Executives are facing one of the most complicated planning environments over the past decade. High input costs, FX volatility, uncertain policies in major markets like China and the US, and political risks across a broad swathe of markets, all create huge uncertainty for next year. Even as companies may have enjoyed solid performance so far in 2022, the risks of demand destruction and rising price sensitivity in 2023 weigh on corporate plans, while upside opportunities are attracting a huge amount of competition.
We expect global growth in 2023 at 1.6% YOY, consistent with a recession in a number of major markets, but closer to the early 1990s recession than the 1970s. We also expect significant upside potential for recovery in late 2023 which will require companies to ensure capacity, innovation, and staffing are able to capture some of that upside opportunity even as they build resilient 2023 plans.
What should you do next?
- Review customer segmentation assumptions
- Manage pricing carefully
- Run a deep evaluation of supply chain resilience
We also recommend that your people strategies should prioritize strengthening capabilities that support you in capturing the recovery through new products, strong customer relationships, and marketing prowess. It’s a bleak outlook, but one that calls for thinking long-term and being ready to capture opportunities as soon as the clouds start to clear – which we think is likely to be as early as mid-late 2023.
We expect recessions in late 2022-early 2023 across major markets including WEUR and the US, while China’s outlook is one of the biggest drivers of uncertainty globally
GDP growth, % YOY, 2023f
To support your internal alignment on these issues and drive accurate 2023 planning assumptions, we suggest reviewing our Global outlook for 2023. Let FrontierView help your teams in aligning on a specific, actionable view on how the global environment will affect your business and how you can thrive despite external headwinds.
Download an Executive Summary of the Global Outlook for 2023
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