China has just released its official year-on-year industrial production growth rate for November (4.8%, down from a peak of 7.7 % in March). November's data for US and EA (Euro Area*) industrial production are only available through October 2025. I have a function which estimates additional month(s) of data for a time series. It calculates the next month via three different techniques and uses the average of these three values as the forecast. I have thus been able to estimate an average for industrial production for China, the US and the Euro Area through November.
The chart plots the 6-month rate of change at annual rates in the unweighted average. These are the three largest economies/economic zones in the world, and allowing for Chinese overestimation of GDP, are roughly equal in size. The 6-month rate of change is slowing for all three zones: China peaked in March 2025, and has been decelerating since; the US peaked in June this year; and the EA in April this year.
Growth for the average of the 3 is still positive, just, but the trend is down. Note again the pattern: an accelerating recovery in the world economy from Q4 2024, fizzling out as Trump's tariffs disrupt economies and increase uncertainty.
How low can it go? Well, there is the powerful (lagged) influence of falling interest rates, which should be holding the world economy up, offset by the more immediate impact of the increased uncertainty and trade reductions of the tariff war. So we may see stagnation rather than recession.
*EA = Euro Area/Euro Zone, i.e., the countries which have the Euro as their currency.
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