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US job cuts and Far East woes cloud G20 hopes
Hugo Duncan01.04.09
Hopes that the European economy has stabilised were overshadowed today by a tidal wave of dismal news from Asia and the US as leaders of the G20 nations gathered in London.
Figures showed the decline in European manufacturing eased last month in a sign that green shoots of economic recovery could be emerging on the continent.
UK manufacturers also enjoyed a much-improved March as the weak pound boosted demand for British goods abroad. The purchasing managers index, which measures activity in the manufacturing sector, jumped from 34.9 in February to 39.1, although it remained below the 50 cut-off between expansion and contraction for the 11th month in a row.
But any hopes of a turnaround for the global economy were dashed by shocking figures from the US showing 742,000 workers lost their jobs last month as firms slash staff to cut costs.
Unemployment was also up in the eurozone in February to 8.5%, close to a three-year high, while retail sales in Germany unexpectedly fell 0.2%.
The scale of the task facing world leaders was further underlined by a collapse of business confidence in Japan, manufacturing woes in China, and sharp fall in exports in South Korea. US President Barack Obama said: “We can only meet this challenge together. All of us here in London have the responsibility to act with a sense of urgency.”
City economists had warned that the improvement for UK manufacturers could be shortlived. Jonathan Loynes of Capital Economics said the March ump was “a welcome surprise but does not transform the picture of very weak conditions in the industrial sector”.Howard Archer of Global Insight warned that “one swallow does not make a summer”.
In Asia, the Bank of Japan said business confidence in the world's second-largest economy crashed to an all-time low in March after an unprecedented drop in demand for cars and gadgets at home and abroad. In China, the contraction in manufacturing, which accounts for about 40% of the world's third-biggest economy, worsened as the global downturn battered trade. South Korean exports also declined.
China president Hu Jintao saidthat “world countries should adopt economic stimulus steps suited to their conditions [and] reinforce co-ordination of their macroeconomic policies.”
You get my vote, Darling gives thumbs-up to the Geithner plan
Alistair Darling signals his backing for American counterpart Timothy Geithner today ahead of the G20 summit. The Chancellor met the US Treasury Secretary at 10 Downing Street while Gordon Brown and Barack Obama held talks.
The UK and US want to present a united front at the meeting and played down talk of a rift between global leaders on how to tackle the economic crisis. President Obama praised Geithner's proposals for “as aggressive a set of regulatory measures as any that have emerged among G20 members”.
Reader views (4)
UK needs to show independence from US's policy on financial matters. just simply following US is what the reason behind the crisis. I just can't believe why the US and UK can't agree on FRANCE/GERMANY's proposal on tighter regulation on these banks and brokerages that have caused so much suffering and sacrifices. This shows Obama and Gordon are still out of whack with the reality.You can't trust people with money. They will keep causing these kinds of havoc without real tight controls. The bankers should never be paid for their performance.
- Kanan Krishnan, mountain view
The UK economy is drinking at the last chance saloon. The G20 tomorrow needs to come up with a workable strategy. The news from the USA is that even though they entered recession two years before the UK the signs are their economy is still deteriorating.
Even at a macroeconomic level yesterday TFL announced further cancellation of transport infastructure investment in London. The Mayor is presiding and implementing over £3 billion of cuts while unemployment in the Capital is rising fast. These were 'shovel ready' projects that could easily have been commenced.
It may be that emergency measures need to be taken by central government to relieve Boris of some of his responsibilities if as Mayor is not up to the job. Without intervention thousands stand to lose their jobs and many small business, and larger ones will go under.
Unfortunately consumers are now withdrawing their spending at the very moment when it is vital to the economy. That then only leaves the government to kick start the economy.
The bankers are still concealing their toxic debts, and there is every likelyhood that this will be evidenced by further high street bank failures.
This is not a time to be considering protectionism as every other economy will then retaliate with counter- measures
- Damien Vaugh, London,UK
Mickyinlondon: One of the wisest post I have seen in a long time. esp on vacation.. how true
- Shanky, chicago, usa
The working mans road to recovery is the same as always.
Why do we need a new car; when our old one works just fine, and will for years?
Why pay £300.000 for a house that only cost £500 to build, and is now old and needs constant repair.
Why do we need digital televisions when analogue one are faster and does the job just as well?
Why sell your assets cheap for any reason; when it costs you more to replace them later. [More government than people]
Why eat out at expense; when it is far cheaper to eat at home.
Why save for small interest bank rates; when it is better to buy for cash without high repayment rates; and have the goods you want now.
Why have holidays abroad with all the travel and stress that involves; just for a couple of weeks; before you have the return stress of going home again; where most people are glad to get back to anyway; the cost and stress is hardly a holiday.
G20 may be important to Governments and Financial Services Empires; but for ordinary people it means nothing at all; you can’t reduce the poverty of the majority of people in a country by global expansion; you can only reduce the poverty of people by expanding your own environment in your own country.
Manufacturing and building at home make good sense; not doing it all abroad and far away.
The United Nations has not stopped wars with all their talk since their formation; the EEC has not improved our lives either; the G20 gathering is much the same thing.
- Mickyinlondon, london
