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WORLD: Difficult global background: global economy slow-down and growing investment uncertainty

After a decade of moderate economic growth, global growth has clearly slowed down in all regions in the first semester of 2019. However, most large economies still face limited risk of recession.

So far, the slowdown seemed to be provoked by long-term factors such as stagnant labour supply and weak productivity growth rather than by a broad decrease in investment. Labour markets are tight in most major industrialized countries.

Global growth lacks demand drivers and there is increasing uncertainty (US-China escalating tensions in trade and technology sectors, the Brexit-issue). Further to spreading to national-security and domestic political issues, trade (and currency) dispute could disadvantage both the involved parties and the global economy. With the deterioration of economic growth, the public debt issue could become an urgent problem in certain countries, adding financial instability to an already precarious economic situation.

According to the World Bank, global trade growth should fall from 4.1% last year to 2.6% this year. The weakness in trade has affected mainly capital goods. The current trade disputes uncertainties and other geopolitical issues impact the global business confidence. Companies are more hesitant to program large capital expenditure plans. While investment in construction is strong, investment in equipment and machinery is weaker than last year.

Industrial countries face decreasing demand, lower inflation rates and decreasing inflation expectations. The economic slowdown was followed by a shift in monetary policies by the world’s largest central banks toward greater easing. Economic actors are increasingly concerned by the economic impact of increased extreme weather (hurricanes, floods, wildfires).

 

September 2019

ECSA Chemicals AG
Burgauerstrasse 17
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ECSA Maintenance AG
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Via Luigi Favre 16 
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CHE-480.131.332

ECSA Energy SA
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CHE-356.953.942

ECSA ITALIA Srl Società
con Unico Socio
Via Lavoratori Autobianchi 1 
I-20832 Desio (MB)
(Stabile n. 15 - Polo Tecnologico della Brianza)

T. +39 0362 625 421
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P.IVA IT00222470130

Codice destinatario: C1QQYZR

Porta Ticino Easy Stop SA
Via San Giorgio 37
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T. +41582119910
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CHE-477.597.888

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