Strong U.S. Economy sends ripples across the world, WSJ reports

The U.S. economy is booming. This is sending ripples across the world and also increasing overseas investments in the U.S. or close to the nation to avoid the supply chain bottlenecks that have recently been seen on an unprecedented scale. According to an article in the Wall Street Journal, the surging demand from America is drawing investment from overseas. Supply chains are working at a higher speed to keep up with the demands and prices are rising.

American expansion has also led to investment in America as many companies believe that the growth is increasing and the U.S. economy will outpace other world economies. Both raw materials and manufactured goods are much in demand as the American consumer has trillions of dollars to spend, which were given to them as stimulus, during the pandemic.

The Journal also quoted early output estimates from the Federal Reserve Bank of Atlanta. Data reported by the fed says that the U.S. economic output is expected to increase by 7 percent annualized, in the last quarter of the year. This is a 2 percent increase from the previous quarter.

JP Morgan Chase has said that the annualized growth in the eurozone is estimated to be roughly two percent for the last quarter of the year while China is expected to see about 4 percent growth in the same quarter.

The WSJ also reported that the U.S. has seen an increase of roughly 45 percent in consumption of durable goods when compared with 2018. According to data from the ECB, the consumption of consumer goods has seen a small increase of only two percent in the eurozone.

Major U.S. ports have processed more containers than other ports around the world. The nation’s ports unloaded about 20 percent more container volume when compared with the containers processed in 2019. In a sheer contrast, Rotterdam and Hamburg reported flat levels or even lags when compared with 2019.

The WSJ also noted that investments from overseas companies are also increasing. Siemens Gamesa Renewable Energy SA, which is headquartered in Spain, is planning to invest $200 million to build offshore turbine blades in Virginia. Meyer Burger Technology, a manufacturing company based in Switzerland, is planning to build its first solar modules factory in the U.S. by end 2022.

These are first among the major companies that have begun investing in the U.S. as there is a strong market for goods and products. The firms also believe that such investments can avoid bottleneck supply chain issues in future. Companies are moving away from congested ports and rising transport costs in China. It makes fiscal sense to manufacture close to consumer demand and companies are now considering several factors as they make new investments including supply chain, transport costs, demand and supply and more.


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