by Barnaby Meins

Created on: July 14, 2009   Last Updated: July 20, 2009

It could be a little premature to answer the question of whether the recession is over. Green shoots beginning to appear has been come an increasingly-coined term and some economists and financial experts believe there is little doubt that it will blossom this summer.

An indicator, known as the Leading Indicators Index, that looks at key economic information such as stock prices and consumer goods orders, increased sharply for the two consecutive months in May and April 2009. This is similar to the first two months that came after the 2001 recession.

The U.S. Weekly Leading Index published by the Economic Cycle Research Institute (ECRI), has indicated that economic growth has steadily risen to a 36-week high. Other indicators that the recession could be over are shown in the encouraging signs in the housing, labor and manufacturing markets.

Housing inventory, a leading indicator of the housing market, has shown improvement. The number of homes for sale is shown to have gone down and the housing price is expected to rise. Also, the slump in the housing market is said to come to an end, as buyers are motivated by lower home prices and lower interest rates on mortgages, while there are tax incentives for first-time home buyers. As a result, pending sales of existing homes has increased for the fourth consecutive month, as said by National Association of Realtors.

There are optimistic signs in the labour market. Layoffs are slowing, and unemployment claims are starting to decline in July. Although unemployment rates is usually a lagging indicator in predicting economic cycle recovery, it is believed that unemployment rates is a coincidental indicator as the current recession is caused by a credit bubble

New data on manufacturing market showed activity is stabilizing after a prolonged and stiff slide. Bernard Baumohl, chief global economist of a forecasting firm, Economic Outlook Group, said that the hemorrhaging has peaked and that we are on the other side of the recession this summer. He mentioned that average weekly overtime at factories was up to 2.8 hours in June 2009, showing that while companies aren't yet ready to hire, they are getting healthier.

An example of a manufacturing company that could have surfaced from the recession is General Motors (GM). Recent news has reported that it is expected to emerge from bankruptcy as a leaner company, less than a month and a half after it filed for bankruptcy protection from its creditors.

Besides, Europe's biggest carmaker, Volkswagen (VOW), reported that it delivered more cars for a second consecutive month in June as the German government incentives motivated purchases. Its sales was said to increase by about 6 per cent in June, as compared to a 1.5 per cent growth in May.

Learn more about this author, Barnaby Meins.
Click here to send this author comments or questions.