The Global Economy Is Not As Strong As It Looks

July 24th, 2015

We hear a lot of talk about the American economy bouncing back from the 2008 meltdown, and that talk has some substance to it. But the United States is part of a global economy, and that economy seems to be unraveling. The main reason the global economy is on shaky ground is China. China GNP is still increasing, but it’s not increasing as fast as it has in the past. Caterpillar, the world’s giant supplier of heavy machinery, reported bleak sales figures. Caterpillar product sales were down around the globe. That means big construction companies and governments, the buyers of heavy equipment, don’t have the confidence in the economy to purchase them, and that’s an ominous sign.

Susan McGalla, the Director of Strategic Planning and Growth for the Pittsburgh Steelers and expert consultant, keeps a close eye various brand, the supply chain, and organizational development for retail and other clients. McGalla has noticed that China is going through a major change. The price of China exports has increased, and there is more production space available than ever before. That just confirms what Caterpillar is experiencing.

The Caterpillar report shows that sales in Asia are down 19 percent, and Latin American sales are off 50 percent. Construction sales were off 22 percent in Asia and 55 percent in Latin America. There’s no doubt that the global economy needs help, but no one is sure what that help should look like.

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