EM industry still struggling

Industrial production (IP) growth in the emerging world is very weak. In aggregate terms, EM output grew by just 2.0% y/y in August – the slowest rate of growth since the global financial crisis. The aggregate figure masks big differences between regions. (See Chart.) Industry in Emerging Asia is holding up reasonably well. But industrial production growth in Emerging Europe has slowed sharply, and output in Latin America has been contracting in y/y terms for most of the past year. Looking ahead, we expect some improvement in parts of the EM world, particularly those with strong trade ties to the US. In contrast, we expect growth to remain subdued in the BRICs and those EMs that rely on natural resources.