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Home Articles Business Development Marketing Digital Marketing Product Strategy Supply Chain News Governance & Leadership General Technology & Innovation Trade & Supply Chain About Us Contact Legal X Product Strategy Global Economic Forecasts for Q4: What Businesses Should Expect October 29, 2024 As we approach the fourth quarter of 2024, businesses worldwide deal with an increasingly complex economic picture shaped by global inflation, shifting consumer demand, and continued geopolitical challenges. This brings us to the need to understand these dynamics for businesses to remain competitive. Key regional economy When we take the regional economy, the United States economy is expected to be 2.8% by the end of 2024. This is because, despite inflation and high interest rates, consumer spending accounts for 70% of GDP in the U.S.  When consumers spend more on goods and services, businesses see increased revenue. In addition, this last quarter sees increased spending due to holidays which further boosts retail sales. Retailers will use the revenue from their sales to pay their employees, who will also spend their income, thereby creating a multiplier effect for the economy.  Another key driver of the US economy is the investments businesses are making in the technology and infrastructure industry. For example, the US government’s initiative in the CHIPS & Science Act and the Inflation Reduction Act have allowed companies to invest heavily in semiconductors.   Meanwhile, the European Union is expected to have a modest growth of 0.8% by the end of 2024, with improvements in their export performance, domestic demand and consumer spending on goods and services especially in the tourism sector. This is because a high export performance means a higher demand for EU goods and services from the United States, China, the UK, Switzerland Japan, South Korea, and Norway.   Which boosts EU business revenue greatly and increases production and employment, therefore improving the economy greatly.This also means EU exports will exceed imports, creating a trade balance between imports and exports in the region ultimately growing the economy.As we approach the fourth quarter of 2024, businesses worldwide deal with an increasingly complex economic picture shaped by global inflation, shifting consumer demand, and continued geopolitical challenges. Also, although the manufacturing sectors have not had any improvement, the tourism sector should shoulder this weakness, especially with the upcoming holiday season.  With China, it is expected for the economy to stay at 4.5% which is a slight slowdown compared to Q3 2024 which was 4.6% growth. The slowdown will be a result of the challenges in the real estate sector. Because real estate accounts for approximately 20 to 25% of the country’s GDP, any issues about the sector affect the overall economic performance of the country. Another issue is the real estate sector challenges have a spillover effect on related industries such as construction, materials, and financial services, which creates a more amplified economic challenge.  However domestic demand and improvements in export performance should support growth.  Evolving trends in consumer behaviour Inflation has influenced consumer spending, with higher prices leading to cautious spending habits, especially in regions with persistent inflation. For example, in the US and Europe, although inflation is decreasing, consumers are still cautious with their spending habits and focus only on necessities like food, water, housing healthcare or discounts.  However, online shopping continues to grow, with consumers preferring the convenience and better prices available online to physical shops. Another notable trend is consumers are prioritizing services over goods, for example in Europe there is a surge in spending more on services such as dining out, travel, and entertainment instead of on goods. And an increased focus on eco-friendly and ethically produced goods.    Sector-Specific Insights  There is a surge in demand and investment in generative AI across various sectors and this trend is expected to continue beyond the end of the year. For example, Companies such as OpenAI and Google are rolling out advanced generative AI tools that automate content creation, coding, and data analysis. Businesses use these tools to improve efficiency, automate processes, reduce errors, save costs increase creativity and enhance customer experience. These have driven the demand for AI-driven solutions to problems.   Additionally, the transition to remote and hybrid work styles has increased demand for collaboration tools, cloud services, and cybersecurity solutions. Companies are investing in tools that facilitate remote work while also increasing efficiency and security. For example, companies are increasingly using tools like Zoom, Microsoft Teams, and Slack to support their hybrid or remote work models.For security, CrowdStrike and Palo Alto Networks are experiencing rising demand for cybersecurity solutions designed for remote work situations. Apart from these trends, companies are investing in Supply Chain Management technology and tools to streamline their business processes.    supply chain trends     Because of the adoption of AI technologies across industries such as supply chains, there is a surge in the demand for AI chips, which is expected to remain high for Q4 2024.   Also, Challenges like trade restrictions, tariffs, geopolitical tensions and strikes will continue to disrupt production and sourcing, leading to disruptions in the supply chain. Companies are focusing on sustainability practices to reduce their carbon footprint, manage waste, and ensure sustainable sourcing with their materials. There’s also a surge in the demand for cybersecurity in the supply chain because of the surge in the digitisation of supply chain processes.   Retail industries Retailers have already started preparing for the holiday season as of October. They have started ramping up inventory, launching targeted marketing campaigns, and offering promotions to attract shoppers and spread-out demand. Increased costs for raw materials, transportation, and labour force might force retailers to adjust pricing strategies. Where some may pass on these costs to consumers, others might absorb the costs and balance this with promotions to maintain consumer interest to serve as a competitive advantage and manage profit margin. Retailers will also adapt their strategies and start offering eco-friendly products, enhancing ecommerce platforms, and tailoring their services to meet the evolving consumer demand and expectations. Retailers are also leveraging the use of data to offer personalized promotions to further enhance consumer experience Global Issues Even with all these improvements in global economic performance, there are still issues on the