Global Factories

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Is your job being affected by the global meltdown? Tell us your story at yourstory@bworldmail.com A world manufacturing slump eased in January but data showed the global economic downturn, which Beijing said had already cost as many as 20 million jobs, was still in full swing. The biggest improvement seen in a raft of economic reports released on Monday was in the Institute for Supply Management's index of US factories, which climbed to a still-anemic 35.6 in January from 32.6 in December. European and Chinese surveys also edged higher. Yet the outlook for US consumer spending, which accounts for two-thirds of the world's largest economy, remained bleak. Spending rose just 3.6 per cent in 2008 as a whole, the smallest increase since 1961. Against that backdrop, analysts said it was difficult to envision any near-term rebound in global growth. &quot;With incomes falling and confidence shattered, we have to expect spending to keep falling for some months yet,&quot; said Ian Shepherdson, chief US economist at High Frequency Economics in Valhalla, New York. With that in mind, US President Barack Obama called Democratic congressional leaders to a meeting on Monday to drive home his message of urgency in passing an almost $900 billion economic stimulus package. Chinese Premier Wen Jiabao was also urging that strong and effective stimulus plans be enacted to boost economies hit by the global financial crisis. Inkling Of Stabilization Like the ISM survey of US factories, surveys of manufacturing companies in Europe and China suggested at the very least that things were not deteriorating as rapidly as in previous months. In Europe, a survey of about 3,000 manufacturers showed that, of the euro currency zone's leading four economies, only Germany registered a deepening contraction in January. France, Italy, and Spain all saw some slowing in the pace of decline. The Markit Eurozone Manufacturing purchasing managers' index for January rose to 34.4 from 33.9 in December, the eighth month in a row the index was below 50.0, which separates growth from contraction. A similar purchasing managers' index on China, produced for brokerage CLSA, rose to 42.2 in January from 41.2 in December, indicating conditions were deteriorating but at a slower pace. China's Wen also pointed to signs of recovery. &quot;During the last 10 days of December, it started to get better,&quot; Wen told a business audience in London. &quot;The goods piled up in port started to decrease and the price of industrial products started to rise.&quot; But data from the United States showed consumers cut spending for a sixth straight month in December and their incomes shrank. All the bad news was keeping global stock markets under pressure. The Dow Jones industrial average was off 1.35 per cent or 108.24 points, while the FTSEurofirst closed down 2.44 per cent. Jobless By The Millions Chen Xiwen, director of China's Office of the Central Rural Work Leading Group, said a recent survey showed 15.3 per cent of the 130 million migrants moving from villages to cities and factories had returned jobless to the countryside. That, combined with this year's 6 million to 7 million new entrants in the rural labor market, would leave China with about 25 million jobless and potentially restive rural unemployed this year, Chen said. Job losses were severe in the United States as well, where another employment report due out Friday was expected to show an additional half-million positions were cut. On Monday alone, Macy's Inc said it would slash about 7,000 jobs, about 4 per cent of its workforce, and cut its quarterly dividend. Meanwhile, the Wall Street Journal reported Morgan Stanley would cut 3 to 4 per cent of its work force, or somewhere between 1,500 and 1,800 jobs. A reeling US economy meant pain for overseas markets as well. South Korea reported its biggest-ever plunge in exports and a slide in the value of the rouble highlighted the dramatic change of fortunes for oil-rich Russia, where thousands took to the streets over the weekend over deteriorating conditions. The Russian protests follow protests across several European countries in recent days and weeks, from Latvia and Bulgaria in the east to France, where upward of a million marched on Friday. In South Korea, home to some of Asia's top manufacturers and exporters, a 32.8 per cent year-on-year drop in exports in January raised the specter of the first recession in more than a decade. &quot;The fall was really shocking,&quot; said Jun Min-Kyoo, economist at Korea Investment &amp; Securities. India also showed more signs of the impact of the global crisis. Manufacturing activity contracted for the second month in a row in December, when exports also fell from a year earlier for the third straight month. The global downturn started with a US housing market slump that sparked a crisis in debt-derivatives markets and wiped out nearly $14 trillion in global stock market value last year as banks ran into trouble, requiring government bailouts. The financial crisis has in turn triggered recessions in all of the big industrialized economies, sharp slowdowns elsewhere and put millions of jobs on the line. (Reuters)