Summary
Sweeping statements about economic expectations can hinder recovery efforts. While some sector is Europe (and the US) continue to show little signs of recovery, many other sectors are improving. If those sectors such as real estate and auto industries were to be removed from the prediction, I wonder what the survey results would show.
Analysis
As pointed out in this article, many are predicting difficult times in Europe. Such a broad sweeping statement needs focus, similar to the CPI measurement. When the monthly inflation figures are released, the volatile items such as oil and automobiles are excluded in the subcalculation. In this article, real estate and auto industries are expected to have continued problems, similar to that in the US. While it appears some of the US gov't programs are helping in the near-term, it has yet to be seen if this has a long-term effect. Some industries, such as biotech and technology, are beginning to show signs of recovery in the US and abroad. Signs of recovery should not be bottomline only as many companies are cutting costs to improve their margins, but analysis should include Q/Q revenue increases. Examining specific markets like government, retail and corporate spending should be included in analyzing a recovery.
The equity market is also been showing signs of life over the past few months. As a leading indicator to private company performance, I expect VC activity to continue to gain strength as we approach the end of the year. I mention "leading indicator" due to the savvy VC firms due diligence process and their knowledge of specific markets that is required before investing in a company.
Unfortunately, broad statements such as what this article presents has a tendency to deflate recovery efforts as the perception of continued bad times curb spending.
