Six critical global industries tell a story of uncertainty and change for 2017 and beyond:
- “Automotive” – Infrastructure spending, lighter regulation and US tax cuts would help the auto industry, but the president Trump’s antipathy to free trade could increase automakers’ costs. The possible dissolution of the Iranian nuclear deal, along with the impacts of Brexit, could weigh heavily on the sector.
- “Consumer goods and retail” – Brexit and political change across Europe will likely dampen consumer sentiment in 2017. Tax cuts could benefit American consumers, while retail in emerging markets such as India, Russia and Brazil will recover, helping to offset China’s slowdown. Competition between e-commerce and brick-and-mortar retailers will heat up, as Wal-Mart and Amazon, for example, engage in “crossover” experiments.
- “Energy” – Fossil fuels will continue to provide 85% of energy used globally, but the Paris Agreement on Climate Change will guide signatories such as the EU, China and India to reduce carbon emissions. Trump’s negation of climate change could hinder US collaboration, even as two-thirds of global energy investment is currently in renewables. Energy prices will remain low, though they have already hit bottom.
- “Financial services” – Growth in payment services and fintech will continue, along with new opportunities among the unbanked within emerging markets. But ongoing regulatory burdens, slow overall growth and low interest rates, particularly in developed markets, will dampen expectations. The incoming US administration may try to roll back some banking legislation. As financial institutions retrench globally, China must address mounting debt, while bank health remains precarious in Germany and Italy.
- “Health care” – New US government leaders will work to undo the Affordable Care Act (Obamacare) in one way or another, but the rest of the world will extend citizens’ health care availability. Increased life expectancies in rich and poor countries alike will require expanded health care systems. Brexit may encourage foreign medics working in the UK to return home, and oil-exporters’ strained national budgets may be unable to fund health needs. Pressure on pharmaceutical firms to cut prices will continue.
- “Telecoms” – Increased mobile phone usage and the concomitant uptake in broadband may offset some of the falloff in revenue from voice calls and text messaging. The industry must address how to monetize the Internet of Things, which will only grow.