Commenting on economic trends present through the last decade, Principal Global Investors chief global economist Bob Baur said growth in the region was “clearly improving” and that the present global upturn is widening.
“The US and Eurozone economies are both advancing healthily,” he said.
“Business and household confidence is spreading; faster nominal growth is giving profits a boost; green shoots of renewed capital spending are evident; wage growth is picking up; interest rates are catching the wave; and reflation is in the air.”
Mr Baur said the US was becoming more competitive against China for manufacturing, noting that the 6 million manufacturing sector jobs lost to China between the mid ‘90s and 2010 were beginning to return.
“With wages now several times higher, an appreciated currency and higher transport costs, China is not nearly as competitive as in the 1990s.
“So, the competition with US workers is less intense as manufacturing and other jobs are coming back,” he said.
Despite this improving growth story, Mr Baur cautioned investors that US economic growth “could slow considerably” towards the end of 2018.
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