Japan economy shrinks more than expected as supply shortages hit
Tokyo - Japan economy shrank much faster than expected in the third quarter as global supply disruptions hit exports and business spending plans and consumer sentiment soured by COVID-19 cases.
While many analysts expect the world third-largest economy to rebound in the current quarter as virus restrictions ease, worsening global production bottlenecks pose a growing risk to export-dependent Japan.
"The contraction was much bigger than expected due to supply chain constraints, which hit auto output and capital expenditure hard," said Takeshi Minami, chief economist at Norinchukin Research Institute.
"The economy is expected to rebound in the current quarter, but the recovery will be slow as consumption has not made a good start since the relaxation of COVID-19 control measures in late September."
Preliminary gross domestic product data released on Monday showed the economy contracted at an annualized rate of 3.0 percent in July-September after a revised 1.5 percent rise in the first quarter, much worse than the median market forecast of a 0.8 percent contraction.
The weak GDP figures contrast with more upbeat data from developed countries such as the US. The U.S. economy grew 2.0% in the third quarter, driven by strong pent-up demand.
In China, factory output and retail sales unexpectedly rose in October despite supply shortages and new COVID-19 containment measures, data showed on Monday. On a quarterly basis, GDP fell 0.8%, versus market expectations for a 0.2% decline. Some analysts say Japan heavy reliance on the car industry means its economy is more vulnerable to trade disruptions than other countries.
Fumio Kishida, Japan prime minister, plans to unveil a massive "trillions of yen" stimulus package on Friday, but some economists are skeptical about its impact on growth in the short term.
"The plan is likely to be a mix of short-term and long-term growth measures and the focus is likely to be vague, so it will not have much impact in the short term," Norinchukin Minami said.
Consumption fell 1.1 percent in July-September from the previous quarter after rising 0.9 percent in April-June. Capital spending also fell 3.8 percent, after rising a revised 2.2 percent in the previous quarter. Domestic demand subtracted 0.9% from GDP growth. Exports fell 2.1% in July-September from the previous quarter, hit by chip shortages and supply chain constraints. With exports still grim, Japan economy is likely to experience moderate growth after the second quarter, at an annualized rate of about 1% to 2%, even taking into account the impact of stimulus measures.
Japan economy shrinks more than expected as supply shortages hit, will this has an effect on fag bearing price?
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Due to changes in consumer demand, import and export conditions, and various investigations on the development of fag bearing, the cost of fag bearing is constantly changing. Taking into account the current market macroeconomic parameters, value chain analysis, channel partners, demand and supply, the cost of fag bearing will also be affected to a certain extent. It is estimated that the cost of fag bearing will increase slightly from next month.
The price of fag bearing continues to be affected by factors such as market decline momentum, various opportunities and challenges. However, during the forecast period from 2022 to 2025, the global fag bearing sales market is expected to continue to be above average. The growth rate will continue to increase. It is expected that In the second half of this year, the price of fag bearing will increase to a certain extent.
The market trend of fag bearing
The cost of raw materials is still the biggest concern for manufacturers. Raw materials account for approximately 60-62% of bearing manufacturers revenue. The price of raw materials for bearings fluctuates continuously according to market economic conditions. Such fluctuations in raw material prices are becoming a real challenge for companies to maintain competitiveness and ensure sustainable profits. As high-grade steel and alloy steel are the main raw materials used to manufacture fag bearing, bearing prices are highly correlated with global steel price trends. Therefore, fluctuations in the price of raw materials have brought challenges for bearing manufacturers to compare prices and quality to manufacture bearings. In addition, the bearings require regular maintenance to avoid failures and extend their service life, which further increases maintenance costs. Therefore, factors such as raw material price fluctuations and regular maintenance costs are expected to hinder the growth of the bearing market.
The market demand of fag bearing
The global bearing market value in 2020 is 123.34 billion U.S. dollars and is expected to reach 153.62 billion U.S. dollars by 2027, and the compound annual growth rate will also increase steadily.
A bearing is a mechanical element that supports relative movement and helps reduce friction caused between moving parts. Bearings are widely used in various industries such as automobiles, wind turbines, construction machinery, mining machinery, agricultural equipment, and machine tools. It is used in automobiles to ensure smooth driving of automobiles, electric vehicles (EV) and other types of vehicles (such as light commercial vehicles and heavy vehicles such as trucks). Due to the increasing utilization of bearing fag bearing in various end-use industries, rolling mills and electric vehicles, the global fag bearing market has become more and more important. The development of technology has improved the overall efficiency of bearing products in the field and extended the product shelf life.
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