Antonio Rosset, Commercial Director of Leeco Trading, regularly watches large economies within regional markets for insights on overall market direction.
“As the largest economy in South America, Brazil’s market outlook can indicate the direction of the overall regional market,” said Antonio. “With economists predicting strong economic and manufacturing growth in Brazil this year, we can expect to see growth in the South American and Latin American region during 2020. Leeco Trading is prepared to meet increasing raw materials demand during this growth period as importers look to control costs and offset risks.”
Recent economic news points towards mixed manufacturing and economic conditions across regional markets.
Manufacturing growth in Brazil increased during the first month of 2020, marking the sixth straight month of expansion. With many policymakers and economists expecting Brazil’s 2020 GDP growth to be the highest rate since Brazil’s 2016 recession, experts say the expanding manufacturing sector is a positive sign for the overall economy.
Mexico’s economy shrank 0.1% during 2019, the first annual contraction since the global financial crisis in 2009. Manufacturing activity, which decreased 1.7% last year, helped fuel the contraction. Domestic investment was also down 5.2% during the first 10 months of 2019 among uncertainty over President Lopez Obrador’s economic policy. Mexico’s economy is expected to grow in 2020, however, due to the expected ratification of USMCA and implementation of major infrastructure projects.
As China struggles to contain the deadly new coronavirus, experts predict the disruption to the Chinese economy will spill over to the rest of the world. The world economy is predicted to see growth about 0.4% lower than expected in Q1 2020 due to the virus. Australia and Brazil, both commodity exporters to China, may see growth 0.3% below what it would have been without the virus. South Africa and Mexico are also expected to see growth about 0.15% and 0.5% lower than expected, respectively.
South Africa’s manufacturing output fell 5.9% year-on-year last December – the largest drop since 2014 – after falling 3.2% in November of 2019. Factory production was down 2.8% in December, and production fell 0.3% in the three months before December.