04 November 2009 23:22 [Source: ICIS news]
NEW BRUNSWICK, New Jersey (ICIS news)--Forecasts about the US economy are overly pessimistic, as the recession has ended and growth has resumed, DuPont economist Robert Fry said on Wednesday.
"The worst recession since World War II is over, and we think this recovery is sustainable," Fry said at the DCAT/ISM Chemical Group Strategic Sourcing Summit '09, held in New Brunswick, New Jersey.
"US manufacturing production excluding the high-tech sectors has been up three months in a row and our forecasts are positive," he added.
Third-quarter US GDP came in at 3.5%, ending the recession, he said.
Fry said further growth is likely in the fourth quarter as well as 2010, ranging 3-4%.
"By historical standards, this is a weaker recovery, but we think people are too pessimistic. Companies have shut down plants and laid off workers on a large scale in greater proportion than cuts to output," Fry said.
"I think companies will find they have cut too far and, in early 2010, start hiring again. People are so pessimistic that they're going to be surprised with even a mild recovery," he added.
The economist said there is little chance the US economy will enter a second leg down in a W-shaped recovery.
"There will be no W. Some people believe the recovery so far has been led by inventory restocking, but I don't see that," Fry said.
"Some companies can't even get financing for working capital [to build inventories]. We are seeing actual real demand," he added.
While the US economy is on the rebound, Asia is leading the global economic recovery, Fry said.
"Normally the US leads the global business cycle, but it just hasn't happened this time. China, Korea, Taiwan and Japan are out in front," he said.
And the US economic upturn had little to do with the government stimulus package, according to the economist.
"I don't believe it accounted for the upturn," he said.
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