RIYADH: Morale among major Japanese manufacturers fell in the first quarter from the previous three months, the Bank of Japan’s closely watched “tankan” survey showed on Friday, as lingering pains from COVID-19 and the war in Ukraine clouded the outlook.
The overall index for major manufacturers slipped to plus-14 from plus-17 last quarter, the central bank’s key survey showed. That compares with economists’ median estimate for plus-12 in a Reuters poll of analysts.
US unemployment rate drops
U.S. employers maintained a strong pace of hiring in March, dragging the unemployment rate to a new two-year low of 3.6% while raising wages, causing labor market conditions to tighten further and opening door to a high interest rate of 50 basis points. Federal Reserve rate hike in May.
The Labor Department’s closely watched jobs report on Friday also showed more people joining the job market, likely attracted by the higher wages. Employment in the professional and business services, financial activities and retail sectors is now above pre-pandemic levels.
The 11th consecutive month of job creation of more than 400,000 underscored the resilience of the economy, although growth appears to have slowed significantly in the first quarter under the weight of high inflation amid tangled supply chains .
Growth forecasts in Italy
Italian employers’ association Confindustria on Saturday cut its growth forecast for the economy in 2022 to 1.9% from an estimate of 4.1% given in October, citing the impact of a “deep supply shock following Russia’s invasion of Ukraine.
In a report, the CSC association’s research unit predicts that gross domestic product will grow by 1.6% next year, adding that the worsening scenario would postpone a return to levels seen before the coronavirus pandemic – originally planned for the second quarter of 2022 – the first months of next year.
The new forecasts are based on the assumption that the war in Ukraine ends by June, or at least that economic uncertainties diminish, but the figures would likely weaken further if the conflict persists until the end of this year. , or even extended into 2023, the industry association added.
Mexico’s government forecasts economic growth of 3.4% for 2022, well below what the country’s president was aiming for, a finance ministry document showed on Friday, as Latin America’s second-largest economy recoups losses of the COVID-19 pandemic.
The ministry said in a released budget document that it expects the economy to grow by 3.5% in 2023.
“The ongoing impacts of the pandemic on supply and demand imbalances, and the escalating geopolitical conflict between Russia and Ukraine, have forced countries to adjust their growth expectations for this year,” says the document.
Factory activity in China
Chinese factory activity fell at the fastest pace in two years in March due to a local resurgence of COVID-19 and economic fallout from war in Ukraine, a survey found on Friday, bolstering the case. increased political support for the economy.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 48.1 in March, indicating the steepest rate of contraction since February 2020, from 50.4 the previous month.
The 50-point index separates growth from contraction on a monthly basis.
The deterioration in manufacturing conditions was broadly in line with the official PMI released on Thursday, which showed activity had contracted at the fastest rate since October 2021. The Caixin survey of the private sector focuses more on small coastal enterprises than the official investigation.