This post is a guest contribution by Rebecca Wilder*, author of the of the News N Economics blog.
The 2009 global economy is still contracting quickly, as shown by key Q1 GDP reports. However, there are some glimmers of hope that are emerging, like industrial production in Japan got a bump in March and German and US survey reports show some signs of relief. However, the light at the end of the tunnel is still very dim – even the positive indicators remain very much in negative territory.
The good: Japan’s Industrial Production rose 1.6% in March
The chart illustrates the preliminary figures for Japanese Industrial Production through March 2009. The 1.5% bump is certainly a relief; however, production levels remain down over 35% since last year. Baby steps, I suppose.
More good: Survey reports in Germany and the US rebound
The chart illustrates the Germany Ifo business climate survey and the Conference Board’s consumer confidence survey through April. The German Ifo survey rose to its highest level in 5 months. However, businesses contend that inventory liquidation is imminent, and therefore, new production is not. Likewise, the US consumer confidence survey surged in April, consistent with yesterday’s reported 2.2% gain in consumer spending. However, it is prudent to note that this survey is still very low, and so too is consumer demand.
The bad: Annual export growth remains on red alert
The chart illustrates annual export growth through March for Switzerland and Thailand, and through February for the Philippines. The noteworthy observation here is: annual export growth slowed in Switzerland and the Philippines, which is like warm news at best, given that their growth rates are double digit negative.
The ugly: GDP falling precipitously in Q1 2009
The chart illustrates GDP growth in Q1 2009 (on a year over year basis, which means Q1 2008 to Q1 2009, not quarter over quarter, or Q4 2008 to Q1 2009 … easier to compare) in South Korea, the US, and the UK. The figure speaks for itself: the economic contraction worsened in Q1 2009. Each economy is setting records, especially in Korea.
Overall, hope that key economies are no longer in free fall is emerging; however, the economic decline is ongoing.
Source: Rebecca Wilder, News N Economics, April 30, 2009.
* Rebecca Wilder is an economist in the financial industry. She was previously an assistant professor and holds a doctorate in economics.