, based on the apparent skill required.

 

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