Spring shoots of global economic recovery?

Spring shoots of global economic recovery?
Published: 
March 2012

There’s been a steady stream of economic doom and gloom on the global scene for over two years now and, although Australia has weathered well overall, we are part of the global economy, so what happens to our trading partners impacts eventually on us.

So, with spring in full swing, it’s time to look for some green shoots of optimism among the global economic figures. Is it the end of the downturn or the end of the beginning of the downturn? Or none of the above? Only time – and analysis – will tell.

IN THE US

September US jobs report: unemployment down to 7.8% for first time since 2009.
US GDP expanded at the rate of 2% in third quarter of 2012, more than the 1.8% projected.
Residential construction is up 14.4%, suggesting a bottoming-out of the housing slump.


IN EUROPE

The UK’s official GDP figures are up 1% in the third quarter 2012, after 9 months of continuous contraction. (However, few believe this is anything more than an aberration.)
The cost of borrowing in Italy and Spain has dropped over the last three months, with ten year treasury bonds falling from 7.5% to 5.3% in Spain and by a similar amount in Italy. Are traders beginning to believe that the Eurozone is getting serious about fixing the crisis?

IN CHINA

Per capital disposable income is up 13% in the first 3 quarters of 2012 and year-on-year retail sales are up 14.2%, suggesting a growth in domestic consumption.
China’s industrial production rose by a more-than-expected 9.2% in September from a year earlier, and up from 8.9% growth in August.

IN AUSTRALIA

Super Saturday auction rate clearance shows the best sign of a market revival in 2 years. Sydney’s clearance rate was up 13%, at 68% compared to 55% in 2011. Melbourne’s clearance rate was 66%. Australia’s AAA credit rating confirmed by Fitch – now one of only 3 countries with a top credit rating from Big 3, Standard and Poor, Moody’s and Fitch.

ON THE OTHER SIDE OF THE SILVER LINING

If you want to retain your spring-like economic optimism, don’t follow these links….

The Economist’s Global Debt Clock

The International Monetary Fund’s Report, October, 2012
‘World Economic Outlook (WEO), Coping with High Debt and Sluggish Growth’