Depth report

　　

The data released by the American Institute of Supply Management on August 1 showed that the US manufacturing growth in July cooled more than expected. Among them, the new orders index fell to 60.2, the lowest point since May 2017, and most of the sub-indices were available this month. Slowed down.

 　 Analysts have hinted that the trading environment has already begun to affect economic activities. With regard to the investigation that tariff disputes will continue to affect business activities in the future, American respondents have expressed “overwhelming” concerns for three consecutive months. However, extended delivery times, interference in the supply of steel and aluminum, labor shortages from suppliers, and difficulties in transportation have continued to appear since May.

 　 In Europe, manufacturing growth in the Eurozone was relatively weak in July. The IHS Markit Manufacturing Purchasing Managers' Index was 55.1, only a slight increase from the 18-month low of 54.9 touched in June. Compared with the United States, the expansion is relatively weak. Trade tensions, tariffs and rising prices have curbed optimism. Among them, Germany's July manufacturing PMI final value was 56.9, lower than the expected value of 57.3; France's July manufacturing PMI final value was 53.3.

 "There is nothing to cheer about the slight increase in PMI. After all, this is the second worst performance in more than a year and a half, and there may be even worse in the future," said Williams, chief business analyst at IHS Markit. "A clear signal. That is, unless demand revives, manufacturers may need to cut production in the coming months."

 　 The UK's July manufacturing PMI was 54 announced on August 1, which was lower than the previous value of 54.4, which was not as good as expected. July manufacturing output hit a new low since March 2017, and new orders data hit a new low since June 2017.

 　 In Asia, Japan’s July manufacturing PMI was initially 51.6, which was a low of more than one and a half years. Hayes, an economist at IHS Markit, said that data show that the growth momentum of the Japanese manufacturing industry at the beginning of the third quarter has slowed down from the beginning of the year. The growth rate of new business has been weak, roughly the same as before. Although the yen has further depreciated, Japanese export demand has continued to weaken for two consecutive months. At the same time, the confidence index of Japan's large manufacturing companies fell by 3 points to 21 points, and it deteriorated for two consecutive quarters, indicating that Japan's moderate economic recovery may be affected.

 Akiyoshi Takumori, chief economist at Sumitomo Mitsui Asset Management, said that under the influence of U.S. protectionist policies, the confidence of large companies in non-ferrous metals and other industries has deteriorated, but overall, large companies’ equipment investment plans are good, and the large corporate confidence index remained unchanged in June. Above 20, the situation is not as severe as it seems.

 　 The purchasing managers' index of China's manufacturing industry was 51.2 in July, which continues to be in the economic zone. Experts said that the PMI trend in the second half of the year will remain within a reasonable range. Taiwan’s data released on August 1 showed that the purchasing managers’ index of Taiwan’s manufacturing industry fell to 56.1 in July, the slowest rate of expansion since February 2017. Taiwan’s manufacturing PMI has been expanding for the 28th consecutive month, but the decline in the index is mainly due to the slowdown in orders and investment by manufacturers based on Sino-US trade frictions and economic weakness in some countries. Their views on the next six months tend to be Conservative.

Economic growth remains worry-free

 　 Despite the slowdown in manufacturing expansion, the global economy as a whole is still growing. The International Monetary Fund said a few days ago that global economic growth is still strong, but the growth rate has begun to level off.

 　 From the perspective of the United States, as spending plans, orders, and activities are still at a fairly high level, the modest slowdown in the manufacturing index has yet to pose a problem for the overall growth prospects. The manufacturing index in July is still higher than the average value of 57.4 for the whole of 2017, and is consistent with the expansion of the manufacturing industry at the beginning of the second half of the year.

　　 The economic growth of the United States is relatively strong. The first estimate released by the US Department of Commerce on July 27 showed that the actual gross domestic product (GDP) of the United States in the second quarter of this year grew at an annual rate of 4.1%, which was much higher than the 2.2% in the first quarter. On August 2, the Federal Reserve issued a statement after the two-day monetary policy meeting ended with five “strong” descriptions of the US economic situation. The Federal Reserve believes that economic activity in the United States has grown at a "strong" rate, and the average employment growth has been "strong" in recent months, and the unemployment rate has remained low. Household spending and corporate investment in fixed assets also grew "strongly." The Fed stated that the monetary policy stance is still loose, and therefore supports the "strong" job market environment and the continued rise of inflation to 2%. The Asian economy is currently relatively stable. The latest report released by ADB shows that despite the growing tension between the United States and its trading partners, the economic growth of developing economies in the Asia-Pacific region will remain stable in the next two years. The Asia-Pacific region is expected to grow by 6% in 2018 and 5.9% in 2019; the level of inflation will gradually decline, and inflation rates are expected to be 2.8% and 2.7% respectively in the next two years.

Adverse effects will gradually appear

    At present, the global economy is still on the growth track, but the imbalance has increased. In the future, if the shadow of the trade war is difficult to eliminate, the impact on the manufacturing industry of countries including the United States will become more and more obvious.

 U.S. media pointed out that before the retaliatory tariffs imposed by other economies on U.S. goods took effect, U.S. businesses were the first to significantly increase exports of agricultural products and food and beverages in the second quarter of this year, making net exports contribute about 1 percentage point to U.S. economic growth in the current quarter. . As trade frictions intensify, foreign trade may drag down US economic growth in the second half of this year. In addition, the 4.1% growth rate is a month-on-month discount rate data. Looking at year-on-year data, the U.S. economy grew by 2.8% year-on-year in the second quarter, slightly higher than the 2.6% growth in the first quarter.

 In addition, because manufacturers purchase raw materials before tariffs and countermeasures, the bargaining power of suppliers has increased, and the ex-factory price of goods has maintained the fastest growth rate in seven years. This factor will be further transmitted to the demand side in the next few months. Bring up consumer prices.

 　 Due to higher tariffs and short supply in the labor market, the costs of some large industrial companies are rising. Even if the financial reports of some companies exceeded analysts’ expectations, it would not help offset investors’ concerns about the impact of the Trump administration’s imposing import tariffs on manufacturers. Alcoa said that a 10% tariff on aluminum would increase the cost of aluminum it imports from Canadian smelters. American media said that rising costs are ruining the order feast of American manufacturing.

    Professionals also warned that if trade frictions continue to intensify, some Asian economies may be hit hard. Among them, Asian economies such as South Korea, Malaysia, Singapore, and Taiwan are more dependent on exports and will be particularly vulnerable. The chief economist of DBS Bank said that considering the openness of trade and dependence on the supply chain, Malaysia, Singapore, South Korea and Taiwan will not have any respite from this tail-risk situation.