There are growing fears that economic growth around the world is slowing at a faster rate than expected. This quicker than expected slow-down in growth comes after a synchronised lift in economic growth in 2017 and 2018 around the world, led by a strong pace of economic growth in the US which was fuelled by wide-ranging tax cuts implemented by the Trump administration. This has led to very low unemployment levels in the US and rising wages. In response, the US Federal Reserve started to lift interest rates in the second half of 2018 to combat an expected rise in inflation rate and cool the economy. It had indicated further interest rate rises were expected in 2019. Now, in response to global signs of slowing growth and rising risks, it has reversed this stance. Overall, the outlook for 2019 and 2020 is less rosy on the global economic front than it has been in the past 2 years.
Despite these signs of dark clouds building over the key economies for 2019 and 2020, consumers remain very upbeat in most of the major wool consuming countries and regions. Consumer confidence in the US dipped at the start of 2019 but rebounded in February on the back of extremely low unemployment levels and rising wages. Confidence among consumers in the EU has waned a bit over the past few months as concerns about Brexit, slowing economic growth and industrial scandals in Germany, political change in Italy and the ‘Yellow Vest’ protests in France have weighed on consumers. Nevertheless, confidence remains at still high levels compared with many times over the past two decades. In Asia, consumer confidence in China and Japan is quite robust. Only in South Korea have consumers withdrawn and become significantly less positive about the future.
Full details including a chart showing trends in consumer confidence in key wool consuming countries are included in the NCWSBA’s Weekly Newsletter for the week ending 29th March 2019. Available to NCWSBA Members.