Slow growth expected in 2011

    According to PMMI’s Fourth Quarter 2010 Economic Outlook, the current economic recovery   is sustainable. Although the report foresees the rate of recovery to slow noticeably in the coming year, expectations are that growth in continue.

    The report continues stating, that leading macroeconomic indicators all suggest continuous recovery through the remainder of 2010 and 2011. Although three are signs of slower growth next year, most notably from the United States Leading Indicator and the Purchasing Managers Index, however the report states there is no clear evidence to support a double-dip recession.

    The U.S. Leading Indicator has fallen steeply since it peaked in March. The drop resulted from recent     stock market “roller coaster rides,” declines in building permits and faster supplier deliveries.

    The Purchasing Managers Index is also in steep decline off a December 2009 high. The monthly index has fallen each month since April, but has maintained the growth range. New orders, production, and in particular manufacturers prices have seen the most prominent decline.

    From November 2009 to July 2010, the Money Supply was flat for nine months with zero change, that sluggish growth has not yet acted as a brake on Industrial Production, but is one reason for the expectations of slower growth in 2011.

    The Industrial Production Index moved in growth mode in July, and is continuing the ascending trend. This index is up by 0.8 percent over this time last year (2009), and leading indicators and internal dynamics point towards continued growth through the end of the year (2010), up until a slowdown in 2011.


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