Jun 2010 Financial News

Pace of global recovery continues to slow

Jun 15, 2010

IT appears as though the economic troubles that have been affecting countries on the European continent have had a moderating impact on the pace of economic expansion in the world’s largest economies.

According to the Organisation for Economic Cooperation and Development’s (OECD) latest report on composite leading indicators (CLIs), which are designed to provide early signals of turning points in business cycles and fluctuations of economic activity around its long term potential level, there has been a slowing of economic activity in virtually all of the countries highlighted.

CLIs for April showed that for the United States, the United Kingdom, and Canada, which are Barbados’ three most significant international markets for tourism and international business, the pace of expansion has slowed consistently since the start of the year.

The OECD report stated that during the month under review, the CLI figure for the United States was 0.7 of a point, down from the 0.8, 0.9, and 1.0 recorded for March, February and January respectively.

In the case of the United Kingdom, the CLI for April was 0.1 of a point, following figures of 0.4, 0.3, and 0.2 for January, February and March respectively.
The performance of the UK is something that is being watched very keenly here in Barbados, given the fact that visitor arrivals from this country have been down of late, thus affecting the overall performance of the local tourism of the industry.

As a result, the continued decline in economic activity there will not be looked at as good news for the industry and the Barbadian economy as a whole, particularly given the fact that the view has already been expressed that it is unlikely that the industry will see a full recovery until there is a rebound in the UK market.

As it relates to Canada, April’s CLI figure was 0.2, falling from the 0.7 seen in January, representing the largest rate of decline in the three countries discussed here, as it dropped by 0.2 of a point between January and February, and also between March and April; while in the case of the US and the UK, each monthly decline was no more that 0.1 of a point.

Despite the slowdown in the recovery’s pace, it must be said that the CLIs for these countries are still significantly above that seen at the same point in 2009.
When compared to the CLI figures for April of last year, the OECD report showed that the United States, United Kingdom, and Canada were up by 12.9, 10.1, and 12.8 points respectively, indicating that these economies have indeed performed significantly better than during the period immediately following the worst of the global economic downturn. (RH)


Source:
Barbados Advocate
Tuesday June 15, 2010

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=10849