“Investors retreat as deflation fears rise”

Economic growth

SHARE THIS STORY

Deflation Dec13The blog’s important eBook, ‘Boom, Gloom and the New Normal: How Ageing Western BabyBoomers are Changing Demand Patterns, Again’, was published 3 years ago this month.  Co-authored with John Richardson, it identified the major changes taking place in global and national demand patterns:

Growth accelerated from the 1980s, as the population became concentrated in the wealth creating 25 – 54 age group, and the number of dependent children reduced.

Growth then moved into SuperCycle mode as low fertility rates freed large numbers of women to re-enter the workforce after childbirth.

The past 30 years were thus an entirely exceptional period of growth in the global economy.

But the next 30 years will be quite different:

  • For the first time in history, the world has an entire generation of people aged over 55
  • And low fertility rates have created a shortage of those in their peak demand years

Growth will inevitably slow, as the relative size of the wealth creator generation will continue to reduce, due to more and more men and women joining the New Old 55+ group

This slowdown will be accentuated, as the New Old represent a replacement economy.  They already own most of what they need, and their incomes are reducing as they enter retirement

For the past 3 years, the blog has had the privilege of working with the Boards of many major companies, describing the challenges and opportunities created by these immense changes in demand patterns.  It has also spoken at a wide range of conferences around the world, as clearly these changes are having widespread impact.

But now, the time for talking and discussing is over.  Companies must instead start to turn words in action, or risk suffering a major downturn in their business over the next 5 – 10 years.

Last week, China’s President Xi Jinping highlighted that China is now moving into the New Normal:

We must boost our confidence, adapt to the New Normal condition based on the characteristics of China’s economic growth in the current phase” 

At the same time, the world’s leading financial media were reporting how developments in the global economy are following the forecasts set out in Boom, Gloom, and the New Normal:

  • The front page headline in Friday’s Financial Times was “Investors retreat as deflation fears rise
  • Reuters’ headline on the same day was “The world needs to get ready for a New Normal with Chinese characteristics
  • Whilst the Wall Street Journal wrote under the headlineGlobal Growth Worries Climb

“Five years after the financial crisis ended, soft growth in Europe, a stop-and-start U.S. recovery and waning momentum in China have policy makers groping for what to do next.”

We are now at the parting of the ways.  Global growth cannot, and will not, go back to the world of the Boomer-led SuperCycle.  The next 30 years will see a whole range of major new opportunities develop, for those companies who are willing and able to grasp them.

Our 5-step APPLY Workshops are individually tailored to meet the needs of your business.  Please click here if you would like further details of their Value Proposition.  And please click here to download your copy of ‘Boom, Gloom and the New Normal.

 

The blog’s weekly round-up of Benchmark price movements since January 2014 is below, with ICIS pricing comments:
PTA China, down 14%. “Slower demand seen in the polyester markets towards the week’s close has kept the majority of end-users adopting a rather pessimistic market outlook”
US$: yen, down 3%
Benzene, Europe, down 2%. “Spot price levels dropped this week to their lowest since the start of the year”
Brent crude oil, down 1%
Naphtha Europe, up 2%. “A potential rise in imports from Russia, coupled with the end of the US refinery maintenance season, could ease supply pressures”
S&P 500 stock market index, up 3%
HDPE US export, up 7%. “Latin American buyers were purchasing significant volumes of lower-priced material from Korea”

PREVIOUS POST

Indian auto sales decline as the middle class myth disappears

16/05/2014

The blog’s important eBook, ‘Boom, Gloom and the New Normal: How A...

Learn more
NEXT POST

London house price bubble hits the record books

20/05/2014

The blog’s important eBook, ‘Boom, Gloom and the New Normal: How A...

Learn more
More posts
Most businesses were nowhere near Ready for Brexit last Friday – we mustn’t make the same mistake again
14/04/2019

Thank goodness for backbench MPs and the European Union. Without their efforts, the UK would by now ...

Read
Don’t get carried away by Beijing’s stimulus
07/04/2019

Residential construction work in Qingdao, China. Government stimulus is unlikely to deliver the econ...

Read
Businesses thrilled by Brexit uncertainty: “It’s exhilarating” says small business owner
01/04/2019

With the European Commission saying that a No Deal is now “likely“, small businesses acr...

Read
Ageing Perennials set to negate central bank stimulus as recession approaches
10/03/2019

The world’s best leading indicator for the global economy is still firmly signalling recession...

Read
BASF prepares its UK supply chain for Brexit
24/02/2019

BASF has been working with Ready for Brexit (the online platform I co-founded last year) as part of ...

Read
Companies and investors have just 30 working days left to prepare for a No Deal Brexit
17/02/2019

Companies across the UK and EU27 are suddenly realising there are now just 30 working days until the...

Read
The BoE’s pre-emptive strike is not without risk
12/02/2019

The Financial Times has kindly printed my letter below, arguing that it seems the default answer to ...

Read
Flexible working is key to reversing today’s collapse in fertility rates
27/01/2019

Women in most parts of the world are not having enough children to replace our population. This is o...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more