- China’s Trade Accelerates in August
- German Factory Orders Rose in July
- Goldman Sachs Lowers its Growth Forecast for the US
China’s Trade Accelerates in August
Despite difficulties caused by the spread of the coronavirus delta version, China’s import and export growth increased in August. Customs statistics revealed that exports increased 25.6 percent year over year to $294.3 billion, up from 18.9 percent rise in July. Imports increased by 33.1 percent to $236 billion, up from 28.7% the previous month. That came despite ongoing interruptions in industrial production chains.
As anti-disease regulations were lifted, entertainment and other service industries reopened, and international competition returned to global markets, China has defied predictions that export demand would level down.
“Exports and imports were much stronger than anticipated last month thanks to buoyant demand, even as the data point to some lingering supply shortages,” Sheana Yue of Capital Economics stated.
After the ruling Communist Party announced the virus under control in March 2020, Chinese exporters reopened, while foreign competitors were hampered by anti-virus restrictions.
President Joe Biden, who took office in January, has yet to indicate if he will reverse the tariffs placed by his predecessor, Donald Trump, on Chinese goods. Both sides’ envoys have communicated via video link, but no date for negotiations has been set.
German Factory Orders Rose in July
According to Destatis, German manufacturing orders surprisingly increased in July, supported by international demand from the various sectors. German industrial production increased more than projected due to the country’s ability to overcome supply constraints. Following a 4.6 percent growth in June, factory orders rose 3.4 percent in July, exceeding predictions for a 0.7 percent fall.
New orders in July 2020 were 15.7 percent higher than in February 2020, the month before Covid-related restrictions went into effect.
ING economist Carsten Brzeski said: “After a disappointing second quarter, industrial production has finally offered some long-expected signs of life.”
“Remember that, despite the lifting of restrictions around the world, German industrial production disappointed in the second quarter, dropping every month between April and June. Supply chain frictions such as the blockage in the Suez Canal and semiconductor delivery problems affected vital sectors of German industry and more than offset the positive impact from lifted restrictions. “
Outside of the industry, energy output was down 3.2 percent, while construction output was up 1.1 percent from June.
Goldman Sachs Lowers its Growth Forecast for the US
Goldman Sachs Group economists revised down their 2021 growth forecast for the US economy. Goldman Sachs Group economists have revised down their 2021 growth forecast for the US economy, citing a “harder road ahead” for American consumers than previously anticipated.
Economist Ronnie Walker noted in his report that overall growth is expected at 5.7 percent in 2021. In the report, at the end of August, the growth was expected to be at the level of 6 percent.
Walker said the weaker growth would be followed by a revival in 2022. Goldman raised its growth forecast for 2022 from 4.5 percent to 4.6 percent.
Walker attributed the downward revision of 2021 growth to the fact that American consumers will likely spend less due to the increase in the Delta variant, declining financial support, and reduced demand for goods and services. Walker also added that supply chain disruptions had a negative impact on restocking.
The bank also raised its unemployment rate projection for the end of 2021 to 4.2 percent from its previous estimate of 4.1 percent.