Positive signs for 2010 metalworking biz in Asia

The global recession resulted in a sharp drop in internationaltrade, rising unemployment and slumping commodity prices,the worst since the Great Depression in 1930s. In December2008, the National Bureau of Economic Research (NBER) declaredthat the United States had been in recession since December 2007.Several economists have predicted that recovery may not appearuntil 2011. The global financial crisis was able to dent demand throughthe end of 2008 and early 2009, due to credit difficulties thatdetermined global banks to hoard what was left from their liquidityand refrain from giving loans. This had a negative affect on worldtrade, since companies lacked the ability to access money, obligingmany to start reducing their productivity and investments. On the other hand, the recession in which many worldeconomies fell victim to, determined them to reduce demandon various exports. Thereby, corporate profits started fallingconsiderably while banks started to fear many companies inabilityto cover their loans, just like what happened with the giant carmanufacturer GM, which ultimately went bankrupt. The Asian economies were the rescue vessel for the globaleconomy in 2009 and the starting point from where the world triedto overcome the global financial crisis. Now after the Asian regionfulfilled its role gracefully in 2009, everyone awaits to see the nextstep for this region, and whether we will see a change in the globaleconomic map in 2010. According to the International Monetary Fund (IMF), the global recession has already ended due to strong publicpolicies and resurgence in Asia, but a subdued recoverylies ahead. With the economy recovering, the key challenge for policymakers next year will be deciding when to start raising interest ratesand unwinding emergency lending to banks, the IMF said. Whilea premature exit could pose a significant threat to the recovery,waiting too long could stoke asset bubbles in faster growingemerging economies. In the rich est nations, conditions canre main accommodative for an extended period because inflation islikely to remain subdued as long as output gaps remain wide.In some emerging economies, conditions may need to betightened earlier and more flexible exchange rates could helpsmooth the process. Meanwhile, HSBC Holdings Plc raised its 2010 economicgrowth forecast for Asia, excluding Japan, to 7.6% from 6.9%, ledby faster expansions in China, South Korea and Singapore. Growth has roared back in Asia, with domestic demand firingon all cylinders and exports accelerating too. China will expand9.5%, faster than an earlier forecast for 8.5%. Hong Kong抯 growthestimate was raised to 3.8% from 2.4%. South Korea will grow 4.6%versus the 3.6% estimated previously, and Singapore will expand6.5% compared with 5.3%. Heading into 2010, there are good signs in the marketplace.Here抯 what various metalworking industry players in Asia think: Positive customer response Oliver Zimmerer Application Engineering Manager, Walter (Thailand) Co. Ltd

"We are continuously developing new products even if there is a crisis; there抯 no reason to stop the R&D, otherwise we will fall behind."

Customer demand is starting to pick-up. Its fragile but it抯going up already. For 2010, we expect wide positive response fromthe market. In the end of 2009, we see it slowly picking up. And Iguess the efforts we did in 2009 with our customers, looking at theirfactories, what to improve, what can be improved, and what can bedone to increase productivity, I expect to get the pay off this year. The trend now is to reduce costs and increase product efficiency.We are continuously developing new products and we cannot stop evenif there is a crisis there抯 no reason to stop the R&D, otherwise we willfall behind. We believe that this will pay off when theNike Zoom Kobe IV