A year of recovery and growth?

Link : February 8, 2012

Perhaps it’s just the traditional start of the year optimism, but it’s hard to miss the growing chorus of predictions that 2012 will be a year of recovery and economic growth.
Following the bursting of the prosperity bubble in 2008, the recession and the trough that persisted for three years, perhaps it’s time for the optimists to come out of hibernation. It seems, however, that optimists are doing more than singing “High Hopes,” they’ve got some solid evidence to support their confidence.
Economists Alan Beaulieu and Brian Beaulieu, CEO and president, respectively, of the Institute for Trend Research, see several positive signs that a recovery is near. Those factors include:
• Positive rates of change in global industrial production, retail sales, commercial and industrial loans at commercial banks
• Improving employment numbers
• Decreasing rates of change in delinquency rates for commercial and industrial loans
• Some upticks in housing starts and the Purchasing Managers Index

U.S. income levels are also increasing, rising in December by .5 percent, the largest increase since last March, according to the U.S. Department of Commerce.

Increased confidence is also being shown by the more than 1,600 CEOs who participated in the most recent Vistage CEO Confidence Index Survey. That survey, taken in December with results released in early January, showed that executives not only believe that 2012 will be better than last year, but that the U.S. economy will be the most improved in the world three years from now. Among the encouraging findings in the survey: 55 percent of CEOs expect to hire additional employees this year, 42 percent plan to invest in new plants and equipment, and 55 percent expect increased profits.

Whether the Vistage forecasts pan out depends in no small way on the CEOs who made them. If CEOs invest in new facilities, if they hire new employees, if their strategies increase revenues, then 2012 should be a better year for all of us.

There are no guarantees, of course, that we’ll go from singing “High Hopes” to “Happy Days Are Here Again,” In fact, Alan and Brian Beaulieu see signs of a small recession on the horizon in 2014. But one thing is for certain: If CEOs sit on the sideline, the recovery will be slower and weaker than we’re hoping for.