If it’s growing don’t mock it!
13 September 2010
I had to smile at a fantastic bit of common sense forecasting this week, if only because it was so far removed from the frenzied doom-mongering that we are used to hearing.
It became clear from our anniversary articles from our correspondents that the economy is not a single global entity. The confidence in the East and the caution in the West underline the fact that the global village is still a pretty big and diverse place.
Trying to keep eager eyes on this confusion of unconformity are the economists who, having been completely caught out by our last economic disaster are making sure that they are going to be in plenty of time for the next one. A sure-fire way of doing this is by creating the self-fulfilling prophecy – talk down the economy and the ensuing gloom and corporate caution ensures the fledging recovery stalls.
Such economic and political sooth-sayers have lost what little credibility they had, for me at least, and their damaging pessimism stems from their own desire, either from business necessity or ego, to re-assert themselves.
So refreshing it was this week, when I got the full monthly analysis from Future Horizons, giving its take on both the semiconductor market and broader economy. It showed semiconductor sales have slowed from its 50% growth (from first half 2010 compared to first half 2009) to below 11% (maybe down to zero growth) for second half year comparisons. A look at the history of growth figures show that its widely fluctuating graph, with figures falling and rising by plus and minus 30% in a matter of half a year. Fifty percent is clearly unsustainable for any length of time and even zero growth in the second half of the year would result in an overall 2010 growth figure of 28 percent. This is not double-dip recession territory!
Future Horizons’ CEO Malcolm Penn took the key economic indicator, which has been taken as proof of trouble ahead due its recent slowing in growth, and summed up my thoughts with the title to his report (and this is what made me smile): “What’s wrong with a GDP growth outlook of ‘only’ 4.3 percent???”
What indeed?
On an entirely different topic, congratulations to all of our winners of the e-Legacy Awards last week. Many readers of this newsletter also subscribe to our sister publication (www.EPDontheNET.net) so I will not replicate the winner information or my thoughts about the event, but follow the EPD link if you are interested.
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