The 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 headline “Global 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”