Economic prospects brighten in Europe
Prospects for economic recovery are more promising in Europe and Japan than in the United States and Canada, according to the Conference Board's International Economic Scoreboard, released Aug. 30.
The leading indexes in West Germany, the United Kingdom, France, Italy, and Japan have registered positive if modest growth rates since earlier this year. The indexes in the US and Canada, however, have continued to decline, although at a slower pace than earlier this year.
''A world economic recovery hinges on an upswing in the US and Canada, which is still problematical,'' the analysis concludes.
Latest data show the leading indexes advancing at an annual rate of 5 percent in Italy, 4 percent in Britain, West Germany, and France, and 3 percent in Japan. Leading indexes have declined 6 percent in the US and 8 percent in Canada.
The seven major industrial countries have faced productivity problems. All have experienced slowdowns in the growth of output per employee-hour since the early 1970s.
The analysis reveals a clear, if imprecise, link between a nation's leading index and short-term swing in productivity growth. Faster growth in a country's leading index is likely to be accompanied by faster growth in its output per hour.
Currently, signs of productivity growth are stronger in Europe than in either the US or Japan. The striking productivity improvement in Britain since 1980 is firmly based, since the leading index there has been steadily climbing. West Germany has also registered gains (although they are modest) in its leading index and overall productivity. In the US a slower decline in the leading index has been accompanied by a very small improvement in productivity. In Japan, the leading index hasd moved up, but productivity has not.