The Organization for Economic Co-operation and Development (OECD) expects the economy to improve slowly over the next two years. In its Economic Outlook, released in December 2010, the OECD predicts growth of 2.3% for OECD countries in 2011, compared with a 2.8% increase in 2010. It expects emerging markets to grow more rapidly, helping to put global trade growth at more than 8.0% in 2011. Output and trade growth have decreased since the beginning of 2010, and temporary growth drivers like the lift from fiscal support measures have diminished, slowing growth. According to the International Monetary Fund’s (IMF) World Economic Outlook, released in December 2010, financial conditions are starting to return to normal, but internal and external rebalancing are happening slowly, leading to a fragile global recovery. The December 2010 “Global Business Outlook” survey conducted by Duke University and CFO, which interviewed 848 CFOs from public and private companies worldwide, showed an improved corporate attitude as respondents expect spending to increase. The survey indicates that CFOs expect to increase capital spending by 9%.

North America

The OECD predicts that US GDP will grow 2.2% in 2011, following a 2.7% increase in 2010. The IMF forecasts 2.3% growth after a 2.6% increase in 2010 and states that the economy is lagging mostly due to sluggish personal consumption. The OECD suggests the economy is on the road to recovery due to substantial financial-stabilization measures and modest cyclical improvement. Surveyed CFOs at 481 US companies indicated that their capital spending will increase 8.9% and R&D spending will increase 3.8% this year.

Europe

The OECD predicts that GDP for Euro Area countries will grow 1.7% in 2011, identical to 2010. Though strong exports and a rise in consumption and investment should aid the recovery, the pace of recovery is likely to be slow due to austerity measures. The OECD estimates that German GDP will increase 2.5% after 2010’s 3.5% increase, while the IMF predicts 2.0% growth, following 3.3% growth last year. Both the OECD and IMF predict that French GDP growth will be 1.6% in 2011, the same as 2010. The OECD and IMF estimate that UK GDP will grow 1.7% and 2.0% after growing 1.8% and 1.7% in 2010, respectively. According to the CFO survey of 136 European firms, spending on capital expenditures and R&D will increase 6.8% and 4.6%, respectively.

Asia

In its Asian Development Outlook 2010, updated in December 2010, the Asian Development Bank (ADB) predicts Asia’s GDP will grow 7.3% in 2011, down from 8.2% growth in 2010. Developing Asia, which includes 44 developing countries, grew more strongly than anticipated in 2010 due to strong exports, private demand and stimulus-policy effects. Concerns for 2011 include the strength of the global economy, the sustainability of private domestic demand and the management of capital inflows and exchange rates. One hundred thirty-one respondents to the CFO survey at Asian firms said capital spending and R&D spending will grow 17.3% and 5.6% this year, respectively. The IMF forecasts Indian GDP to increase 8.4%, following a 9.7% increase in 2010, while the ADB estimates India’s GDP will grow 8.7% in 2011, up from 8.5% growth in 2010.

Japan

The ADB predicts Japan’s GDP growth will slow to 1.4% in 2011 after a 2.5% increase last year. Last year’s growth, attributed to private consumption, will slump this year because of a slowdown in US export demand and a fast-rising currency value. The OECD predicts Japanese GDP will grow 1.7%, down from 3.7% in 2010, and the IMF expects growth of 1.5% after an increase of 2.8%. The OECD reports that although new fiscal stimulus packages announced last fall will help support activity, high unemployment, the rate of core deflation and the decline of asset prices will contribute to the decrease in growth.

China

The OECD estimates that Chinese GDP will grow 9.3% in 2011, after increasing 10.1% in 2010, due to the diminishing effects of the stimulus package and slower export growth. The IMF and the ADB forecast growth of 9.6% and 9.1%, after growth of 10.5% and 9.6% in 2010, respectively. The 100 Chinese CFOs surveyed plan to increase R&D and capital expenditures by 7.1% and 11.3% in 2011, respectively.

Latin America

The IMF estimates that the GDP of Latin America and the Caribbean will grow 4.0% this year, after growth of 5.7% last year. It predicts Chile’s GDP will increase 6%, after a 5% increase. The OECD estimates that Chile’s GDP will grow 6.2%, following 5.2% growth in 2010. For Brazil, the IMF estimates GDP will grow 4.1%, after rising 7.5% in 2010. According to the OECD, Brazil’s economy has slowed substantially from strong growth in early 2010, but is expected to rebound, thanks to income gains and strong credit expansion. Growth of 4.3% is expected, compared with 7.5% growth in 2010.

 Bar Graph: Regional Sales Growth Predictions for Analytical Instruments for 2011

 Japan             4.0%

 Rest of World     4.3%

 Europe            5.0%

 US & Canada       5.8%

 Latin America     7.2%

 Asia Pacific      7.5%

 China             8.7%