Belfast Telegraph

Monday 28 July 2014

US sees the light while we're waiting for dawn

The darkest hour is before the dawn, apparently. That may well be the case but if you look at the global economy then you'd be forgiven for thinking the world has started spinning in reverse.

That's because the US looks to be enjoying the first rays of sunshine during its dawn while we're still going through our darkest hour, one characterised by a bottleneck in the financial system and a lack of confidence so acute we're struggling to be heard.

A lunchtime trip to Newry –a region which, by the way, always excels when it comes to offering hospitality at business events – revealed that we're not alone.

At the FPM Accountants offices a meeting of PrimeGlobal, an association of independent accountants from throughout the UK and Ireland, gave a good insight into the economy and revealed nearly every other region is suffering from the same problems, although some are finding ingenious ways around the biggest obstacles.

For instance, companies in the Midlands of England wanting to borrow up to £1m are using Crowd Funding to great effect and finding funding deals can be completed in a matter of hours rather than being dragged out for weeks or months before being rejected.

There were, however, representatives from one region which has shaken off much of last vestiges of recession – and that's London.

There confidence is back with a vengeance and the tap regulating the flow of credit is turning in the right direction.

While such a disparity may seem like bad news for us in Northern Ireland, and indeed for the other region representatives from across the UK and Ireland, it actually bodes well for us in the longer term.

The financial capitals of London, Singapore and New York were the first to be hit by the global downturn and are proving to the first to bounce back.

There's no doubt we've been hit harder than most, what with a much more exaggerated boom and bust in the property market, but we will eventually follow suit, albeit with a bit of a lag. That's why yesterday's new high for the Dow Jones Industrial Average (DJIA) all the more pleasing to see.

The significance of the move cannot be underestimated.

Not only did the index reach a new high, it posted an all-time high, a move which suggests the health of the US economy in the US is not just on a par with its state before 2007's financial meltdown but has grown.

It's obvious from the recent stalemate in the country's political system and the fact much of the latest rally has been prompted by commitment by the US Federal Reserve to maintain a level of quantative easing that the region still has a lot of work to do but this latest milestone gives hope to us all.

If we can tap into the prosperity in the likes of the US and London then we will soon be experiencing the same dawn which others are already enjoying.

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