"As we look over the first half of the year, a double-dip recession remains concerning, but D&B's data indicates that we will not have a repeat of 2008," said Paul Ballew, chief economist, D&B. "That is not to say that there aren't challenges and risks ahead, but the past five years have seen a period of restructuring for many sectors. In general, companies are leaner and more flexible, which will help to bolster the economic recovery we anticipate later in the decade."
D&B Mid-year Report Highlights
• U.S. and global economic growth projected to remain subdued and uneven.
Growth in the U.S. is expected to be just over two percent, while growth in China is predicted to be slightly more than seven percent due to China's aggressive economic stimulus program.
• The Euro Zone will continue to stumble.
The outlook for Europe remains troubling with the probability of a partial dissolution of the Euro. Although the efforts of the European Central Bank, International Monetary Fund and European Financial Stability Facility make dissolution in 2012 seem unlikely, the fundamental flaws in the design of the euro indicate that dissolution is probable in the future.
• Economic imbalances weigh down growth.
In developed markets, long- and short-term fiscal policy issues remain challenges that can potentially derail the recovery while also inhibiting growth over the next 10 years. In developing markets, the near-term issue of excesses in key sectors (property in China, for instance) complicates any efforts to implement a stimulus package.
• U.S. Business Health Improves
While the economic recovery remains sluggish, other indicators show that U.S. and global business health continues to improve overall. Strong evidence supports that non-financial institutions are in a better position to weather an economic storm than they were in 2008. And, small businesses continue to show improved performance, while key sectors like manufacturing are at pre-recession lows for bankruptcies and delinquencies.
