Conclusions and Expectations
Wednesday, 30 December 2009
Тhe economy in 2009
The world of business, and even society as a whole, will remember 2009 for numerous bankruptcies and layoffs in all sectors.
For example, the U.S. economy lost more than 140 bank organisations; European, Asian and American automobile manufacturers were hit hard by the financial "tzunami"; and the real estate sector exploded.
Optimism returns
Although statistics are not encouraging at the moment as proved by the increasing unemployment rate both in the EU and USA and high food prices (see prices we pay for food), forecasts indicate a change of direction for the future. There is a slow recovery in some industries, which will take time to translate into job market growth comparable to the levels of 2007. Are there other factors that fuel hopes for optimism?
Undoubtedly most of the Wall street players have never encountered before a similar situation. This is why the lack of negative business experience in the current management system further tested the resilience of the economy. The crisis, however, brought about one positive externality, or namely, it taught economists and businessmen how to deal with a financially destabilised market in the future. This precious experience gives hope that the nadir of the crisis is now in the past.
Changes in some sectors
To survive many industries will have to change their strategy. For example, in the automobile sector car producers have already undertaken new programmes to increase competitiveness. The new vehicles will be small, eco-friendly and in line with the European Union rules for lower CO2 emissions. Since these characteristics have long been the trademark of Asian car makers, they are expected to continue gaining shares of the European markets in 2009 and 2010.
The housing market is another sector that the financial meltdown seriously affected. In this case as well, experts expect a gradual price recovery. Despite the difficult situation, in some Eastern European countries prices are still far above the average annual salary. According to experts operating in the region, this is due to the last two EU enlargements (in 2004 and 2007) that doubled housing costs in the region. As a result, even after the 2009 decline prices are unaffordable for most citizens. In occidental Europe there are also indicators (though really nascent) for price recovery.
In 2009, the crisis hit hard the world economy in terms of business and jobs. Towards the end of the year, however, signs of recovery were felt across a number of sectors such as the automobile and housing industries. This is why 2010 holds high hopes for economic recovery that will bring businesses around the globe back on the track of growth and financial prosperity.
How do you see the economy in 2010? Share your thoughts in the comment box below.
