Downturn set to leave us - sooner than you think

Despite what some politicians are saying, there is now plenty of strong evidence that Australia is turning around.

We all know the economy was in great shape before this downturn. Now it seems, we are leading the way out of it.

The Reserve Bank Governor, Glenn Stevens, says that China’s economic recovery is "real" and could bring an Australian recovery within months.

In the strongest sign yet that officials believe the economic tide is turning, Stevens said on 19 May 2009 that developments in China and Australia were "consistent with the view that a recovery will get under way towards the end of the year".

Backing this view, here are two quotes from the latest board minutes from the Reserve Bank of Australia (26 May 2009):

· “In the case of the Australian economy ... there are signs that the economic stimulus is supporting demand.”
· “Overall, the Australian economy is likely to record better outcomes than most other advanced economies in 2009 and 2010, reflecting the healthy state of the domestic banking system and effectiveness of the macroeconomic policy stimulus to date."

It seems that the very conservative Reserve Bank is becoming increasingly bullish.

Also on 26 May, an international business confidence survey of some 7500 business people in 24 nations announced that Australia was rated as the number one country for coming out of the downturn in good shape.

The survey conducted in April was aimed at gauging business sentiment and what impact the economic downturn has had on businesses globally.

Australian businesspeople appeared relatively unaffected, according to the poll conducted for Servcorp, a provider of virtual and serviced offices that operates in 61 nations. Interestingly, the survey found that it was pessimistic media reports that were named as the number one concern among Australian businesses.

"I think the doom and gloom reports that Australians hear every day are harmful to Australian businesses and hold them back from seeing opportunities,” said Servcorp executive director Taine Moufarrige.

And there is good news from the US too. On 26 May, Associated Press in New York reported that consumer confidence rebounded in May – soaring to the highest level since last September – as more shoppers are feeling the worst of the recession is behind them.

The US “Consumer Confidence Index”, which had dramatically increased in April, zoomed past economists' expectations to 54.9 from a revised 40.8 in April.

The reading marks the highest point in eight months when the level was 61.4. The levels are also closer to the year-ago reading of 58.1.

In addition, the “Present Situation Index”, which measures how shoppers feel now about the economy, rose to 28.9 from 25.5 last month. But the “Expectations Index”, which measures shoppers' outlook over the next six months, climbed to 72.3 from 51.0 in April.