With a strong labor market, stubbornly high inflation, and a presidential election around the corner, the near-term economic outlook is filled with uncertainty. Companies are preparing for possible hard times ahead by becoming more efficient and focusing more on margin improvements and liquidity.
In preparation for a potential slowdown in growth and COVID-induced parabolic demand growth that in most instances has now normalized, some companies have begun to right-size their physical footprint and rationalize supply chain requirements. Couple this with the ongoing effort to bring people back to the office to increase productivity and efficiencies while tightening expenses and managing conservative budgets. While the C-suite is attempting to get back to business as usual, employees have become accustomed to the flexibility of remote work options. Being able to keep productivity and morale high through the right organizational structure and use of technology will be key to company success.
As we enter the fourth quarter of the year, it is time to plan and prepare for 2024. The past few years have presented surprises and shocks to both the global economy and how businesses operate… and 2024 is likely no different. Global growth is expected to slow. Inflation, while lower, remains above target levels, resulting in 10-year treasury yields that have not been seen since 2007. While consumers have been resilient due to a strong labor market with unemployment at 3.80%, recent commentary from retailers and higher-end luxury goods providers has noted a decline in spending. Growth through acquisition continues at a slow pace as public offerings have rebounded with a stronger equity market.
1 https://www.cnbc.com/2023/07/25/what-new-norm-of-slower-chinese-growth-could-mean-for-the-global-economy.html
2 https://www.capitaliq.com/CIQDotNet/MacroEconomics/EconomicSeries.aspx?economicEntityId=578866831
3https://www.capitaliq.com/CIQDotNet/IndustryIntelligence/mandaanalysis.aspx
4https://www.cnn.com/2023/04/12/business/jpmorgan-return-to-office-five-days/index.html
© Copyright 2023. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
