Industrialized Economies Stall, but Fall in Commodity Prices Offers a ‘Ray of Hope’

(Video: Associated Press • Story: Industry Week)

In a report released on October 10, The Manufactures Alliance/MAPI forecasts the growth of total U.S. goods and services export demand to slow from 8.4% in 2008 to 7.3% in 2009. The latter is significantly below the previous quarterly forecast of 9.7% for 2009.

The study notes that major economies such as Germany, Japan, and France slipped into negative growth in the second quarter of 2008.

Gross domestic product (GDP) growth in non-U.S. industrialized countries, which include Canada, the Eurozone (plus Denmark, the United Kingdom, and Sweden), and Japan, is expected to register a tepid 0.6% during the fourth quarter of 2008, then accelerate slowly to 1.5% during the first quarter of 2009 and 1.7% during the second quarter of 2009. Contingent upon a recovery in the troubled U.S. economy, MAPI forecasts industrialized country growth to recover more fully to 2.1% during the third quarter of 2009 and 1.9% during the fourth quarter of 2009.

Aggregate developing country growth is expected to remain below 5% until the second half of 2009. Specifically, MAPI sees growth slowing from 4.8% during the third quarter of 2008 to 4.7% during the fourth quarter before accelerating modestly to 4.9% during the first and second quarters of 2009 and 5% during the last half of the year.

The report questions the sustainability of the current dollar appreciation in that it appears due almost entirely to emerging weakness in key trading partner nations as opposed to any positive economic, financial, or policy signals from the U.S. Read more here.