Industrial companies from Caterpillar to Norfolk Southern have felt the effects of the China economic slowdown and the knock-on effects it is having on commodities.
The days of double digit Chinese economic growth are clearly over. And as policymakers look to shift from an economy based on rapid credit expansion and heavy investment in infrastructure to one based on consumer demand, miners, their industrial suppliers and some transportation firms have had to adjust.
“The steadily sliding rate of GDP growth since 2009 highlights just how tired the model for economic growth founded on capital spending has become,” wrote Pictet Asia strategist Laurent Godin in a report. The Swiss asset manager predicts a more modest 6 percent to 7 percent growth from here and that weaker growth is sending reverberations through the commodities space.