Economy

“Businesses remain darkly pessimistic across the globe. Sentiment hit a new record low in Asia last week and is close to record lows everywhere else,” said the latest Survey of Business Confidence of the World conducted by Moody’s Economy.com. “Hiring intentions have taken a decided turn for the worse in recent weeks and suggest that there has been no let-up in the massive global layoffs and rising unemployment in March.”

Confidence is very poor across all industries, particularly in manufacturing, where it's never been as bleak. For example, Eurozone manufacturing activity continued to plummet in January, falling by 3.5% from the previous month, when it dropped by a revised 2.7%. In year-ago terms it fell by 17.3% - the steepest fall on record.



As shown by Rebecca Wilder (News N Economics), retail sales are likewise anemic around the world.


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The World Bank has reduced its 2009 growth forecast for China from 7.5% to 6.5%, but indicated that the country’s economy was showing “early signs” of stabilization as government-sponsored investment mitigated the negative impact of contracting exports.

“In an era when exports may continue to shrink due to an external demand collapse and consumption may prove difficult to stimulate as deflation has arrived, fixed asset investment championed by the government would be vital for China’s economic growth this year,” said US Global Investors.

“Although corporate savings played a more important role in financing investment than bank loans in the recent cycle, credit expansion, which has accelerated rapidly since December, remains a key driver for public sector investment which is likely to dominate this year.”



It hardly comes as a surprise that the International Monetary Fund has cut its forecast for global growth this year from +0.5%/-0.5% to -0.5%/-1.0%. According to CEP News, the report said Japan’s economy will contract by 5.8% in 2009, that of the US by 2.6% and the Eurozone’s by 3.2%. In 2010, the US and Eurozone are expected to see anemic growth, and the Japanese economy is forecast to see a mild annual contraction in GDP.