Wool to have marginal growth worldwide in 2009
Source: Australian Wool Innovation Limited Date: 2008-07-07
An update of economic conditions at the start of the second quarter by the IMF research department predicts a deceleration in global economic growth for 2008, compared to its forecasts made earlier in the year. The IMF expects global growth in 2008 to slow 0.5% lower than the forecast made in January 2008.
The worsening market conditions and the growth standstill in the US have affected economic activity in other advanced economies, especially in Western Europe due to financial turbulence and trade spillovers. The potential impact of softening house prices and inflationary pressures are other sources of concerns for consumers.
Slowing growth in the advanced economies is in itself is likely to have some impact for apparel wool consumption. According to Woolmark estimates these economies together account for 55% of global apparel demand.
So far emerging economies have been more resilient and are in a better position to weather the global slowdown. Such economies have continued to grow at a rapid pace, led by India and China - both major buyers of Australian greasy wool and exporters of wool apparel to the major advanced economies.
The momentum of growth in India and China will likely moderate in 2008 but may be sustained through productivity gains and some insulation from rising global commodity prices from their own commodity resources. Their domestic apparel consumption is less at risk.
The IMF is expecting world growth to show a marginal pickup in 2009, reflecting the time required for financial institutions and households to resolve their ongoing problems in the advanced economies. There will be some improvement in growth forecasts in 2009 for the US and Japan but the euro zone (hindered also by a high euro) and the UK are expected to deteriorate, compared to 2008 estimates.
