This month's View from the Bridge should really be entitled BRICS v The Old World, given the recent recovery in the US and Japan which contrasts so starkly with the slowdown in the “fast growing” BRICS nations.
In the US, the Manufacturing Index has a surged to a new high of 55.4, from 50.9 in June this year. PMI (one of the best indicators of likely GDP growth) has risen again, too, hitting 53.6. Forecasts for the North American Automotive production are now expecting 16m vehicles to be produced next year; a far cry from output of almost half that number (8.6m) in 2009. The world’s biggest economy seems to be fighting back and even its trade deficit has shrunk.
Japan, coming off the back of the weaker Yen, has now generated strong corporate profits growth which the Government is hoping will finally result in bolstering investment. With the recent general election success of Abe’s LDP, we can expect to see the stimulus maintained.
Meanwhile, China and India are both still growing between 5-7% . But this rate is less than expected a couple of years ago. Brazil has also stalled; 7.5% growth in 2010 became 1% in 2012. Russia is struggling to avoid the word recession and the most recent addition to the so-called emerging economies, South Africa, has also fallen back to a rate of 2.5%. Hardly the rapid, dynamic growth expected a few years ago.
In fact, all the commodity based economies seem to be suffering. However, we should not lose sight of the inevitable short term variations. In the longer term, the emergent economies with come through with the growth.
Throughout this period the Internet has continued to grow in importance and, of course usage. Recent studies have suggested that GDP figures are under-recording its impact, as the new smaller businesses are not picked up in statistical surveys. The combination of Lubricants Technical issues with the Internet and Lubricants Marketing factors is set to keep us all challenged for some time to come.
As some of you may have seen, along with the new-look Bulletin, OATS has re-launched its website, focusing on complexity of the Lubricants marketing challenge. Please feel free to visit the new site and, as always, we are keen to hear your comments and suggestions by simply clicking here. We will now also be informing the 'Twittersphere' about any new articles that appear in the Lubes Resource Centre, so keep up to date by following us @Oats_Ltd.
Sebastian Crawshaw
Chairman, OATS