Asian manufacturers, especially those in China and Japan, are beginning to feel the pinch from weak purchasing power here in the United States. A report in the New York Times highlights some of the attitudes and adjustments which shall be guiding world industrial output going through this year and into 2009. Prudent cuts are being made by Asian manufacturers across the board to offset costs, while demand growth is in decline.

It's not all doom and gloom however, depending on how you look at it. Chinese economists are actually feeling a bit of a relief from the slowdown in the face of their own inflationary pressures and indications are that merchandise inventories aren't yet getting bloated. This means that while industrial output might be cooling in the near term, available manufacturing capacity should remain relatively flush while the banks figure out the details of stinging money supply issues.

The hardest hit manufacturers seem to be in the low margin, high output operations. Textile manufacturers are feeling the brunt of the sluggishness first. What does it mean in the long term when shoe and t-shirt manufacturers might not be finding ready market for their goods and how will this translate moving upward into the higher end markets?

I see some things potentially happening here, which may bode well for the North American manufacturing block. First, low margin manufacturers shall probably enter into price wars later this year in an attempt to coral for themselves pieces of a waning market. The good news in the event of this happening is that consumers shall win if importers pass price reductions on down the line and the majority of these price wars will take place between manufacturers beyond our own shores.

At this point, your assignment may be as simple as paying down your debts, saving a significant portion of your income and not fearing the idea of buying your own home. Asian manufacturing interests shall continue to see contracting growth for the near future but you shouldn't fear that either. I don't think this particular situation is either good or bad. I think it's both inevitable and necessary.