Figures suggest that with Chinese demand for imports falling by 14.8% over the first seven months of 2015, the loss in trade to countries around the world now amounts to something like $286billion.
The UK has lost around $3.61bn worth of exports to China, while the losses felt in Germany and the US are significantly greater at $14.2bn and $11.9bn respectively. But, while the UK is less exposed, the impact on key industries such as automotive, precision engineering and machinery could be significant should the economic and financial traumas of the past few weeks continue into the autumn.
Britain’s manufacturers have started to cut headcounts for the first time in two years and there is growing uncertainty about the outlook for exports, as a result UK manufacturers are continuing to rely on the domestic market as export business continues to contract.
It’s not all bad news for the UK, though. Falling oil prices and market fluctuations mean that inflation is falling keeping interest rates low. It looks like the first rise in rates is likely to be put back to early 2016.
The big fear for UK plc, according to Lee Hopley, the EEF’s chief economist, is that beyond the impact on exports and the manufacturing supply chain, will be the effect on ‘already-delicate confidence levels’.
Christine Lagarde, head of the International Monetary Fund, has said that economies need to be vigilant to handle potential spillovers from China’s slowdown and the tightening of global financial conditions.
The UK’s electronics industry continues to perform well and remains positive about the future. Innovation is alive and kicking and companies have been more confident on the back of an improving economy.
Whatever the next few months hold, though, it is vital that companies still invest, innovate and deliver new products and applications – a sample of which can be found in our latest selection of leading products for electronic design engineers.
