This week, OCO Global released a comprehensive report on 2023 trade and investment trends, along with their forecasts for 2024. Despite positive macro-level indicators, uncertainties persist in the world.
While 2023 saw the end of the COVID-19 health emergency and a return to normal supply chains, ongoing events in the Red Sea highlight the accompanying uncertainty. Climate change efforts increased, especially in the US with the Inflation Reduction Act reshaping investments and presenting opportunities based on well-researched location assessments.
Despite the positive developments, obstacles to growth persist. Global growth is expected to slow in 2024 due to geopolitical conflicts and rising protectionism. Trade data for 2023 revealed a rise in friend-shoring, where politically aligned countries strengthened trade links.
Global investment faced a decline in 2023 after a rebound in 2021. Greenfield FDI outperformed M&A, with declining performance in 2023 below the ten-year average. However, the value of capital investment and jobs created continued to rise, driven by green initiatives and supply chain reconfigurations.
COVID-19’s impact on FDI persists, with only half of the top twenty markets recovering to pre-pandemic investment levels. High-growth markets like the UAE, India, Ireland, Spain, and Poland thrived due to strong investments in software, IT, business services, and financial services.
The analysis of sectors revealed six high-growth areas recovering strongly from COVID-19, such as semiconductors, space and defense, renewable energy, electrical components, biotechnology, and software and IT.
Looking ahead to 2024, OCO’s predictions highlight a mix of challenges and opportunities. The global economy will increasingly revolve around politically aligned trading blocs. An Election Supercycle in countries representing 60% of global GDP will elevate trade tensions. The battle for incentives will intensify, generative AI will expand into more business uses, and supply chain issues will resurface, requiring companies to adapt.
Success in 2024 hinges on managing complexity arising from world events and political decisions. For investment promotion, understanding trends and positioning locations as solutions is crucial, while companies must navigate challenges and leverage incentives.
With over 20 years of experience, OCO Global offers expertise in strategy development and location assessment.
Read OCO’s full report here
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