An upbeat assessment of the prospects of recovery from the OECD, a White House forecast of 600,000 jobs to be created and brighter news from China to Germany has bolstered hopes that the global recession may be shorter-lived than feared. The OECD said that the UK was one of four advanced economies that are displaying "stronger signals of a possible trough", along with Canada, France and Italy.
The OECD said that "while it is still too early to assess whether it is a temporary or a more durable turning point, OECD composite leading indicators for April 2009 point to a reduced pace of deterioration in most of the OECD economies".
The OECD's leading indicators include surveys of business and consumer confidence and future orders that can be relied upon to provide a picture of movements in the real economy some months hence.
A series of domestic economic data also suggested the UK may be better placed than previously thought to return to growth. The Chancellor predicted in his Budget that it will arrive before the end of this year, and City economists are starting to revise their growth projections for 2009 upwards. Sterling, however, fell in early trading as the European elections showed a rise in protectionist sentiment.
In Japan, Germany and the United States, positive signals were also emerging, the OECD said, although the leading indicators still pointed to a slowdown. China's growth slowed to 6.1 per cent in the first quarter of this year, the lowest on record, but the Government said it was confident of hitting its 8 per cent growth target for the year.
German manufacturing orders held steady in April after a big increase in March, Berlin reported. In Washington, President Barack Obama announced 10 major public projects, which will be funded by the $787bn (£492bn) stimulus package that Congress passed in February. "Surely and steadily, we will turn this economy around," he said. He added that 150,000 jobs had already been saved. The job creation plans include maintenance projects at military bases, 1,600 state road and airport improvement schemes, and funds to hire 135,000 teachers and support staff.
In Britain, new buyers continue to return to the housing market in the belief that it is close to bottoming out. A net balance of 48 per cent of chartered surveyors reported an uplift in new buyer inquiries – the seventh consecutive monthly rise, and up from 44 per cent in April, according to the Royal Institution of Chartered Surveyors. In fact, May's net balance of surveyors registering an increase buyer interest was the highest since August 1999. The average number of house sales per agent also rose, albeit from "very depressed levels", to 11.8, up from 10.6 over the past three months.
While UK employers remain downbeat about their hiring plans, 81 per cent do not intend to make any cuts in the third quarter, revealed the Manpower Employment Outlook Survey. The UK's net employment outlook remains bleak, but conditions have got no worse. Still, employer hiring plans are the worst for 17 years. Employers in the South-west and East Anglia are the most optimistic.
However, retailers suffered a setback in May, dampening hopes of a return to recovery. The British Retail Consortium-KPMG survey reported that underlying retail sales fell by 0.8 per cent in May, following a 4.6 per cent surge in April driven by the later Easter and balmy spring weather.
Stephen Robertson, the director general of the BRC, said: "Sun and bank holidays don't a recovery make ... Spring has been extremely difficult for most non-food retailers."Reuse content