In conjunction with the summit meeting of G-20 leaders held in Indonesia, the International Monetary Fund (IMF) indicated that the expected 2023 economic outlook appears gloomier that that forecasted just last month. Special emphasis is placed on Europe, in-particular.
The recently published IMF blog posting, begins with the statement:
“Global economic growth prospects are confronting a unique mix of headwinds, including from Russia’s invasion of Ukraine, interest rate increases to contain inflation, and lingering pandemic effects such as China’s lockdowns and disruptions in supply chains.”
Added reference is made to:
“… a steady worsening in recent months for purchasing manager indices that are tracking a range of G20 economies. These survey-based measures gauge the momentum of manufacturing and services activity.”
The posting further observes:
“..readings for a growing share of G20 countries have fallen from expansionary territory earlier this year to levels that signal contraction. That is true for both advanced and emerging market economies, underscoring the slowdown’s global nature.”
Coupled with this latest IMF update was last month’s indications from the World Trade Organization (WTO) that global trade will slow sharply in 2023, after decelerating in the second half of this year.
Key shipping lines in the ocean container segment has now acknowledged not only the end of the past global trade boom, but dramatically reduced global fleet capacity needs for 2023. As to what will happen with contracted shipping rates, that exploded in 2021, remains an open question and subject to various viewpoints.
Supply Chain Matters has also called attention to this steady decline in global and regional manufacturing PMI indices, the latest being our highlights and perspectives of October global and regional reporting.
The below figure depicts the slope toward contraction for the J.P. Morgan Manufacturing PMI® published by S&P Global.
We similarly concluded that with increasing signs of contraction of global wide manufacturing and supply network leading indicators, that the year 2023 is indeed going to be another especially challenging year for industry supply chain teams.
We will have more to share in early December as we unveil our assessment of what multi-industry supply chain teams should anticipate in the coming year followed by our annual detailed predictions for specific supply chain areas in the coming year.
Stay tuned since events and assessments are ongoing and fluid to state the least.
Bob Ferrari
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