Green Shoots Are Here: World Economic Indicators Are Improving

Aug. 10, 2009 12:22 PM ETACWI, EEM4 Comments
William M. Wright profile picture
William M. Wright

Economic and financial indicators prove green shoots are no UFO

The Institute for Supply Management™ ISM Manufacturing & Non-Manufacturing Report On Business® is considered by many economists to be the most reliable near-term economic barometer available. Six of the 18 manufacturing industries reported growth in July. Seven of 17 non-manufacturing sectors reported growth.

These reports are far from rosy. But they are a major improvement over the 2008 4th quarter and 2009 1st quarter. The improving trends are showing up around the world.

The sightings of green shoots are no fantasy.

Manufacturing industries in the world’s leading economies are in a much better state than at the end of last year, according to surveys of purchasing managers. In three of the countries, China, Britain and Japan, the purchasing managers’ indices compiled by Markit, a vendor of financial information, are above 50, indicating that manufacturing is growing again. And in the USA, France, Spain, Germany and Italy major improvements over December 2008 have been made as indices rise above 45.

In December 2008 only China’s index was even above 40; in January Japan’s dipped below 30. In America, the Institute for Supply Management’s index rose by more than four points in July to 48.9, the highest reading since last September. That still implies contraction, though at a less marked rate.

Many countries leading economic indicators are rising

The Conference Board is the leading organization monitoring and measuring world economic indicators. The July report once again showed the USA leading economic indicators rising. Moreover the pattern is similar around the world. We knew China and India were showing early signs of improvement during the first quarter. Now the Conference Boards latest July and August reports shows the Leading Economic Indicators are rising in Japan, Korea, Mexico, Australia, France, Germany and the UK. Germany just announced today their exports rose 7%.

This article was written by

William M. Wright profile picture
William M. Wright and the stock market go back to 1971. Bill has twenty seven years experience working within the financial service industry and valuable knowledge of market and economic history. He's a once-upon-a-time aggressive skiier and Lake Tahoe local. Before founding Window To Wall Street , Bill was in a senior management position for over 15 years with a fortune 100 financial institution where he managed multiply Mutual Fund and Variable Annuity functions. He's also been a Financial Consultant, Tax Advisor, Business Analyst and Financial Analyst. Bill completed his MBA at Eastern Michigan University and graduated Cum Laude from Western Michigan University where he earned his BBA in both Accounting and Finance. He also holds an Associates Degree (AA) from Kalamazoo Valley Community College in business where he graduated Magna Cum Laude.

Recommended For You

Comments (4)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.