{"id":3007,"date":"2010-06-14T11:48:32","date_gmt":"2010-06-14T11:48:32","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=3007"},"modified":"2025-03-27T15:49:03","modified_gmt":"2025-03-27T15:49:03","slug":"global-recovery-continuing-but-momentum-ebbing","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=3007","title":{"rendered":"Global recovery continuing but momentum ebbing"},"content":{"rendered":"<p>Global industrial output &ndash; as proxied by combined production in the G7 major countries and seven large emerging economies (the &#8220;E7&#8221;) &ndash; rose by a further 0.6% in April to stand just 1.4% below the pre-recession peak reached in February 2008. With business surveys signalling further gains, output is likely to reach a new high by late summer &ndash; see first chart.<\/p>\n<p>A composite leading index derived from OECD country indices (except for Taiwan, for which a national series was used) also continued to rise in April but the 0.4% monthly increase was the smallest since February 2009. The index appears to be converging with the long-run trend path of output, with this trend implying growth of 3.4% <em>per annum<\/em> &ndash; first chart.<\/p>\n<p>The loss of momentum of the leading index is clearer in the second chart, showing six-month growth rates. Pessimistic commentators suggest that this slowdown will intensify and is an early warning of renewed output weakness in late 2010 and 2011 &ndash; the dreaded &#8220;double dip&#8221;.<\/p>\n<p>Global narrow money trends, however, have yet to support such a scenario. Real M1 led output and the leading index around the recession trough in early 2009 and again at the recent momentum peak &ndash; third chart. Six-month growth has slowed significantly but remains solid and may be stabilising, suggesting that output and the leading index will continue to rise, albeit at a much-reduced pace.<\/p>\n<p>The best guess here remains that the current recovery will follow the pattern of the output revival after the mid 1970s first oil shock recession, implying a mid-cycle &#8220;pause to refresh&#8221; in late 2010 and 2011 followed by renewed acceleration from late next year &ndash; fourth chart. Further weakness in real M1, however, would demand a rethink. A 2011 global slowdown, moreover, could involve stagnant G7 output, allowing for much faster E7 trend growth.<\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/g7e7ind140610-1.gif?__SQUARESPACE_CACHEVERSION=1276518009355\" alt=\"\" \/><\/span><\/span><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/g7e7ind140610-2.gif?__SQUARESPACE_CACHEVERSION=1276518024405\" alt=\"\" \/><\/span><\/span><\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/g7e7ind140610-3.gif?__SQUARESPACE_CACHEVERSION=1276518036687\" alt=\"\" \/><\/span><\/span><\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/g7e7ind140610-4.gif?__SQUARESPACE_CACHEVERSION=1276518048655\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Global industrial output &ndash; as proxied by combined production in the G7 major countries and seven large emerging economies (the &#8220;E7&#8221;) &ndash; rose by a further 0.6% in April to stand just 1.4% below the pre-recession peak reached in February 2008. With business surveys signalling further gains, output is likely to reach a new high [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-3007","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3007","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3007"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3007\/revisions"}],"predecessor-version":[{"id":5316,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3007\/revisions\/5316"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}