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But almost everyone else is in trouble

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"But almost everyone else is in trouble."Mr Vaughan believes the economy will bottom out next year just short of recession. He is forecasting the economy will grow 1.3 per cent in 1999. This is more pessimistic than the current Treasury forecast, which stands at 2 per cent.Below is Mr Vaughan's sector by sector thumb-nail sketch of the economy. Graphs indicate the growth in each sector between the third quarter of 1997 - the peak of the current economic cycle - to 30 June.This sector of the economy comprises the City, which is booming in spite of the slowdown in the economy as a whole But even here things are cooling off.

In the first quarter of the year average earnings were growing 13 per cent This was the result of bonuses and the like. Those average earnings collapsed to 3 per cent in the second quarter.This is the North Sea oil and gas sector, which is erratic. Without the upsurge in growthhere the economy would have been significantly worse The upsurge is unlikely to continue. A Royal Bank of Scotland survey shows that revenues coming out of the North Sea are now at their lowest level since January 1983.This is the telecoms sector, the internet and all that But even this sector is coming off.

It's also the transport sector and it indicates that fewer goods are being shipped.This sector is way off Its performance is worse than the economy as a whole. It shows how the corporate sector is thinking because hotel bookings are driven by companies Hotel bookings are all about conferencing today. The graph here shows a sharp slide in corporate confidence.Like North Sea oil and gas, this is an erratic sector The use of utilities is driven by the weather. City investors looking to time the puncturing of the bubble that I see distorting the US economy are playing a dangerous, if not impossible, game. The New World Order may be about to crack - not because of bin Laden and his camps, but because of the spread of the Asian financial crisis to Russia and Latin America and the prospect of lower earnings by US companies dependent on these withering markets.Americans don't know what to do about this Most are simply crossing their fingers. These flows depend on the continuing extension of US-style market economies from region to region But since last October this process has gone into reverse. The present cornucopia of goods flooding US shop floors at dirt cheap prices is the result of the favourable trade and financial flows.

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