Economic, Inflation and Material Handling Outlook for 2023

A year of shifting forces

The year ahead is one of significant risk but also opportunity. While backlogs of unfilled orders have been a hindrance to revenue since mid-2020, those same backlogs could help keep manufacturing and material handling activity somewhat buffered from the persistent rise in interest rates and the potential for further slowing global growth. Even a slowdown in the labor market could present opportunities to reduce backlogs and bolster shipments in the face of slowing growth. After all, the labor market has been exceptionally strong, but with the labor market slowing, companies may finally be able to fill empty positions necessary for operations.

Global growth likely to slow

The year ahead also presents rising risks to the global economy. The most recent IMF forecasts of economic growth in the October 2022 World Economic Outlook underscored the potential for slowing GDP growth across economies in 2023 compared to 2022—and especially compared to the growth rates of 2021. After the growthflation of 2021 and the slowflation/stagflation of 2022, what does 2023 hold for the economy, financial markets and material handling?

When assessing global economic activity in the year ahead, the United States and North America appear likely to remain relative bright spots among advanced economies, even as U.S. GDP likely slows further or falls. U.S. growth is likely to remain relatively high, and U.S. growth rates are likely to remain relatively strong compared to other advanced economies. What we call Cold War Two® is playing out on two fronts in Europe and Asia, with effects that are negative for growth yet also supportive of inflation. . .

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