Archive for March 2011

The economy is steadily growing

March 19, 2011

The CEO confidence index in the USA shows an upward trend. Revenues and profits are expected to grow strongly over the next 12 months. Capital spending and hiring new employees are expected to grow, too, but with a slower pace. We have seen also strength in some European countries like Germany, Poland, and the Nordic region. China and India as well as Russia are growing. It sounds not too bad. There are certainly many elements which influence the development and can cause counter effects as well like higher oil price makes logistics and manufacturing more expensive, but helps oil producing countries to grow, and fuels western economies to develop alternative energy sources more eagerly. I’m very confident that 2011 and especially 2012 are going to be good business years. I will make a prediction that employment figures and the number of new jobs generated will increase more and more rapidly towards 2012. In Germany there is already a shortage on labor.

When looking at business cycles I remember the graph developed by George Tritch in 1910. He has been right most of the time – only WWII was an exception. A projection of his graph predicts an economic peak around 2019. If he is right at this time, we might see a longer period of steady growth in global economy. There are certainly going to be some hick-ups and short downs down the road, but I’m confident on this, too.

What causes question marks are political uncertainties in various countries like North Africa, situations caused by nature (Iceland, Japan), or countries not controlling their spending and falling into a debt which they cannot handle by themselves. Then there are currency issues which I have discussed earlier. Despite of these I’m now a firm believer of a positive economic development worldwide.