The global economic cycle has peaked and businesses face a more downbeat outlook in 2019. With risks increasing, how can businesses continue to achieve growth and thrive in the year ahead?
Among the 5,000 mid-market business leaders Grant Thornton interviewed as part of the IBR’s global economic outlook, global optimism sits at net 39%, a fall of 15 percentage points (pp) from net 54% in Q2 2018. This is the weakest optimism score seen since Q4 2016.
But while the headlines appear daunting, there are good reasons for business leaders to hold their nerve. Growth can be achieved through a calm assessment of the economic fundamentals, combined with a strategic analysis of the best prospects for growth.
Despite increasing downside risk, economic fundamentals remain strong and opportunities exist. The global economy may be slowing, but it is still growing – at 3.5% in 2019, according to the latest IMF estimates. Business leaders can drive growth by refocusing their priorities and investing in the markets and technologies that will continue to drive returns.
Businesses should think creatively about international markets in 2019. Just as supply chains continue to expand into new markets around the world, so do export opportunities. Only 11% of the business leaders interviewed expect a decrease in exports in the coming year. Our data indicates that emerging markets in Asia Pacific and Latin America show particular promise, with robust business optimism as well as revenue and profit expectations.
New technologies can enable access to these new markets faster and with less risk when implemented correctly. Leaders should pursue appropriate technology strategies and new business models to stay agile and make the most of opportunities for growth. For ambitious, technologically committed businesses the ability to take advantage of new opportunities quickly is in their power.
Uncertainties are rife in 2019, but that does not make growth impossible for dynamic organisations. Despite a slowdown in the global economy, economic fundamentals are strong. The message to businesses is to understand where they need to refocus their priorities to realise growth.