Chicago business forcast
U shaped economic growth is predicted in the year ahead, even if political mistrust continues to rise. So says Professor Hurst of the University of Chicago in their annual business forecast1. ‘The economy starts to get better when consumers start spending a little more, businesses start spending more, and they stop hoarding cash.’ Due to the actions taken by the Fed, ‘we are in the Great Recession rather than the Great Depression,’ adds Randall Kroszner, recent Federal Reserve Governor.

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Meanwhile in Brussels, Chicago alumni and guests gathered in February for the annual business forecast dinner at the Stock Exchange – sponsored again by AHEAD.  Alumni president Kris Vansanten set the scene with results of their annual survey predicting that real recovery in Belgium will not take place until 2011; that inflation will rise, and interest rates stay flat. Key concerns however are unemployment, social unrest and a reduction in private wealth. “Recovery starts on a mountain of trouble,’ he notes. Yet, an encouraging 50% of their respondents anticipate that their company will grow in 2010.

Howard Gutman, US Ambassador to Belgium, then stressed the importance of positive thinking and actions ‘Tomorrow will be better… If you hire tomorrow more than today, you are already happily rebuilding’. Admittedly, some industries like automotive have been in crisis for a very long time so their collapse is not sudden. The secret now is to rebuild industries we are meant to have and choose a direction for the better. For example ‘we were not supposed to build hummers for private use.’ Meanwhile politicians are taking positive action too, like Kris Peeters’ promotional visit to Silicon Valley; also companies such as Microsoft are exemplary in building their innovation centre (MIC) in Mons.

Luc Bertrand, Chairman and CEO of Ackermans and Van Haaren advocated exports especially in emerging markets like Indonesia and Brazil. ‘Go where the growth is,’ he advises. Moving to a world with much scarcity of resources, we should invest in green energy, renewable energy and infrastructure.

Hot foot from London, Jan Loeys of JP Morgan pointed out that generally the deeper the recession, the better the growth. He compares the current situation with a patient following surgery. Post-operatively, the patient needs vitamins and good nutrition. Once they are stable and out of danger, then the advice to diet will follow.

In summary, there was general consensus that the financial crisis is behind us. Now is the time ‘to spend money and hire people’. Once the situation is properly stable, corrective measures can then be taken. Exports will be the engine of growth again, but governments should continue to support the economy.

Now is the time ‘to spend money and hire people’.


1. Chicago Booth Magazine Winter 2010, p 31-37


 
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