Near The Sunrise

“Is the recession over?”, a vital question everybody is asking and yes, there is a positive answer! Most of Europe, America, England and Chi-India are busy preparing for the sunny days ahead, albeit in some darkness at the moment!

The German ministry of economy has revealed that the industry forecast showed growth just about 0% (yes, that is indeed positive) up from the last quarter. Der Spiegel backed the reports claiming that in this quarter the manufacturing sector registered 4.4% increase in orders and 5.1% growth in production. If the reports are true, then Germany is finally getting over the worst nightmare since WW-II. Of course, the rise will not be that smooth, and experts have warned to stabilize it first. On 7th of July, after the news broke up, German share market reacted with rejoice going all the way up! The boost in steel industry and confidence in medium size businesses are also need to be remarked.  Business analysts have accredited the growth to outside of Europe, especially Asian markets, because the purchases from outside EU is considerably higher than domestic.

The reports in U.K. are also suggesting that the economy stagnated in the second quarter, worth better than shrinking. Some naysayers argue that this might not be enough to point recovery, because industrial production in England fell sharply in the same quarter, contrary to predictions. For them, the recovery will come early next year with growth of about 0.7%. British Chamber of Commerce (BCC) also warned against a “W” shaped pattern, a sudden fall after steady growth. In America, a bull run at the share market has always been confusing. A chief analyst in an American investment firm mentioned that the worst might be over, but we are still in recession. Another analyst pointed out that key indices like good orders, share prices, building permits, and several others have shown sharp increase in the month of May. And that according to him warrants a recovery claim in American markets. The unemployment rate has steadied after a historical peak few months ago, and housing is still considered a cheaper commodity providing signals for better estimates ahead.

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China has been rock solid in fighting against global recession. Recently, world bank upped its predictions for China to 7.2% as against 6.5%. Auto sales in China increased whopping 14% to much of world’s surprise. Somewhere around last year, the housing prices dropped in China responding to the recession, but this February has seen dramatic 27% increased selling in residential floor space. Steel prices were steadily rising with beginning of December 2008 after dropping about 60%! This might well suggest the level of confidence to some extent. Additionally, the $582 Billion dollar stimulus package will also bring in some joy to cement, roads, airports and power industry.

In India, the story is much brighter. The industrial production showed signs of growth in second straight month. Figures released by Index of Industrial Productions revealed that manufacturing sector grew by 2.7% in May, and 1.2% in April with the Year-On-Year basis. Current budgedary amendments were indeed posed as stimulus package and it will have significant effect on economy in the coming months. But delayed monsoon affecting agricultural output must also be taken in account. CRISIL, a credit ranking institute, has awarded the recovery to increased government spending, in terms of employment creation, sixth pay commission, etc. In 2009/10, the much hyped National Rural Employment Guarantee Program (NRGEA) is expected to bring some cheers to the rain marred farmers. The industry forcasters are crossing their fingers for accumulated 4.7% growth in manufacturing and 7.4% in GDP (way too much!) for the year 2009-10!

Read more on the same topic:

1. RBI unveils market-shocker!
2. Are We There Yet?
3. Before Sunrise
4. Subprime Simplified-II
5. Economy Recovering ???