2011 economic forecast hari singh n.
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Seidman College of Business. 2011 ECONOMIC FORECAST Hari Singh. Truth and Disclosure National GDP in 2010. Our forecast for 2010 was 2% to 3% GDP. Q1: 3.7%. Q2: 1.7%. Q3: 2.6% . Q4: Projected: 2.3%. Average for 2010 could be 2.6%. Truth and Disclosure Regional employment projections.

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2011 economic forecast hari singh

Seidman College of Business

2011 ECONOMIC FORECAST

Hari Singh

truth and disclosure national gdp in 2010
Truth and DisclosureNational GDP in 2010

Our forecast for 2010 was 2% to 3% GDP.

  • Q1: 3.7%.
  • Q2: 1.7%.
  • Q3: 2.6% .
  • Q4: Projected: 2.3%.
  • Average for 2010 could be 2.6%.
truth and disclosure regional employment projections
Truth and Disclosure Regional employment projections
  • Projected private employment in 2010 was 0.50%.
  • Actual increase of about 0.30% to 0.40%.
  • NSA: Nov. 2011 compared to Nov. 2010.
  • Longer drags: Empirical models don’t pick up turning points in a timely fashion.
  • Subjective: CEO forecasts may be subject to exaggerated psychological mood swings.
  • CEO forecasts appear to be more accurate for the last two years.

.

broad based recovery gaining momentum
Broad based recovery gaining momentum
  • The Conference Board Leading Economic Index™ (LEI) is a good proxy for growth in the next six months.Wasat 104.9 in early 2010 (2004=100).
  • Significant increase to 112.4 in December 2010.
  • LEI has five consecutive months of growth.
  • Factors contributing to LEI growth: Improvement in financial indicators, consumer expectations, manufacturing, and early labor market indicators.
increased growth in 2011
Increased growth in 2011
  • Low dollar and strong growth in Asia will fuel exports.
  • Consumption growth will be modest but significant.
  • Private investment will pick up momentum.
  • Federal and state fiscal policies will be a drag or neutral at best.
  • FED will keep interest rates low.
employment prospects
Employment prospects
  • Productivity has risen significantly as existing workers utilized more intensively.
  • Temporary hiring is up.
  • Job creation will pick up steam in a zigzag fashion.
  • By the end of the year: Monthly growth of 200,000 – 250,000 jobs.
  • Natural rate of unemployment: 6% to 7%.
how will the west michigan economy perform in 2011
How will the West Michigan Economy perform in 2011?
  • All indicators point in one direction:
  • West Michigan is having a significant turnaround.
  • Restructuring in manufacturing has bottomed out and beginning to grow again.
  • Growth in health sector, education, and professional services.
  • Overall growth will be significant.
digging deeper into the employment numbers
Digging deeper into the employment numbers
  • Last year 36% of the respondents indicated that they will hire workers in 2010.
  • This year approximately 60% have indicated that they will hire in 2011.
  • Of the persons who responded, about two thirds (66%) indicated that they would hire permanent workers.
  • Corroborate a pick up in hiring.
blue and red perennial optimists green pragmatic 2010 36 2011 42 purple pessimistic 2010 45 2011 37
Blue and Red: Perennial OptimistsGreen (Pragmatic): 2010 (36%); 2011 (42%)Purple (Pessimistic): 2010 (45%); 2011 (37%)
prospects for west michigan
Prospects for West Michigan
  • Employment growth will be 2%.
  • Expected overall sales growth of 2.5%.
  • Export growth is a robust 9%.
  • Health-related services, specialized services, and education will pick up the slack.
  • Importance of positioning: Provide incentives for green technologies.
  • Ensure that our graduates continue work in Michigan.
the outlook in 2011 for the national economy
The outlook in 2011 for the national economy?
  • Monetary Policy: FED impact is minimal.
  • Govt. tightening: Both federal and state.
  • At best fiscal policy is neutral.
  • Growth expected to pick up over the year.
  • Overall GDP growth: 3% to 4%.
  • Employment will improve significantly.
  • Unemployment rate of 7% by Nov. 2012?
caveat gorilla in the room
Caveat: Gorilla in the Room
  • Pressing Need: Dramatic increases in Basic R&D, Education/Training, Alt. energy innovation.
  • Positive scenario: Credible tax increases (in the guise of tax simplification) and long term entitlement reductions.
  • Negative scenario: Market loses confidence in our long term fiscal viability and there is a run on the dollar.
  • Muddle through: Not enough capital investment.Long term progressive decline of economic foundations.