Global Manufacturing Gets a Cold

The saying goes that when the United States sneezes, the world catches a cold. Recent statistics show that global manufacturing, including in the United States, has indeed caught a pretty bad cold.

From today's New York Times:

From Australia, to Asia and Europe and the United States on Wednesday, the message in the latest economic reports was clear: manufacturing continued to slump amid the worst slowdown since the Great Depression.

In the United States on Friday, a crucial measure of manufacturing activity fell to the lowest level in 28 years in December. The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index was 32.4 in December down from 36.2 in November.
…

In Europe, a closely watched index of purchasing managers showed manufacturing hit a low in December, falling to 33.9 from 35.6. Any reading above 50 signals growth, while a reading below 50 indicates contraction in manufacturing. Similarly grim readings in Australia, China and India highlighted how the Asia-Pacific region has become caught up in the global turmoil.

In China, the purchasing managers' index by the brokerage firm CLSA showed the manufacturing sector had contracted for a fifth consecutive month. The survey showed the steepest decline in its history.

For more bad news about the global economy, and the steps being taken to right the ship, the full article can be found here. China announced its first response in November: a $586 billion stimulus package focused heavily on rail - and the incoming Obama administration is in the process of formulating what is being reported as a two-year package of $675-775 billion.

In November, Simon Rosenberg argued that American foriegn policy must be oriented toward overcoming the massive economic problems facing the global economy, and, in December, Dr. Rob Shapiro took a look at the global implications of the dismal science practiced by the current architects of American economic policy.