Are we about to hit an economic free fall? JCB, a construction machinery firm based in the UK announced that it is cutting 400 jobs around the world. JCB says this is due to a business slowdown in China, Russia, and Brazil – which also happen to be 3 of Earth’s largest economies.
From Business Insider:
This is a horrible sign for three of the biggest economies in the world.
“In the first six months of the year, the market in Russia has dropped by 70%, Brazil by 36% and China by 47%,”said JCB CEO Graeme Macdonald in a press release.
“Parts of Europe are also struggling, with France down by 26%,” he added. “Even the strong growth in the UK and North America has softened due to a fall in market confidence over the summer, which has been prompted to an extent by low oil and commodity prices in countries which depend on these resources to drive economic growth.”
JCB makes construction and agricultural machinery and competes with US rival Caterpillar for much of that business. Caterpillar said in its second-quarter earnings statement that continued economic weaknesses in China and Brazil “haven’t helped confidence.”
Brazil, Russia, and China were all countries that consumed and exported a ton of commodities like steel, copper, and oil. Commodities prices started falling at the end of last year. The Bloomberg Commodities Index has fallen by almost 26% over the last year.
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