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Economic Recovery Insights: Growth, Employment, and Consumer Confidence Post-Recession

This analysis explores the economic landscape as of September 2010, detailing the recovery from the severe recession of late 2008 and early 2009. Key indicators highlight the mixed performance across manufacturing and service sectors, with significant declines in employment and rising unemployment rates. Government fiscal tightening is noted amid rising public borrowing. While global trade begins to recover, inflation impacts real earnings growth. Economic forecasts suggest continued growth in the UK, although concerns of a potential double dip linger.

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Economic Recovery Insights: Growth, Employment, and Consumer Confidence Post-Recession

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  1. Trends in the Economy Barry NaisbittEconomic Analysis 30th September 2010, London United Kingdom

  2. GDP Growth (% q/q) Recession has been deep • Output in the World’s major economies fell sharply in late 2008 and early 2009. The economies look to have emerged from recession by late 2009. Source – OECD

  3. Level of output by industries (Index 2006=100) Output performance has shown a mixed picture • UK manufacturing output fell by 14.3% from its level in Q2’08 to the low point in Q3‘09. • In contrast, total service sector output fell by 4.6% over the same period. Source – ONS

  4. Level of employment by industries (Index 2006=100) Employment has fallen • Services employment fell by 2% from its level in Q2’08 to the low point in Q4‘09. • In contrast, manufacturing employment fell by 10% over the same period. Source – ONS

  5. Unemployment Rate (%) Unemployment has risen as a consequence • The unemployment rate in the US has risen more than rates in the UK or the Euro-zone. • Unemployment in the UK reached 8.0% in March ‘10, its highest since October ’96. Source – ONS, BLS

  6. Fiscal Tightening Government borrowing has risen sharply • Public sector borrowing and debt have risen sharply but governments have announced plans to reduce borrowing by reducing spending and increasing taxation. Public Sector Net Borrowing (as % GDP) Public Sector Net Debt (as % GDP) Source – Budget June’10, ONS

  7. World Exports ($Trillion) The global economy is now recovering • World trade has picked up from its sharp fall and low point in Q1’09. • However, it will take time to regain the previous peak in activity. Source – WTO

  8. Average earnings growth and inflation (%) Relatively high inflation is reducing real earnings growth • Despite the recession, inflation has been running above its target. As average earnings growth has moderated, the higher inflation has squeezed real earnings growth. Source – ONS

  9. Consumer Confidence & Retail Sales Volume ( index & 3m/3m annual % change) and Business Investment Growth (level, £bn) Consumers and businesses • Consumer confidence has recovered from its lows but recent readings have shown some softening. Business investment has steadied after a substantial fall in early 2009. Source – ONS, GfK

  10. Latest economic indicators The economic outlook is far from certain • UK GDP grew very strongly in Q2 (+1.2% q/q), but this rapid pace will weaken. There is speculation about a possible ‘double dip’. Source – Financial Times, 2nd September

  11. Budget GDP Forecast (% Annual change in GDP) Recovery is expected to continue • The new Office of Budget Responsibility (OBR) expects the economy to grow by 1.2% in 2010, 2.3% in 2011 and 2.8% in 2012. Source–Budget June’10

  12. United Kingdom

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