Manufacturing is a dangerous place to have a job at the moment.
Employees in Asia are being squeezed from two sides.
Firstly, China is trying to move itself away from being the world’s factory towards a services and consumption led economy.
And secondly, global demand and trade is dropping like a stone, leading to fewer export orders.
Manufacturing the world over continues to slide. Asia is feeling the brunt. Trade, after a dismal 2015, continues to fizzle, with new export orders still contracting. The region’s domestic travails, above all in China, are well known, but the West is also losing steam. What’s worrying is that employers have started to cut back, raising the risk of a hit to consumption.
What’s perhaps most worrying is that manufacturing employment has started to suffer in many parts of Asia (though surprisingly improving in Korea). This suggests that household spending, so far surprisingly resilient in much of Asia, could begin to weaken.
The worry is whether increasing unemployment in manufacturing in turn leads to less spending and consumption in China, which is already experiencing headwinds.
Employment levels in manufacturing are at their weakest since 2009 and the aftermath of the global financial crisis.
Here’s the chart: