California Travel & Tourism Outlook April 2013
California travel forecast overview California s travel economy expanded in 2012, driven primarily by domestic visitation and slowly improving US economic conditions. International visitation is estimated to have come in below expectations due to stagnant visitation from Mexico and ongoing weakness in Europe. Overall visitor volume is estimated to have finished 2012 with growth at 3.0%, versus previous expectations of 2.5%. Leisure travel is estimated to have outpaced business travel in 2012 and these expectations were revised up from the October forecast. Overnight travel is expected to have outpaced day travel, and a tightening lodging market led to robust price growth in key California metro area markets. Visitors from Asia and Latin America are driving growth in international visitation, while UK and France are the key drags in Europe. Expansion continued in early 2013, as room demand, occupancy, and prices increased in the first quarter, even if at a slower rate than in 2012. The forecast calls for total visitation growth of 2.3% in 2013, weaker than in 2012, but stronger than expectations of the previous forecast. 2
Economic overview Austerity is kicking in in the US, but fiscal adjustments will not significantly undermine growth. Strengths will outweigh the fiscal drag and US economic indicators point toward further expansion. Labor and housing markets are stronger than a year ago, and slowly improving business and consumer confidence will support spending and hiring in 2013. Although restrained, US near term prospects are better than in Europe, where fiscal drag is more severe. Emerging markets in Asia and Latin America continue to lead global growth. The Oxford Economics US forecast expects growth of 2.2% in 2013 and 3.0% in 2013. Global GDP will expand 2.3% in 2013 and 3.3% in 2014. Risks are more balanced than 6 months ago, but still weighted to the downside. 3
California travel forecast summary California Tourism Summary (Annual % change) 2010 2011 2012 2013 2014 2015 2016 Total Visits 5.9% 3.3% 3.0% 2.3% 2.4% 2.5% 2.8% Domestic Total Visits 5.6% 2.8% 3.0% 2.0% 2.1% 2.3% 2.5% Leisure Visits 4.9% 3.1% 3.1% 2.1% 2.2% 2.4% 2.6% International Total % change 9.0% 9.1% 2.5% 4.8% 5.0% 5.0% 5.3% Overseas 18.2% 10.5% 2.9% 5.2% 5.4% 5.7% 6.0% Mexico 1.8% 8.5% 1.9% 4.6% 4.8% 4.4% 4.9% Canada 10.0% 6.4% 3.6% 4.6% 4.6% 4.7% 4.1% Leisure % change 10.6% 9.1% 2.5% 4.5% 5.1% 5.5% 5.6% Overseas 18.2% 10.5% 2.9% 4.7% 5.8% 6.6% 6.6% Mexico 5.3% 8.5% 1.9% 4.4% 4.9% 5.0% 5.2% Canada 10.0% 6.4% 3.6% 3.8% 4.1% 4.0% 4.0% Total Expenditures ($ billions) 95.1 101.8 106.4 112.1 118.6 126.4 135.4 % change 8.4% 7.1% 4.5% 5.3% 5.8% 6.5% 7.2% Domestic 78.1 83.9 87.5 91.7 96.6 102.4 109.1 % change 8.3% 7.5% 4.2% 4.9% 5.3% 6.0% 6.5% International 17.0 17.9 19.0 20.4 22.0 23.9 26.4 % change 8.9% 5.2% 6.1% 7.3% 8.0% 8.9% 10.1% Source: Tourism Economics. Historical sources: TNS Global (domestic); CIC Research, OTTI (international); Dean Runyan (expenditures) 4
California travel forecast summary Forecast Comparison Percentage Point Change in the Forecast, May 2013 versus October 2012 Vintage 2010 2011 2012 2013 2014 2015 2016 Total Visits - - 0.5 0.1 (0.1) (0.2) Domestic Total Visits - - 0.9 0.1 (0.1) (0.2) Leisure Visits - - 0.9 0.1 (0.1) (0.2) International Total % change - - (3.3) (0.3) (0.0) 0.2 Overseas - - (2.2) (0.4) (0.1) 0.3 Mexico - - (5.0) (0.2) 0.1 0.2 Canada - - 0.1 (0.2) (0.3) (0.2) Leisure % change - - (3.0) (0.0) 0.7 1.2 Overseas - - (2.2) (0.4) 0.8 1.0 Mexico - - (4.7) 0.3 1.0 1.7 Canada - - 1.0 (0.2) (0.2) 0.2 Total Expenditures % change - - (1.9) 0.2 0.5 0.0 Domestic % change - - (1.4) 0.4 0.7 0.1 International % change - - (4.0) (0.6) (0.2) (0.1) 5 Source: Tourism Economics
California Travel Outlook SUMMARY 6
France Australia U.K. Netherlands South Korea Oceania Germany Mexico Total Overseas Japan Asia Argentina South America Brazil Recent performance: a decent start to 2013 The hotel sector continued to expand in early 2013, but at a slower rate than in 2012. Room demand grew 3.0% through March and prices were 4.3% higher than a year earlier. Growth in CA room demand is outpacing that of the nation, while ADR is keeping pace. The market tightened in 2012; occupancy rose 2.4 ppt to 68.8%, led by the large metro markets, San Francisco, LA, and Oakland. Demand from emerging economies in Asia and Latin America continue to drive international visitation, while European demand stagnates. 7 Hotel Performance Through March 2013 % change year ago; change in rate for occupancy 9 8 7 6 5 4 3 2 1 0 California Pacific US US Rooms sold Occupancy ADR RevPAR Source : STR Global International Arrivals in California % change year ago, through November 2012 25 20 15 10 5 0-5 -10-15 Source: Department of Commerce FIA Data
and the outlook for moderate growth holds Domestic visits to California are expected to slow down in the near term with growth of 2.0% and 2.1% in 2013 and 2014. A weaker international outlook versus the October 2012 vintage will temper the contributions to growth from Europe and emerging economies. Overseas markets will still lead growth over the forecast horizon, but at a slower pace than previously expected. International visitor spending will play an increasingly important role for California s tourism industry. California Total Visits annual % growth 20% 15% 10% 5% 0% -5% -10% Overseas Mexico -15% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sources : Tourism Economics, OTTI, CIC Research, TNS Global US 8
California Travel Outlook DOMESTIC FORECAST 9
Business and leisure travel Changes to the outlook were minor, including a slightly improved domestic forecast for 2013. Domestic leisure travel to California is expected to outpace business travel over the forecast horizon, as businesses are increasingly cost conscious, seek alternatives to physical meetings, and are weighed down by uncertainty over federal fiscal policy. Business travel to CA will still outpace that at the national level, as has been the case since 2010. Domestic Business Travel annual % growth 10% 8% 6% 4% CA domestic business travel Origin State weighted GDP CA Domestic Business and Leisure Visits % growth 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source : Tourism Economics US Domestic Leisure Travel annual % growth 6% 4% 2% Domestic Business (in Red) Domestic Leisure (in Blue) Origin State weighted GDP (orange) 2% 0% -2% -4% -6% US total domestic business travel 0% -2% -4% -6% CA domestic leisure travel (blue) US domestic leisure travel (red) 10-8% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source : Tourism Economics -8% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source : Tourism Economics
Day and overnight travel Domestic overnight travel will continue to outperform the overall travel market out to 2016. Fuel prices in CA were 5.6% higher in 2012 versus a year earlier and likely restrained some Day travel. Domestic visitor expenditures rose 5.9% in 2012 and are expected to grow 5.0% in 2013. Higher lodging and fuel prices and more confident visitors will contribute to spending growth. Returning room demand outpaced new supply in 2012 and this dynamic continued in early 2013. The higher occupancy rates are translating into increased pricing power for hoteliers, especially in San Jose, Sacramento, Oakland and Anaheim. 11 CA Domestic Day and Overnight Visits % growth 6% 4% 2% 0% -2% -4% -6% Domestic Day (red) -8% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source : Tourism Economics Total Domestic (orange) Domestic Visitor Expenditures % growth 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% Domestic Overnight (blue) -10% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sources: Dean Runyan, Tourism Economics
Domestic forecast growth Annual Person Trips to California (Annual % change) 2010 2011 2012 2013 2014 2015 2016 Domestic Total 4.7% 4.0% 3.0% 2.0% 2.1% 2.3% 2.5% Business 8.1% 5.2% 2.6% 1.9% 1.9% 1.9% 2.1% Leisure 4.0% 3.7% 3.1% 2.1% 2.2% 2.4% 2.6% Day 4.7% 3.6% 1.7% 1.9% 1.9% 2.1% 2.4% Overnight 4.7% 4.3% 4.2% 2.1% 2.3% 2.5% 2.6% Source: Tourism Economics. Historical sources: TNS Global (domestic); CIC Research, OTTI (international) Domestic Person Trips to California (Annual % change) 2010 2011 2012 2013 2014 2015 2016 Drive 6.9% 4.8% 3.3% 2.1% 2.2% 2.4% 2.5% Fly -3.5% 0.4% 2.1% 1.8% 1.8% 2.0% 2.3% Gateway 5.5% 3.0% 3.0% 1.8% 1.9% 2.1% 2.1% Non-Gateway 2.5% 4.8% 3.3% 2.1% 2.2% 2.5% 2.3% Paid Accommodation 5.5% 6.1% 4.0% 2.2% 2.9% 2.6% 2.5% Non-paid 3.4% 1.3% 4.6% 2.0% 1.4% 2.2% 2.7% Source: Tourism Economics. Historical sources: TNS Global, STR Gatew ay is defined as visitation to one or more of the follow ing metropolitan areas: San Diego, Anaheim-Orange County, Los Angeles, San Francisco Bay Area; Non-Gatew ay is defined as visitation to one or more non-gatew ay destinations. 12
Domestic leisure forecast growth by market Annual Domestic Leisure Trips to California (Annual % change) 2010 2011 2012 2013 2014 2015 2016 Total 4.9% 3.1% 3.1% 2.1% 2.2% 2.4% 2.6% California 6.8% 3.0% 3.3% 2.0% 2.0% 2.2% 2.5% Primary Markets 2.3% 5.2% 2.9% 1.4% 2.3% 2.4% 2.6% Arizona 9.0% 5.2% 3.1% 0.9% 1.8% 2.1% 2.3% Nevada -1.0% 6.3% 3.2% 0.3% 2.9% 2.3% 2.4% Oregon -0.2% 2.6% 2.8% 1.7% 2.5% 2.8% 3.1% Washington -1.1% 6.5% 2.1% 3.3% 1.8% 2.4% 2.6% Utah -4.9% 4.9% 3.4% 2.4% 3.0% 3.1% 3.3% Colorado 3.8% 5.1% 2.4% 2.0% 2.3% 2.9% 3.1% Opportunity Markets 1.6% 3.5% 3.0% 2.8% 3.0% 3.1% 3.2% Texas 2.0% 4.4% 3.8% 3.5% 3.8% 3.8% 3.9% New York 1.8% 1.2% 2.6% 2.1% 1.9% 2.0% 2.2% Illinois 0.7% 5.1% 2.1% 2.6% 2.8% 3.1% 3.2% Rest of US -8.5% 1.3% 2.4% 3.1% 3.3% 3.3% 3.2% Source: Tourism Economics. Historical sources: TNS Global Note on volatility of historical data and treatment in forecast: Due to smaller sample sizes and relatively smaller visitor volumes in absolute terms, the historical data of origin markets tends to be more volatile than total visitor volumes. 13
California Arizona Nevada Oregon Washington Utah Colorado Texas New York Illinois Domestic market comparisons Projected trip growth by source market Average annual growth in visitors, 2012 to 2016 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Source: Tourism Economics 14 Primary Markets Opportunity Markets Real State GDP by Origin Market % growth 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% California Primary Markets Opportunity Markets Rest of US -5% 2007 2009 2011 2013 2015 Source : Tourism Economics Forecast >>>>
California Travel Outlook INTERNATIONAL FORECAST 15
California will track the US International inbound travel to California fell behind the US in 2012, but will keep pace over the forecast horizon. Links to fast growing Asia, and limited exposure to a weak Europe will benefit CA tourism. Much of CA underperformance in 2012 stems from stagnant visitation from Mexico. European source markets underperformed in 2012 and the forecast calls for restrained demand out to 2016, even in Germany, the main engine of the European economy. CA International Inbound Travel Annual % growth 15% 10% 5% 0% -5% -10% -15% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Tourism Economics CA inbound travel (blue) US inbound travel (red) 16
Inbound leisure forecast growth Annual International Leisure Trips to California (Annual % change) 2010 2011 2012 2013 2014 2015 2016 Total 10.6% 6.0% 2.5% 4.5% 5.1% 5.5% 5.6% China 49.1% 34.8% 38.8% 13.8% 15.1% 16.3% 14.0% India 17.2% 8.7% 7.0% 7.3% 7.5% 9.0% 9.6% Japan 19.3% 5.4% 5.2% 3.3% 4.6% 5.2% 5.3% South Korea 40.8% -0.5% -0.3% 4.8% 6.3% 7.5% 8.9% Australia 33.2% -2.2% -3.0% 4.5% 6.9% 7.4% 6.1% United Kingdom 3.0% -3.0% -3.9% 1.1% 1.5% 1.5% 2.8% Germany 9.3% 3.1% -0.6% 3.8% 4.1% 4.6% 5.3% France 38.8% 17.0% -16.9% 0.8% 1.3% 2.0% 2.4% Scandanavia 21.3% 4.5% 5.6% 0.7% 0.8% 1.2% 3.1% South America 20.2% 19.9% 16.0% 6.5% 7.1% 8.8% 11.8% Canada 10.0% 6.4% 3.6% 3.8% 4.1% 4.0% 4.0% Mexico 5.3% 8.5% 1.9% 4.4% 4.9% 5.0% 5.2% Rest of World 11.8% -4.9% 5.3% 5.6% 6.5% 7.0% 5.9% Source: Tourism Economics. Historical sources: CIC Research, OTTI Note on volatility of historical data and treatment in forecast: Due to smaller sample sizes and relatively smaller visitor volumes in absolute terms, the historical data of origin markets tends to be more volatile than total visitor volumes. 17
China South America India South Korea Australia Mexico Japan Germany Canada United Kingdom France Scandanavia International market comparisons Projected international leisure visits by market Average annual growth, 2012-2016 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Source: Tourism Economics 18
California Travel Outlook VISITOR SPENDING 19
Spending growth will moderate slightly in 2013 Domestic visitor spending still trumps international, but international visitors 15% are accounting for an increasing 10% portion of the total. 5% The international outlook for 2013 is 0% slightly downgraded from October -5% 2012, but international visitor spending -10% will continue to make an outsized -15% contribution to spending growth out to 2016. -20% 20 California Visitor Expenditures % growth Total (blue) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sources: Dean Runyan, Tourism Economics Direct Visitor Expenditures International (orange) Domestic (red) ($ Billions) 2010 2011 2012 2013 2014 2015 2016 Total Expenditures 95.1 101.8 106.4 112.1 118.6 126.4 135.4 % change 8.4% 7.1% 4.5% 5.3% 5.8% 6.5% 7.2% Domestic 78.1 83.9 87.5 91.7 96.6 102.4 109.1 % change 8.3% 7.5% 4.2% 4.9% 5.3% 6.0% 6.5% International 17.0 17.9 19.0 20.4 22.0 23.9 26.4 % change 8.9% 5.2% 6.1% 7.3% 8.0% 8.9% 10.1% Source: Tourism Economics. Historical sources: Dean Runyan, CIC Research
Spending will pick up pace beyond 2013 Expenditures Will Outpace Visitors Index, 2007 = 100 170 160 150 Domestic International 140 130 120 Solid lines = visitors Dashed lines = expenditures 110 100 90 80 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Tourism Economics 21
Macro forecast assumptions / CA travel model drivers US & GLOBAL ECONOMIES 22
Key points The key driver for California tourism is the ongoing US recovery. Although restrained, near term prospects are much stronger than in Europe. Emerging markets in Asia and Latin America continue to lead global growth. Austerity is kicking in in the US, but strengths will outweigh the drag from fiscal adjustments. US economic indicators point toward further expansion. Labor and housing markets are slowly healing, and improvements in business and consumer confidence will support spending and hiring in 2013. The Oxford Economics US forecast calls for growth of 2.2% in 2013 and 3.0% in 2013. Global GDP will expand 2.3% in 2013 and 3.3% in 2014. Risks are more balanced, but those to the downside still outweigh upside risks. 23
Oxford Economics baseline forecast 24 World GDP Growth % Change on Previous Year 2010 2011 2012 2013 2014 US 2.4 1.8 2.2 2.2 3.0 Japan 4.7-0.5 2.0 1.0 2.5 Eurozone 2.0 1.5-0.5-0.5 1.0 of which: Germany 4.0 3.1 0.9 0.5 1.6 France 1.6 1.7 0.0-0.3 0.9 Italy 1.7 0.5-2.4-1.9 0.3 UK 1.8 1.0 0.3 0.7 1.9 China 10.4 9.3 7.8 8.2 8.5 India 9.7 7.5 5.0 5.2 7.2 Other Asia 7.2 3.8 2.7 3.6 4.5 Mexico 5.3 3.9 3.9 3.5 4.8 Brazil 7.5 2.7 0.9 3.1 4.4 Other Latin America 1.9 7.0 4.5 2.7 3.8 Eastern Europe 3.6 3.7 2.8 2.1 3.3 MENA 5.8 5.1 4.1 4.3 5.0 World 3.6 2.9 2.3 2.3 3.3 World (PPP) 4.6 3.6 3.1 3.4 4.1
Global growth still weak G7 & Emerging Markets: GDP growth % year 10 8 6 Emerging Markets 4 2 0 G7-2 -4 25-6 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Source: Oxford Economics
but at a turning point? World: Stockmarkets Jan 1996=100 300 S&P 500 250 MSCI Emerging Markets index 200 150 100 FTSE 100 50 Nikkei 26 0 1996 1998 2000 2002 2004 2006 2008 2010 2012 Source: Haver Analytics
Worst of the fiscal cliff has been avoided US: New orders Bn $ 250 230 210 190 170 150 Durable goods orders (LHS) Nondefense capital goods excluding aircraft (RHS) Bn $ 80 75 70 65 60 55 50 130 45 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 27 Source: Census Bureau/Haver Analytics
ECB has averted near-term Eurozone collapse 28
Signs that Chinese downturn is coming to an end 29 China: Industrial ouput, retail sales & exports % year % year 25 Retail sales 60 (LHS) 50 20 15 10 5 0 Exports (US$) (RHS) Industrial output (LHS) 2008 2009 2010 2011 2012 2013 Source: NBS 40 30 20 10 0-10 -20-30 -40
So risk has greatly diminished 30
despite austerity spreading to US 31
Austerity has strangled UK growth 32
But critical differences with European austerity Don t have the excessive degree of tightening being enforced in some European economies Don t have problem of monetary union without banking and fiscal union Don t have overly-cautious central bank But, then, neither does the UK and austerity has crippled its growth So, why are we optimistic about US growth prospects? 33
Sequencing of deleveraging is critical - banks Financial corporation debt/gdp ratios Financial corporation debt as a % of GDP 300 250 200 150 100 34 50 US UK EuroZone Japan 0 1999 2001 2003 2005 2007 2009 2011 2013 Source: Oxford Economics
so credit conditions in US much less severe Global credit standards surveys Balance tightening (+)/loosening (-) corporate credit 100 80 60 Tightening credit Eurozone US UK 40 20 0 35-20 Loosening credit -40 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source : Oxford Economics/Haver Analytics
with US banking sector now lending again 36
Sequencing of deleveraging is critical - households 37
Contrasting behavior in house prices House Prices Index, 2007=100 120 110 100 90 80 70 60 50 US Japan UK EuroZone 38 40 2000 2002 2004 2006 2008 2010 2012 Source: Oxford Economics
So US consumer now has some momentum 39
and is willing and able to borrow again US: Consumer credit Bn $ 3000 2500 2000 Level (LHS) % 3.0 2.5 2.0 1500 1000 500 0-500 Growth (RHS) 1.5 1.0 0.5 0.0-0.5 40-1000 -1.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Federal Reserve/Haver Analytics
Home prices are also rebounding strongly 41
fuelling construction US: Housing activity Millions 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 Starts Permits 2002 2004 2006 2008 2010 2012 Source: Census Bureau/Haver Analytics 42
Spending will also be supported by pent-up demand 43
Lower event risk helping manufacturing as well US: Durable goods orders Bn $ 270 250 230 210 190 Non defense capital goods (RHS) Bn $ 95 85 75 65 55 170 150 Total (LHS) 45 35 44 130 25 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Census Bureau/Haver Analytics
as capacity utilization nears pre-crisis levels 45
US manufacturing now very competitive Unit labour costs in manufacturing in US$ 2000=100 300 260 China 220 Brazil 180 India 140 Germany 100 US Mexico 60 2000 2002 2004 2006 2008 2010 2012 46 Source : Oxford Economics/Haver Analytics
at its most favorable for over 30 years US: Relative unit labour costs 2008=100 220 200 180 160 140 120 100 47 80 1980 1984 1988 1992 1996 2000 2004 2008 2012 Source : Oxford Economics
US manufacturing output recovering healthily Manufacturing Production Index: 2007Q1 = 100 115 110 105 100 95 90 85 80 US EuroZone UK Japan 48 75 2007 2008 2009 2010 2011 2012 Source: Oxford Economics
and investment back to pre-recession levels 49
Striking contrast between Brazil and Mexico Unit labour costs in manufacturing in US$ 2000=100 300 260 China 220 Brazil 180 India 140 Germany 100 US Mexico 60 2000 2002 2004 2006 2008 2010 2012 50 Source : Oxford Economics/Haver Analytics
with Brazil struggling to compete Brazil: Industrial output & retail sales volumes 2007=100 (seasonally adjusted) 160 150 140 130 Retail sales 120 110 100 90 80 Industrial output 51 70 2000 2002 2004 2006 2008 2010 2012 Source: IBGE
but Mexico becoming major production base Mexico vehicle production Units, millions 3.50 3.00 2.50 2.00 1.50 Domestic market Exports 1.00 0.50 0.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source : Oxford Economics/Haver Analytics 52
Energy boom also driving growth 53
So US can still grow despite austerity Contribution to the Recovery Baseline GDP Forecast Of which: Fiscal Tightening Shale Production Boom Housing Recovery Competitiveness Other (percentage changes) 2013 2014 2015 2016 2017 2.2 3.0 3.2 3.2 3.1-1.5-0.3-0.1 0.0 0.0 0.3 0.3 0.3 0.3 0.3 0.2 0.3 0.3 0.3 0.2 0.9 0.9 0.8 0.7 0.5 2.3 1.8 1.8 1.9 2.1 54
Policy mistakes Forecast risks are more balanced Disorderly unwinding of QE (5%) Growth initially surprises on the upside Inflation starts rising, led by higher commodity prices. Central banks initially accommodate, keeping QE programmes untouched Inflation scare in bond markets. Rates rise Central banks respond with sharp unwinding of QE Eurozone exits (20%) Fiscal austerity in peripheral countries becomes unbearable: No growth pushes unemployment yet higher. Pro-exit parties gain popularity. No real progress on banking and fiscal union. Run on banks, debt defaults 6 or more countries exit Eurozone in 2014 Faster upturns in US & EMs (15%) Resolution of outstanding fiscal issues encourages investment and hiring in the US, offsetting impact of fiscal tightening Japanese policy easing boosts growth across Asia Momentum in EMs builds as trade picks up Business and consumer confidence rise as conditions improve. Oxford forecast (55%) Steps to ensure Eurozone survival are taken, although they are not enough to kick start significant growth Risk premia fall, and consumer and business confidence gradually recover Recovery limited by public and private deleveraging and weak job growth EMs robust as policy eases and growing middle class support domestic demand 55 Corporate stress
For more information: info@tourismeconomics.com 610.995.9600 56