gE Blog Series: Global Resiliency Part 3 - Manufacturing Industry Moves Forward
The storm caused by the European Debt Crisis has loomed like a dark cloud over much of the world. But certain sectors of the economy, the transport manufacturing industry in particular, have weathered the turbulent markets. It is the rise in purchasing manager indexes for the United Kingdom, Switzerland, China, India, and Australia, coupled with the decrease in Germany's unemployment that make economists suggest a boom in the export of cars and machinery for the coming year.
With increased purchases of transport goods, manufacturers will increase their production to keep up with demand. They must, therefore, invest in fixed asset (like machines and equipment) which is good for long-term economic growth. Implications of growth in manufacturing have indeed given the golden touch to many countries and industries.
In India, the fiscal policy of the country's central bank has been of much concern after a sharp decline in industrial manufacturing output in October. But with India’s manufacturing industry rebounding after a month, fears that borrowing hindered development in the industrial sector were put to rest. Healthy domestic economies, such as India’s, attract international firms seeking industrial investment opportunities.
Most of the corporations that invested heavily in manufacturing have been Asian countries. Seizing the opportunity to expand their trade influence, these companies have not only boosted the demand for emerging-market assets, but also advanced their nation’s currency. Singapore’s dollar, which has gained value despite government reports of economic shrinkage, and India’s rupee, which climbed as domestic inflation rose, have defied expectations due to global investment in their respective regions. The Chinese yuan, especially, has increased its global reach by strengthening 0.4 percent, proving the manufacturing industry resilient to Europe’s debt woes.