World manufacturing suffered another blow at the end of the second quarter, which speaks of a deterioration in economic growth prospects as trade conflicts between the United States and China continue to simmer.
In Asia and Europe manufacturing activity contracted in June, while the US showed a low growth, according to indexes of purchasing managers. A global measurement points to a second consecutive contraction, the first time this has happened since 2012.
Signs of weakness were widespread in Monday’s reports, as Chinese manufacturers experienced declines in sales and production and Germany suffered a decline due to the weakening of foreign demand. Exports from South Korea fell by almost 14% and Japan‘s Tankan confidence index fell to its lowest level in three years.
Still, global stocks rebounded before the ceasefire announced by US President Donald Trump and his Chinese counterpart, Xi Jinping, at the G20 summit in Japan.
However, it will not be easy to dispel the general pessimism if the economic figures continue to weaken. Morgan Stanley lowered its global growth forecast and said the truce is not enough to eliminate the uncertainty surrounding trade, which will affect the outlook.