Recession risk still haunts global economy, but recession confirmed – ICIS

SAO PAULO (ICIS)—Global economic activity remains subdued and the risk of recession remains, but the pace of decline is firming, the ICIS Leading Business Barometer (LBB) for October showed.

Although there are large regional differences, Europe’s LLB weak data approximates recession – a recession
Increasingly supported by official data
– When America and China appear in top form.

Overall, global LBB was flat in September compared to August, but down 0.9% compared to September 2022. The index peaked in March 2022.

Europe, reeling from the shock of an energy crisis after Russia invaded Ukraine, has been the hardest-hit area with LBB accumulating two years of declines.

In the past few months, the rate of decline has accelerated, adding to fears of a recession; Europe’s LBB fell 0.5% in August and 3.5% from September 2022.

As China’s post-pandemic recovery has been slower than expected, short-term, after deregulation, the economy has returned to a slower gear, LBB paints a mixed picture in the past few months.

The data continues to add to concerns about how sustainable the country’s recovery will be. China’s LBP was flat in September and year-on-year.

America’s LBB posted a slight decline for the month, but was nearly 4% lower than in September 2022. In October, manufacturing-related indicators were mixed on items sensitive to cyclical fluctuations.

Raw material, other input prices and selling prices fell, while inventory and other broad leading economic measures were negative, but limited. US LBB trends over the past year have been consistent with recessionary conditions.

Kevin Swift, senior economist for global chemicals at ICIS, said the global economy was still largely reeling from the pandemic as major economies moved into the latter stages of an uneven expansion from a pandemic-induced recession.

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„There is evidence of expansion in service activity in many developed economies, with tightening monetary policies and higher oil prices weighing on the outlook. China’s economy appears to be stabilizing amid policy easing, while Europe’s economy has lost momentum amid a manufacturing slowdown,” Swift said.

„The US 'rolling’ recession situation continues to play out amid strong Q3 growth. Global trade remains soft, and we expect global trade volume to expand only 0.3% this year, slowing to 5.1% in 2022 and 10.9% in 2021. The global ICIS Petrochemical Index (IPEX )
Weak in all areas
until October.”

Global trade is expected to gain momentum with a 2.9% expansion in 2024, and a 3.8% increase in 2025, Swift added.

ICIS LBB
(2010=100)
October September PlantsD

Europe

107.8

108.3

108.7

– Mom% change

-0.5

-0.4

-0.5

– Yoy% change

-3.5

-3.6

-3.5

China

242.6

242.5

242.4

– Mom% change

0.0

0.0

0.0

– Yoy% change

0.9

0.5

1.0

to us

123.0

123.1

123.5

– Mom% change

-0.1

-0.3

-0.3

– Yoy% change

-3.8

-4.9

-5.3

Universal 148.6 148.6 148.9

– Mom% change

0.0

-0.2

-0.1

– Yoy% change

-0.9

-1.3

-1.1

The ICIS LBB looks at nearly 20 indicators related to the production of goods and other industries that are sensitive to cyclical fluctuations; raw material and input prices; selling prices; working hours; relative stock prices; Inventory from business sales; and many broader economic leading economic activities.

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