Global economic growth stronger than expected

02 July 2007 18:56  [Source: ICIS news]

WASHINGTON (ICIS news)--Growth in the global economy is stronger than anticipated and should help sustain US industry with export trade despite weakness in the key US housing sector, manufacturing economists said on Monday.

 

“The broad swath of recent data reveals that the peak phase of an historically strong global expansion will continue for a longer period than most forecasts anticipated,” the Manufacturers Alliance said in its quarterly economic outlook.

 

“Signs of moderation in Chinese growth have, for the most part, reversed,” said alliance economist Cliff Waldman, adding that “Key Euro zone countries, especially Germany, are growing faster than expected and there is finally some momentum in Japanese consumer spending.”

 

Waldman also noted that “Emerging Asian nations appear to be recovering from an investment slowdown and manufacturing growth in India has been north of 11% for three consecutive quarters.”

 

He said that North America is the only exception to the ongoing cycle of global strength, chiefly due to weakness in the US economy.  “While there have been recent signs of improvement in the US economy, the housing situation remains a significant risk,” Waldman said.

 

The US housing sector has been in decline since mid-2005 and is not expected to mount a recovery until early in 2008.  The housing sector is a major downstream consumer of chemicals and chemicals-based products.

 

Despite worries over the domestic housing segment, the alliance said US exports of goods and services are likely to improve with the new year.

 

The quarterly report said growth in US exports of goods and services is likely to slow from its 8.9% climb in 2006 to 6.4% this year.  However, Waldman said that as growth improves in both industrialized and developing countries, “total US export growth is forecast to accelerate to 9.4% during 2008”.

By: Joe Kamalick
+1 713 525 2653

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