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The current economic situation is severe. The recession is expected to be one of the longest in the post war period. This poses significant problems for businesses and banks that deal with all industries. Understanding the causes of this recession, forecasting its duration, and highlighting what factors to look for on the road to recovery, will show where industry risks are most pressing. Industries are not equally impacted by recession and among the majority of losers there will be some that find new opportunities.
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To help you map the current economic and industry landscape, IBISWorld has released its macroeconomic briefing paper Economic Crisis: When will it End?. This briefing brings together the combined wisdom of our Chief Economist, Dr. Richard Buczynski, and senior industry analysts to offer a unique perspective on the recession, its impact on industry and the road to economic recovery. We have also published a Recession Update for all 700 industry reports, which analyze the key strengths and weaknesses currently faced by all industries.
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Highlights
The key forecasts of IBISWorld's Macroeconomic Briefing Paper are:
- The US economy will decline by 3% in 2009 and will not return to its normal course until 2011.
- Unemployment will continue to rise into the first quarter of 2010 and peak at 10.3%.
- Business investment will stay negative until the second half of 2010.
- Housing starts will not return to 2008 levels until 2011.
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On the industry front, the aforementioned macroeconomic forecasts will have the following impact:
- Finance: HIGH RISK - there is no money from investments and bond yields
are weak.
- Insurance: HIGH RISK - falling business activity, property values and income reduce industry demand.
- Construction: MIXED - the Federal stimulus package should buoy infrastructure construction from end-2009. Home builders will struggle.
- Manufacturing: HIGH RISK - falling business investment weakens demand and a strong dollar hurts exports.
- Real Estate: MIXED - rentals are resilient, but commercial property investment will decline.
- Retail: MIXED - hardest hit are discretionary sectors (auto, home furnishing and luxury goods). Big box retailers and dollar stores will benefit.
- Communications: MIXED - consumer substitution from wired telecoms to VoIP will accelerate, but smaller VoIP providers will struggle.
- Agriculture: LOW RISK - the sector produces staple goods and receives generous Federal support.
- Health: LOW RISK - not driven by economic forces. However, demand for elective treatments will fall.
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More Information
If you have any further questions, please don't hesitate to contact your Client
Relationship Manager on 1 800 330 3772 or email us at
recessionreport@ibisworld.com.
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