Canaccord Capital’s Michael Manford says that other forecasters are being too timid in predicting a slow economic recovery.

Manford says that the pace of recovery will be better than advertised. “After suffering through a recessionette, the economy will likely post about 2-2.5% real growth in the first quarter and a decent 4-4.5% average over the last three quarters of this year, all at annual rates,” he predicts in a report out today.

“The financial community is all a-buzz with the pace of this recovery (yes, we are in one) and even Alan Greenspan is trying to talk down expectations. Yet the economy continues to surprise, and on the upside for a change,” he notes. He believes that there are more upside surprises to come.

“The bears out there, sorry, the double-dippers, are focusing on the consumer as the culprit. We’ve heard all sorts of arguments about bonuses being trimmed, employment drops, confidence slipping and the ominous debt bomb. In essence, what we have heard is a lot of talk from people who don’t seem to know economics. The driving force behind consumer spending is income growth. You can talk all you want about confidence, but its impact is very, very small.”

“The only limiting factors to the expansion of consumer spending are the debt load, which can be handled, and employment growth,” he says. “Meanwhile, what everyone seems to be missing is that there are areas in the US economy that have been through every bit as bad a time as in past recessions. The industrial side of the economy and its partners, the cyclical areas, have been through the deepest drop since the 1980-82 double-dipper. And this is where the real power is going to come from for the recovery.” The only dark spot he sees is the tech area, which really is battered.

“What is more exciting is that the industrial and cyclical areas may well see rebounds in real production levels of as much as 10% by the middle of next year, compared to 2001 year-end numbers. And that suggests that the industrial and cyclical areas of the economy will post barn-burning earnings growth numbers over the next 18 months. No modesty around here!”