Q1 2025 Global Economy: Manufacturing Slows, Export Risks Grow
- CUPS Realty
- Apr 29
- 2 min read
Updated: 5 days ago
In the first quarter of 2025, global business sentiment turned tense and cautious.
Persistent high interest rates, slowing manufacturing growth, and rising currency volatility pushed companies to prioritize cash flow and financial resilience.
Large corporations are adapting faster, while SMEs face growing funding challenges.
Tight credit conditions and weak recovery signals are reshaping survival strategies worldwide.
United States: Manufacturing Weakens, Rate Cuts Postponed
In March, U.S. manufacturing PMI dropped to 49.8, slipping below the expansion threshold.
Despite resilient service sector demand, the Federal Reserve kept rates at 4.25%–4.5% and maintained a cautious stance on inflation.
Hawkish comments from Fed officials in mid-April shattered market hopes for mid-year rate cuts, triggering a nearly 1,000-point drop in the Dow Jones (AP News).
While recession has not been officially declared, businesses and investors are operating in a fragile and uncertain environment.
China: Exports Rebound Amid Rising Currency Risks
China’s exports grew 6.9% year-on-year in Q1, reaching RMB 6.13 trillion, driven by high-value goods and emerging markets.
However, increased RMB volatility has heightened settlement risks for exporters, especially SMEs operating on thin margins.
Relying solely on higher shipment volumes is no longer enough; companies must actively manage currency risks to protect profits.
Corporate Trends: Cash Flow Over Expansion
Persistently high borrowing costs are reshaping corporate strategies.
Large firms, backed by strong balance sheets and credit access, are optimizing debt structures and preserving liquidity.
In contrast, SMEs face stricter lending standards, forcing them to cut spending and delay expansion plans.
Across sectors, “cash first, growth second” has become the new norm as businesses brace for prolonged financial tightening.
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