Economists: Keys to Reverse Downturn Stalling International Commerce are the U.S., Restoring Consumer Confidence and Timing; Recovery Will Take Longer Than Before, Reports The Journal of Commerce
/PRNewswire/ -- A recession that began in the United States and is spreading around the world won't be stemmed until U.S. consumer confidence is restored, according to international economists at the first U.S. Export Conference, produced by The Journal of Commerce Conferences and Shipping Digest magazine. However, it will take a lot longer than during previous recessions.
Peter T. Leach, Senior Editor for The Journal of Commerce (www.joc.com), reports on the conference, titled "Opportunities and Challenges during a Global Slowdown," and the topic in "At a crossroads," a cover story in this week's magazine. The Journal of Commerce has provided authoritative coverage of the international trade and transportation industries since 1827.
Leach writes that recession is running rampant in all the world's industrialized economies at the same time. And, for the first time since World War II, China and India - the biggest emerging and still-growing markets - don't yet have consumer markets large enough to reignite their domestic growth or their imports from developed economies.
International economists say that the U.S. has to be the engine for global growth, leading the world out of recession and reversing the downturn that has slowed international commerce. This has caused the first contraction in container shipping volume that the industry has seen, Leach reports.
In his economic outlook keynote address at the U.S. Export Conference, Dr. Walter Kemmsies, chief economist at port design-engineering consultant Moffatt & Nichol, said, "The world's economy is circling the drain. The whole world is deleveraging, which directly affects global trade."
Kemmsies said that although the economic stimulus plan signed this week by President Obama will put a plug in the drain and help bring the U.S. economy out of recession by the second half of this year, "I don't see a big rebound in consumer demand."
His company's economic model indicates the U.S. economy will slow down again by 2011. "It will not feel like what's going on right now; it will just feel uncomfortable rather than terrifying," Kemmsies said. "We will recover, and that will help Asia and Latin America, but Europe will be the last to recover."
Many economists agree that restoring consumer confidence is the critical need. "We're putting in the kindling, but we don't have a match yet," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute, the New York-based economic research firm that produces the JoC-ECRI Commodity Price Index. "Confidence is the match, and it may be linked to an easing in liquidity or to jobs, which we know are bad."
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