The outlook for the world economy for the next two years is not bright. The World Economic
Outlook Update (January 2023), the latest forecast from the International Monetary Fund, concludes:
Global growth is projected to fall from an estimated 3.4 percent in 2022 to 2.9 percent in 2023, then rise to 3.1 percent in 2024. The forecast for 2023 is 0.2 percentage point higher than predicted in the October 2022 World Economic Outlook (WEO) but below the historical (2000–19) average of 3.8 percent.
Several factors for the sluggish activity are suggested – rising central bank interest rates, the
war in Ukraine, and Covid-19 spreading in China. The Update also notes:
Global inflation is expected to fall from 8.8 percent in 2022 to 6.6 percent in 2023 and 4.3 percent in 2024, still above pre-pandemic (2017–19) levels of about 3.5 percent.
Digging into the numbers, the outlook predicts that the US economy will grow 1.4%
in 2023 and 1.0% in 2024. In contrast, the UK economy is forecast to shrink by -0.6% in 2023
and return to modest growth of 0.9% in 2024.
For British companies, strong economic headwinds mean the next two years will be tough: the cost of borrowing capital for investment looks to increase; the prices of materials will continue to rise; consumer demand is weakening; and recruiting and retaining staff continues to be difficult. There are also pressures to protect local producers in overseas markets through tariffs on imports or government subsidies in industries ranging from car manufacturing to green energy to semiconductor production.
It’s taking a toll. In the UK, the latest review of the Office of National Statistics (ONS) shows that companies are failing at the fastest rate since 2009. Businesses in the construction, retail, accommodation, and food sectors are being particularly hard hit.
At ATXponential, we say “Go West!” Look to America! British companies eager for sales growth should examine opportunities in the 50 states. Though sterling has rebounded from its crisis levels in the Summer of 2022, British goods and services are still price competitive in the USA.
The UK’s reputation for design, innovation, and quality is appreciated in the ‘Land of the Free and the Home of the Brave’. Do the homework and build a plan sooner rather than later.
Contact us at ATXponential to explore your options.