Drupa’s Global Trends report has focused on Global Economy. This part of the report was also compiled by two independent consulting and market research companies who compiled the Global Trends report, Printfuture (UK) and Wissler and Partner.
This reports delivers the importance of assessing the print industry and its current performance in isolation to the wider global economic conditions which impact raw material prices, fixed costs, export opportunities as well as influencing corporate and consumer demand.
The global macroeconomic trends:
Despite improved global financial conditions and reduced short-term risks, the world economy continues to develop at a subdued pace. After a marked downturn in 2011 and 2012, global economic activity is expected to slowly gain momentum in the second half of 2013. Most world regions are likely to see a moderate strengthening, but growth will still remain below potential.
According to the IMF’s world economic outlook, global growth forecast is an average 2.9% in 2013, below the 3.2% recorded in 2012, rising to 3.6% in 2014. Much of the growth acceleration is likely to be driven by advanced economies. Growth in major emerging markets, although still strong, is expected to be weaker than predicted, partly due to a natural cooling in growth and bottlenecks in infrastructure, labour markets, and investment.
Developed economies stabilise:
During 2013, new policy initiatives in major developed economies have reduced systemic risks and helped stabilise consumer, business and investor confidence, but with very limited impacts on growth. In the Euro zone some economies are being held back by austerity programs, weak bank lending and continued uncertainty, and only a very gradual recovery is expected as these factors diminish.
In the USA, growth is expected to rise from 1.5% in 2013 to 2.5% in 2014. While private sector demand is projected to gradually strengthen the automatic spending cuts and uncertainties associated with budget issues will continue to have an effect on consumer confidence.
In Japan, the bold expansionary policy actions are expected to provide some support for economic activity in the short run but growth will lower from 2% in 2013 to 1.25% in 2014.
Economies in transition register growth:
Developing countries and economies in transition continue to register much stronger growth than developed economies. Overall, growth in emerging markets and developing economies is expected to remain strong at 4.5%–5% in 2013–14, supported by solid domestic demand, recovering exports, and supportive fiscal, monetary and financial conditions.
Potential growth in many developing countries is likely lower than before the global financial crisis: China, for example, is expected to have shifted to a lower but more sustainable and balanced growth trajectory.
Labour markets: more pain in store:
The employment situation remains a key challenge in a large number of economies, as the world economy continues to expand well below its potential. Among developed countries, unemployment is most severe in parts of the Euro area, which continue to see economic activity decline and austerity programmes.
In early 2013, the unemployment rate increased to 26.7% in Spain and 27.2% in Greece, with youth unemployment rates exceeding 59%. Average unemployment in the Euro area reached a new all-time high of 12.1% in March 2013, and is forecast to average 12.8% in 2014
The unemployment rate in the USA has fallen, but is still high by historical standards with unemployment forecast to average 7% in 2014. In most developing regions, labour markets have not suffered as extensively from weak demand as in developed economies.
In some emerging economies, unemployment rates have dropped below the levels seen before the financial crisis, particularly in South America and East Asia. By contrast, employment continues to be a key problem in many African countries, despite relatively high growth rates over the past few years.
Global inflation slowing:
Despite the massive monetary easing by major central banks, inflation remains low worldwide; partly reflecting large output gaps and high unemployment. Global inflation is projected to moderate further to 2.6% in 2013, down from 2.9% in 2012. This decline mainly results from somewhat lower inflation in the USA and Europe in the face of subdued demand, continued high unemployment and contained energy and food prices.
In the economies in transition, by contrast, inflation is expected to accelerate from 6% in 2012 to 7.3% in 2013 as utility prices, nominal wages and public spending put upward pressure on prices. Average inflation in the developing economies will increase slightly from 5.4% in 2012 to 5.6% in 2013. In 2014, global inflationary pressures are expected to remain mild even as economic activity, particularly in developed countries, strengthens.
Capital flow risks to emerging economies:
Global financial conditions have stabilised in recent months as new policy initiatives in developed economies reduced the risk of asset valuations falling in the short term for the world economy. Increased global liquidity i. e. easier access to funding and higher risk appetite among investors have led to rising asset prices in developed countries, while also pushing.