2009 Economic Overview,

Construction spending prospects are declining rapidly at the beginning of 2009 as the credit freeze recession spreads rapidly through most economies around the world. Job site activity, project starts and pre-start development planning will continue to decline well into 2009 but most markets will be improving from depressed levels by yearend. The heavy/engineering market will weather the recession best because of the source of its funding and some federally financed economic stimulus civil construction spending in the second half of the year.

The lastest (October) report on construction spending was a 1.2% month-to-month drop. The November jobs report assures another similar fall in construction spending in November. Housing construction continues to drop. Nonresidential building and heavy construction have both begun to decline in the last few months. Construction spending fell 11.6% in the last two and half years in current dollars with the inflation adjusted drop over 20%.

More significantly for the 2009 outlook, the project starts trend weakened sharply late in 2008 after trending down slowly for about a year. This was entirely due to a 30% plunge in nonresidential building starts in October from September while heavy project starts surged to a record high level. Starts fell 44% for private "for lease" projects — offices, retail, hotels and warehouse — that are the most sensitive to credit conditions and prospective spending in the economy.

The abrupt October decline in private commercial starts includes some projects put on hold until market prospects are clearer or financing arrangements can be reworked. Some of these projects will return in the coming months. However, the negative impact of the recession is delayed for project starts for public and institutional work. Starts in these sectors will gradually erode as tax collections and investment earnings continue to shrink. Already, some 2009 start projects have been delayed or cancelled.

These are the key assumptions in the Reed Construction Data outlook:

The 2008–09 recession will be more severe than the recent mild recession in 2001 and the early 1990's but less severe than the deep recessions in the early 180-s and the mid-1970's.
The recession will be front loaded — the panic from the surprise credit problems in September 2008 caused a larger than normal share of the inevitable spending cutback decisions to be made early. Q4 2008 GDP will drop as much as 4% with several smaller declines following.
The 60% drop in energy prices is providing a huge boost to consumer income and the reduction of business operating costs and will prevent any further erosion in spending confidence
Congress will enact another economic stimulus spending plan very quickly. The 2008 stimulus spending interrupted the recession in Q2 2008 with +2.8% GDP growth. The new plan will have a similar impact in mid-2009 and possibly may be enough to end the recession.
The recovery from the recession will be unusually slow because credit costs will remain high for a recession period as lenders try to replace the capital lost to unpaid residential mortgages.
The housing market will begin to recover before other sectors because it's recession began two years earlier than the rest of construction.
The decline in the nonresidential building market is not due to overbuilding but to credit access and overall economic spending issues so there is some additional growth left in this building cycle beyond 2010.
Regional Economies
The Gulf Coast was the only region whose economy was still expanding at the end of 2008, based on information through October. But falling energy prices and the resulting oil & gas field investment cuts will push Texas and Louisiana into recession early 2009.

State Economic Activity Index Ann. % change — last 3 months
Great Lakes -3.3%
Pacific -2.8%
Rocky Mountain -2.5%
South Atlantic -2.4%
Plains -1.6%
Mid Atlantic -1.4%
New England -1.3%
Gulf Coast +1.0%
(Source: Federal Reserve Bank of Philadelphia)
Each regions economic condition is set by the health of its key industries. The Great Lakes economy, dominated by motor vehicle and other manufacturing, has declined further relative to the rest of the country in the final months of 2008 and this will continue well into 2009. The expected emergency loan to the auto companies from the federal government replaces private credit no longer available but comes with spending cut mandates that will reduce industry labor costs in 2009 and further weaken the regions' economy.

World Economy Forecast For 2009,

After nearly 30 years of prosperity and development, the world economy stepped into the most severe financial crisis since the 1930s. 2008 appears to be in a rerun of 1929, in order to avoid making the same mistakes of that crisis the governments don’t spare any effort and invest huge sums of money to save a the patient suffering from terminal illnesses. However, with the escalation of the crisis it seems that the low point of this situation is still ahead of us and 2009 is bound to be a very tough year.

The global economic crisis will surely make the world economy a more volatility. Whenever the world economic downturn, there would always accompanied by the tense situation in around the world and frequent regional conflicts, particularly in the second half of 2008. Bush’s time also marked the end of the era of the United States initiated as the unipolar superpower which maintain the world order to decline, combined with the United States in recent years, as a superpower and influence began to decline in 2009 will return to the world into riskier period . In addition to the economic crisis the US and other G8 countries find it is difficult to face such the war in Iraq and Afghanistan, Iran and North Korea’s nuclear issue, India and Pakistan tension, Israel and Palestine, and so the escalation of the conflict, crisis and war in 2009 Will continue to play a leading role. At the same time as the economic recession and high unemployment rate of the country’s internal social conflicts and political instability. This social and political instability will, in turn, constrain the economic recovery process.

In 2009 the world economy’s center of gravity is not re-economic recovery hopes, but whether they can successfully prevent the economy from recession becoming into a depression. The crisis is not only a prosperous 30-year structural adjustment beginning as well as a “de-leverage” in the process, the resulting economic recovery is bound to return to the difficult and tortuous. In particular the “de-leverage” of the current economic downturn is the main driving forces of over-indebted households and the lack of capital financial institutions is bound to adjust their income and expenditure structure, increase savings and loan restrictions become inevitable, so before the end of this process, Could not have sustained recovery. In addition, following the real estate sector, financial services and the automotive industry in trouble, do not know what the industry will need government aid, the busy emergency financing to promote economic recovery is bound to reduce efficiency. In short, these are a critical times and markets will be too optimistic.

In 2009 the investment environment filled with pessimism. First of all, the global housing bubble burst is far from the being ended , the overall contraction in the economy led to the instability of employment and income decline, loss of housing and effective support, and, in the past, experience has shown that the real estate market recovery will take at least 26 months, housing Prices and sales will continue a downward trend; Second, the stock market in the world in 2008 hit a historic encounter, the average annual drop of a record 44% in 2009 dim the prospects for investors more cautious about the stock market rebounded sharply, it is extremely unlikely ; Again, as the world entered the era of low interest rates, deposits and bonds, the yield will be significantly reduced, and excessive money supply will once again lead to inflation, thus eating into limited income; As for financial derivatives, investors, but as a scourge Fear to avoid any connection.

Despite the poor environment, energy and commodity prices may be a significant rebound, although the economic downturn and weakening demand, but in the face of a price collapse in 2008, suppliers to start production in order to stabilize prices, the most important thing is that China and India, and other emerging economies are going through The course of industrialization, in the long run, demand will continue to rise while the supply is limited, so prices will slow the momentum of the recovery. Gold is still against the best choice to hedge market risks, the United States over the past few months in response to costly financial crisis, resulting in money supply and increase the level of debt, which is bound to undermine the inherent value of the dollar, while interest rates have come down in other countries also appear Exchange rate fell in under the pressure of currency depreciation, capital flows may be gold, hedge its functions will be to provide price support. Brewing in the foreign exchange market more opportunities for currency exchange rate is the ratio between the relationship between economic prosperity, compared with currencies of the country’s economy which is better, and the contraction in the economy, compared with the devaluation of the national economy which is even worse, Therefore, the price of the difficulty of grasping the trend of relatively low world power in the formulation and implementation of the plan to stimulate the economy, is bound to consider and to maintain exchange rate stability, and in 2008 fluctuations of the exchange rate is very difficult in 2009, investments and transactions To substantially reduce the risk, the band of the same operation will generate substantial revenue.

2009 investment strategy is to maximize the proceeds from the pursuit of minimizing the risk to the pursuit of a gradual shift. After all, when the economy is, the bullish atmosphere, can be more optimistic as far as possible, the more revenue; and the economic downturn and the atmosphere bearish, as far as possible, the more pessimistic about the effective loss of control. Regardless of what market conditions, there is always an opportunity there, so it appears that they are up idle funds would be unwise.

Global Economic Forecast for 2009: Will Demand for Good News Outpace Supply?

After a year of financial shock and sharp economic loss, 2009 is likely to be extremely difficult for the global economy, with investors, business leaders and policymakers struggling to find signs of recovery, according to Wharton faculty and academic partners around the world.

"It's all pretty negative," says Wharton finance professor Franklin Allen. "The economy is going into a recession and my own view is that it will be deep and quite long-lasting. There doesn't seem to be anything on the horizon that is a bright spot."

In the wake of crumbling stock markets, mounting bad debt and rising unemployment, policymakers are scrambling to devise strategies to restore stability and lay the groundwork for new growth. "There's no country in the world that's doing well," Allen continues. "Everybody is doing badly, with large amounts of debt and heading toward deflation," plus "unemployment and a rush by companies to fire people."

The collapse in the United States is different than in other industrialized countries around the world because the problems began in the financial sector and spread out into the broader economy, says Wharton management professor Mauro Guillén. In the rest of the world, problems in the real economy -- created largely by trouble in the United States -- led to weakness in financial markets. "In the United States, the key in 2009 is, 'Can we clear up the mess in the financial sector?' Unfortunately, I'm not very optimistic," says Guillén.

Wharton finance professor Richard Marston says he is shocked by the impact of the crisis on U.S. financial firms and markets. "To see Wachovia, Wash Mutual, Citi all gravely wounded. It's extraordinary." Marston contends that while the banks have been shored up, they are unlikely to lend for a long time. On top of that, he adds, the inability to securitize will constrain credit more than if banks alone had cut back on lending.

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Looking ahead, other shocks -- bankruptcies, bond defaults and additional job losses -- will buffet the economy, according to Marston. While markets have probably priced these events in, people will be shaken up when they actually occur, adding further jolts to confidence. He notes that during the 2001 recession -- which was not as serious as today's -- the economy turned upward in November, but large job losses continued through 2002. Worse, he says, demand remains depressed around the world. "This is our first world-wide recession in a long time. And the engine of past recoveries -- the American consumer -- is in the repair shop for an overhaul."

Businesses will hold back from investing until there is a revival of demand, he continues. "Where will demand come from?" asks Marston, who sees no obvious answer. "So I think the consensus in the press that recovery will start 'sometime in 2009' may be wishful thinking. We shall see."

John Percival, Wharton adjunct professor of finance, says the nation is still facing a mortgage crisis that will hamper recovery. He points out that while foreclosure rates are already high, many mortgages are due to reset in the coming years. Those mortgages may not be as shaky as subprime debt, but many are still likely to become problem loans. Further, he says, the commercial mortgage market is likely to start falling into default, and financial institutions will face problems with consumer credit.

"It's easy to say that this, too, shall pass. People are talking about 2009 being tough and things will turn around in 2010," says Percival. "I'm not so sure. It could be longer than that."

Allen predicts that unemployment will continue to rise and the economy will remain weak as consumers and businesses refrain from new spending until they are confident asset prices are no longer falling. "We need things to stabilize," says Allen. "The problem at the moment is that people don't know what their wealth is." Americans have no idea what their investment portfolios or real estate holdings are really worth and, as a result, are afraid to spend or make additional investments. "I think everybody is frozen with fear of losing their jobs and the rest of their wealth. There's huge uncertainty. Until that starts going away, until things stop getting worse, we'll keep going down."

Outlook for high-income OECD countries,

The intensification of the financial crisis in the United States, and its widening to major European countries in the autumn of 2008, is expected to exact a significant toll on economic activity across the high-income countries belonging to the Organisation for Economic Co-operation and Development (OECD).
Even if confidence in global credit markets is restored quickly, reductions in the finance available for firms and consumers, coupled with a slowdown in developing-country import demand, have set the stage for a recession in the United States, Europe, and Japan beginning in the second half of 2008 and lasting into 2009.

A movement to joint recession across key OECD countries.
Through the first quarter of 2008, the slow¬down among the OECD countries was fairly moderate (although industrial production stagnated in the quarter): exports benefited from strong import demand from developing countries and from oil exporters, while falling imports served to boost the contribution of net trade to GDP growth.
But GDP fell to 0.3 percent growth (at an annual rate) in the second quarter for the key advanced economies, down from 2.4 percent in 2007; and as GDP growth moved to decline across the United States, Europe, and Japan during the third quarter, OECD growth dropped to —0.6 percent.
Industrial production slipped to negative ground across all major OECD economies in both the second and third quarters of the year, as fading overseas demand combined with a lack of domestic orders tied to sluggish conditions in housing and autos in a number of countries (see table of indicators, first and second panels).

Growth of export volumes dropped from 14.6 percent in 2007 to 2.5 percent during the third quarter (saar), as intra-OECD trade (especially within Europe) softened at the same time as developing-country demand slowed.

During the second quarter, conditions in Europe and Japan deteriorated sharply.
Japan’s GDP declined at a steep 3.7 percent seasonally adjusted annualized rate (saar), and Euro Area GDP fell 0.7 percent (see first chart here and table of indicators, first panel).

A falloff in household spending tied to the effects of much higher inflation, a decline in investment, and a dramatic shift in the growth contribution of trade all contributed to the turnaround.
In Europe, increased sluggishness in export markets and the long bout of euro appreciation pressured exports and imports into negative territory in the second quarter, with contributions to overall growth slipping to nil from 1.4 points in the final quarter of 2007.

In the United States, conversely, GDP picked up 2.8 percent (saar) in the second quarter, as fiscal stimulus and looser monetary policy boosted consumption spending.
Moreover, the pace of decline in residential investment slackened, while contributions from trade—still benefiting from the weak dollar— increased to a large 1.6 percentage points of growth (see second chart here).

U.S. domestic demand has been depressed since the final quarter of 2006, as a rise in domestic savings helped to unwind the global imbalances that were of such concern a couple of years ago.
As financial dislocations heightened in the third quarter, including unprecedented declines in equity mar¬kets in Europe, Japan, and the United States, consumer spending came under increasing pressure (see third chart here).2

And with export performance for OECD economies fading on the back of sputtering global demand, the Euro Area and Japan fell into technical recession in the quarter, while growth in the United States reverted to decline.

IMF slashes economic forecasts: Global recession in 2009 - Summary

Washington - The International Monetary Fund drastically cut its global economic forecasts on Thursday in the face of a growing credit crisis, predicting a recession in the United States and the world in 2009. In an update of its World Economic Outlook from October, the IMF said global growth would slow to 2.2 per cent in 2009, down from the 3-per-cent forecast made last month and from 3.7 per cent expected this year. Growth of under 3 per cent is rated by the IMF as a global recession.
Advanced economies as a whole will contract 0.3 per cent in 2009, which would be the first annual contraction for wealthy nations since World War Two, after the IMF predicted 0.5 per cent growth in its October forecast. The crisis lender expects 1.4-per-cent growth for wealthy nations in 2008.The US, the world's largest economy, will contract by 0.7 per cent and the euro area by 0.5 per cent in 2009. Japan, Germany, France, Britain, Spain and Italy will all face contractions of their economies next year, the IMF said.
Developing and emerging countries by contrast will continue to spearhead growth in the world, increasing 5.1 per cent in 2009. But that is still down from a forecast of 6.1 per cent made in October. Growth in the developing world was predicted at 6.6 per cent this year.
A global financial crisis has severely impacted the availability of credit around the world, curbing spending in wealthy nations and restricting poorer nations' access to foreign investment. The slowdown in demand has also slashed commodity prices that were driving growth in many developing countries.
"There has been a sharp worsening of credit conditions to emerging countries," said chief IMF economist Olivier Blanchard, adding that there was room for further interest rate cuts in a number of countries to boost growth.
Blanchard also called for global fiscal stimulus measures to be agreed at a summit of the world's 20 leading economies in Washington on November 15. If that happened, the IMF's predictions would be higher than they are at present, he said.
Blanchard said it was not "useful" to speak of a global recession, though he acknowledged the IMF's tradition has been to consider growth of under 3 per cent for the world a recession.
The IMF expects major slowdowns across Eastern Europe as well as Russia and the former members of the Soviet Union. Brazil's growth will slow sharply to 3 per cent next year from 5.2 per cent in 2008.
China's economy will continue to grow at 8.5 per cent in 2009, down from 9.7 per cent this year and 11.9 per cent in 2007. India's growth will drop to 6.3 per cent in 2009 from 7.8 per cent this year.

World Economic Forecast,2008

As per world economic forecast 2008, economists have predicted that financial years 2009 and 2010 would not exactly be good for most economies of world. As per world economic forecast, most countries would be recuperating from after effects of global financial recession of 2008. At worst there would be some countries that would be slipping down mire.




It has been seen in global economic forecast for financial years 2009 and 2010, that there has been some amount of disparity in way that predictions have shaped up. There are certain countries that have been predicted to be in better economic condition compared to other countries. Much of this situation could be credited to a fact that there were some countries which experienced tremors earlier than other countries.

Those countries have been experiencing sharp decline in rates of economic growth and their development has been affected as well. They did not have sufficient time and financial resources to come to terms with this crisis. As per world economic forecast, things are going to get worse for them, provided current trends continue. These forecasts are also, in part, based on fiscal policies that are adopted by governments, who are in charge of economic affairs.

It is important to determine exact purpose of economic reliefs being arranged, for that gives an idea regarding overall and actual utility of financial benefits. In Japan, for example, economists have been opining that financial relief packages are more of efforts to increase popularity, and amount of economic pragmatism involved in these benefits is rather less. On other hand there are countries like United Kingdom where authorities are lending a helping hand to common consumers and entire financial system, on a whole.

In United Kingdom, Prime Minister Gordon Brown has dished out a huge amount of money in order to save banking sector from running out of existence. He opines that only way out of this ongoing economic crisis is to spend more money and not restrict expenditure. There are countries like Australia where effects are not that prominent yet. Thus Australia has both time and sufficient financial resources to keep its economy going. Countries where economic slowdowns have been predicted are suffering from faulty governmental policies.

2009 World Economy Prediction,

1. Great Depression, worst since 1930. 55 percent of people said the financial crisis would affect them personally within 2009. 77 percent of them say their industry is in a state of crisis, and 50 percent say the economy is the worst it has been in their careers.


2. Oil price sideways 35$ - 44$ to 60$ - 75$. Oil price will go up until Israel stop war against GAZA. In February OPEC will cut oil productions again!!


3. Gold price goes up slowly into 1000$, good for Gold sector Company, but who buy gold in the middle of CRISIS!! It not going up fast but save!!

4. US, Europe, and Japan show an economic slowdown in 2009. Economy get better in the middle of year 2009.

5. 2009 will be one of the worst economic periods in U.S. history. If the street thinks the economy will improve in 2010, then 2009 should be an up year for equities.

6. Economy 2009 for Developing Countries in the area to be 4-5 percent growth, Because the increasingly strict credit and increase food and energy prices. Lenders or BANK will be very cautious about loaning money.

7. More Trouble Finding or Keeping A Job in 2009. The World unemployment rate is growing along with the national debt. As business continues to slow.

MY Advice, if you want to buy stock or shares choose Mining Sector especially Gold, Oil, and Coal sector. In Indonesia Stock Exchange (IHSG) Bank and Coal sector still the BEST for now, because Bank of Indonesia will cut interest rate into 7% during the year 2009. Keep a half of your money , market still in dangerous situation!!


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