The Future of The Economy

Attended the annual breakfast with Neville Norman at AIM. Here are his forecasts for 2009/10:

GDP Growth.
Govt forecast is for -0.5%
Neville's Most Likely Outcome is 1.8%
Neville 95% confidence range is +0.5% to 2.9%
So, What Recession?

Dwellings Growth.
Govt forecast is for 0%
Neville's Most Likely Outcome is +4%
Neville 95% confidence range is +1% to 7%
So, What Recession?

Non-dwelling Construction.
Govt forecast is for -26%
Neville's Most Likely Outcome is -12%
Neville 95% confidence range is -25% to -5%
OK. That's not terrific.

Investments in Machinery and Equipment.
Govt forecast is for -16.5%
Neville's Most Likely Outcome is -8%
Neville 95% confidence range is +15% to 0%
Not great either.

Unemployment Rate.
Govt forecast is for 8.3%
Neville's Most Likely Outcome is 6.8%
Neville 95% confidence range is 5.9% to 8.5%
It's currently 5.7%, up from 4.3% a year ago. But USA is at 9.4% up from 5.5%.

CPI Growth.
Govt forecast is for +1.75%
Neville's Most Likely Outcome is +2.8%
Neville 95% confidence range is +1.5% to 4.5%
So, inflation under control.

Wage-Price Index
Govt forecast is for +3.3%
Neville's Most Likely Outcome is +4.2%
Neville 95% confidence range is +3% to 5.8%
A bit of wage pressure. We deserve a raise.

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