Industry Key Themes 2024 – Industry to Outperform the Broader Economy

2023 has been a turbulent year for global industry, with growth on track to come in lower than any other year since 2000 other than the crisis-hit 2009 and 2020.

This research report expands on these key themes:

1. After two years where industrial growth unusually underperformed global GDP, 2024 should see a resumption of the norm where industry outperforms the broader economy.
2. The shift away from the rock-bottom interest rates of the last two decades is weighing on interest-sensitive sectors, many of which are industrial.
3. The energy transition will have a significant impact on industry in 2024 and beyond. While the power sector has taken positive steps to de-carbonisation, progress in manufacturing and mining has been lacking.
4. Geopolitics has emerged as a key factor in government and corporate decision-making. We expect more shifts in 2024 towards diversification away from China. We also expect the Inflation Reduction Act will lead to an increasing concentration of subsidised sectors in the US despite efforts by Europe and other regions to counter it with their own schemes.
5. Sectoral labour dislocations caused by the pandemic have persisted. However, high-frequency data suggest pressures are easing, and we expect further loosening in 2024. Nonetheless, there are a host of longer-run structural factors (such as population ageing and the energy transition) that could create shortages in certain sectors.
6. Despite some weakness in 2024, tech spending will continue to be key to firm competitiveness over the remainder of the decade.