Over the last month it has become clear that the much vaunted economic recovery in the western economies has been spluttering. Despite positive results in the luxury goods sector in the first half of 2010 from companies such as Hermes, LVMH and Gucci there are signs that there may still be a long way to go before the recovery continues a firm upward path.

The main concern of economists – and the stock markets – has been the failure to create new jobs on a sustainable basis. Official jobless figures in the US are still just below 10% (even though some critics claim that the figures have been heavily massaged); the EU’s rate is similar running at 9.6%.

The problem is that now huge capital injections have dried up there are not enough consumers with disposable income to continue the necessary growth push fueled by consumer purchase.  The car scrappage schemes both in Europe and the US have now ended which gave sales a massive albeit artificial boost. The stock markets are wilting and oil prices, which are an excellent barometer of expected economic growth, have been sliding.

China is still the beacon most economists point to with its economy continuing to grow at more than 10% this year. But is China qualified enough or strong enough to take up the slack? That’s the question many western exporters have to answer if they are to continue to invest in China.

How do you see the economic outlook for the rest of the year and going into 2011? Have your say in the comments section.