James Saft is a Reuters columnist. The opinions expressed are his own.
HUNTSVILLE, Ala. — If you thought you’d found someplace that was insulated from the economic weakness coming from the U.S. and Europe, well, chances are you are wrong.
Around the world, manufacturing is taking a hit, and the rate of slowing and the suddenness of the move pose a threat not just to the economy, but to financial market valuations.
Take Canada, long held up as a model of economic and financial system management, and supposedly well positioned due to great demand from emerging markets for its natural resources.
Well, Canada’s economy actually shrank at an 0.4 percent annual clip in the three months to July, data on Wednesday showed, the first such fall since the last recession. Exports fell by 2.1 percent from the previous quarter.
While wildfires and an auto manufacturing slowdown linked to Japan’s recent natural disaster played a substantial role, that may not be the whole of the story. Growth returned in June, possibly because the automotive industry recovered, but manufacturing as a whole was down in the month.