Economy
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/88625a45c0fe5ae5224b951cdad5a58c.jpg)
CRU Economics: Outlook Darkens Further Despite Positive Q3 Data
Written by Alex Tuckett
November 2, 2022
By CRU Principal Economist Alex Tuckett, from CRU’s Global Economic Outlook
Despite some slightly better-than-expected data for Q3, we have further revised down our forecast for 2023. We continue to believe that stubbornly high inflation, the energy crisis, and China’s domestic problems will lead to a sharp slowdown in world growth, with outright recessions in Europe and the US. What is more, higher frequency data (for example monthly PMIs) have deteriorated since the end of the third quarter, particularly in Europe and China.
China’s third-quarter GDP showed growth of 3.9% year-on-year (YoY), slightly above our forecast and well above consensus. However, the outcome of the party congress gave little reassurance that the zero-Covid policy will be eased, or that policy generally will become more growth-friendly.
Third quarter GDP data for Europe was more positive than expected. Germany in particular surprised with growth of 0.3%. However, we continue to expect the region to slide into recession this winter. Given that Europe could face tight gas supplies for years, we have downgraded the speed of recovery in 2023 in the industrial sector.
The US also saw stronger-than-expected GDP growth in Q3, of 0.7% quarter-on-quarter (QoQ). But core inflation rose again. More momentum and higher inflation mean the Fed must squeeze demand even harder. Furthermore, weak productivity growth since the pandemic sends a negative signal for growth in the medium run.
We have slightly upgraded our forecast for world GDP growth in 2022 to 2.9% (from 2.8% in our September GEO) but have downgraded 2023 growth to 1.4% (from 1.6%). We expect industrial production to grow by 3.1% this year (down from 3.3%) and 1.9% in 2023 (down from 2.6%).
Stronger data for China have led us to revise up growth in world construction output to 2.3% for this year (from 1.9% previously), but we have revised it down to 2.5% in 2023 (from 3.2%). We now expect global light vehicle production to increase by 5.8% in 2022 (up from 4.8%), and by 4.1% in 2023 (down from 5.4%).
This article was originally published on Oct. 31 by CRU, SMU’s parent company.
Request more information about this topic.
Learn more about CRU’s services at www.crugroup.com
Alex Tuckett
Read more from Alex TuckettLatest in Economy
Metalformers expect steady conditions in coming months
Metalformers expect economic activity to stabilize over the next three months, according to the recently released July Business Conditions Report from the Precision Metalforming Association (PMA).
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/construction.png)
Architecture Billings Index rises from 4-year low in June
The Architecture Billings Index (ABI) ticked up in June following May’s four-year low, according to the American Institute of Architects (AIA) and Deltek. While the index improved this month, it continues to indicate weak business conditions among architecture firms.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/07/FedRes.png)
Beige Book: Uncertainty to continue fueling slower economic growth
Growth in the US economy continues to be constrained. The Federal Reserve’s Beige Book report for July shows more areas reporting flat or declining economic activity than in its previous report at the end of May.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/AISI.png)
AISI, AISC, University of Massachusetts get ~$6.4M EPA grant
The American Iron and Steel Institute (AISI), American Institute of Steel Construction (AISC), and the University of Massachusetts at Amherst have received a grant to enhance emissions reporting for steel construction projects.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/12/empire_state_1-scaled.jpg)
Manufacturing activity in New York state continues to soften
New York state saw a continued decline in manufacturing activity in July, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.