More industrial companies are claiming that their sales are slowing down in China which threatens the three-year strong run for U.S. industries. The great potential of the Chinese market now turned into a threat for some companies because of the country's slowing economic growth.
Companies globally were attracted to the market of the Asian country with around 1.4 billion people. Most rushed to make deals to sell almost everything from machinery to basic commodities. China had increased its appetite for world-class consumer goods and infrastructures. The United States Census Bureau reported that the U.S. export to China doubled in a decade through 2017 reaching $130 billion a year.
According to Keith Jackson, chief executive of ON Semiconductor Corp., said recently that China is weaker than normal and it is also weaker than its seasonal reports.
In October, Caterpillar Inc. and #m Co. announced their concern over the slowing economy of China which started the selloff trend in shares and the broader U.S. industrial sector. The two companies contribute a tenth of the U.S. sales in China. The two companies are scheduled to report their latest earnings this coming week.
According to H.B. Fuller, an industrial glue maker which makes about 13 percent of its sales in China, said that weaker demand in China slashed $10 million of its profit in 2018 and it would likely reduce its profit by $20 million this 2019. James Owens, chief executive of H.B. Fuller Co., said that the weakness in China is worse than their estimate.
The PPG Industries Inc. reported that its car coating services in China dropped by 15 percent in the fourth quarter. Stanley Black & Decked Inc., a toolmaker firm, projected that China and most of the rest of the world will face slower economic growth this year.
The slowdown in demand in China also affects smaller U.S. firms. The Chicago tannery Horween Leather Co., that exports around 40 percent of its quality leather luxury shoes and luggage in China and other parts of the world said that their sales declined by about 10 percent in 2018. The company's president Skip Horween ordered its production to slow down and reflects the lower demand.
On the other hand, other manufacturers claim that their business remains strong. The Illinois parts maker, Atlas Tool Works, said that their orders increased by 15 percent. The company has around 70 employees and it has about $ 9 million in annual sales.
