Times are getting tough for world economies

Posted by admin on 18 October, 2008 under Business news | Be the First to Comment

US industrial production has seen its sharpest fall in 34 years in September 2008.

The output from US factories, utilities and its mines has fallen by 2.8% last month, this fall was made wost with a slow down due to the recent hurricanes, Gustav and Ike. There are now concerns that the US may already have entered a recession with the UK expected to go into recession by December and problems on continental Europe too.

There is good news where consumer prices have remained flat in the same month, which is a sign that inflation is beginning to ease and might lead to further cuts in interest rates to follow on from the recent round of cuts made by world governments.

There are also signs that world’s food price rises are slowing down and in some cases are falling, including meat and fish and fruit and fresh vegetables. This too will help to lowering inflation pressures and also, at a difficult time for consumers, ease the burden on household bills.

Problems in China

China is also being hit by the slow down and another Chinese toy manufactuer Smart Union has gone out of business with a loss of close to 7,000 jobs. The company, which supplies US business Mattel, has not paid wages to it’s employees which has angered the work force leading to protests and the police getting involved. So far in 2008 more than 50% of China’s toy exporters have gone out of business as a result of rising raw materials and labour costs.