Tuesday, March 9, 2010

Looking Global

Bloomberg reported yesterday on a forecast from Joseph Carson, an economist with AllianceBernstein, who noted that the strong 5.7 percent GDP growth we saw last quarter was fueled in large part by exports, which accounted for 2.32 percentage points of that. Carson expects this state of affairs to continue, meaning that he sees annual growth in the 3.5 to 3.7 percent range, rather than the 2 percent that other economists have suggested.

Carson thinks one of the major drivers of our economy will be the growth seen in developing nations. The International Monetary Fund has predicted that emerging and developing nations will see their GDP expand by a robust 6 percent this year, while developing nations are expected to grow by just 2.1 percent.

If the U.S. can continue to feed off that kind of growth through exports, it makes our own landscape of half-finished subdivisions and half-empty strip malls that much less forbidding. UPS for instance, saw its international business increase by 11.8 percent in the fourth quarter of '09, even as its domestic business slipped by 1.9 percent. Perhaps it's time to look overseas for signs of recovery.

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