Predictions 2023

The challenges of being prepared for 2023

5 Jan 2023

The global pandemic and Russia’s invasion of Ukraine exposed the difficulty of making predictions. Forecasting the coming year is even more fraught than usual. In this Viewsroom podcast, Breakingviews columnists discuss some scenarios that may play out in the next 12 months.

Green surge is circuit breaker on nuclear revival

4 Jan 2023

High energy prices and decarbonization desires have reignited plans to build atomic power plants. Yet wind and solar are growing far faster, even in China, because they’re quicker and cheaper to build. And expanding power storage is eroding nuclear’s big advantage: reliability.

Starbucks will go grande on workforce-lite future

4 Jan 2023

The $120 bln latte purveyor is fighting off unions as workers seek better benefits and higher wages. In 2023, it will throw a few concessions. That will tide over employees long enough for it to streamline coffee-making. It’s a playbook for those looking to trim their workforce.

Automakers won’t go back to normal

4 Jan 2023

Covid-era shortages weren’t all bad for the industry. Prices soared amid tight supply, adding $7 bln to profits at GM alone. Car companies are trying to manage inventory so that supply and demand – now falling – will match up. They only have so much in their control.

Banks will pump H2O to top of climate agenda

4 Jan 2023

Recent floods and aridity show global warming is undermining water security. Yet the resource gets a trickle of the dollars and attention Barclays, Citi and rivals devote to sustainability. The first COP-like water confab in decades is an apt time to divert more of that flow.

 

Sky spinoff is Comcast’s least-bad option

3 Jan 2023

The U.S. cable giant spent $40 bln on Rupert Murdoch’s European pay-TV provider in 2018. Now consumers are under duress and it’s probably worth less than half that sum. Though boss Brian Roberts is a reluctant seller, listing Sky will shortcut challenges on the horizon.

Disney’s next 100 years hinges on a metaverse

3 Jan 2023

A century ago, the media giant crafted theme parks that withstood decades of changing technology. It isn’t a huge leap from a real Disneyland to a virtual one that melds brands and streaming. Innovation is necessary, but for it, boss Bob Iger’s days need to be numbered.

Being ready for anything is top priority for 2023

3 Jan 2023

After the global pandemic and the outbreak of war in Europe, the world faces a vast array of possibilities this year. Little wonder that executives, policymakers and financiers are planning for many scenarios. Though the choices remain difficult, there’s value in thinking ahead.

Singapore withstands a global property downturn

3 Jan 2023

The Lion City’s housing prices are up 14% in a year, compared to declines in Hong Kong and other major cities. A pandemic-induced construction shortfall and increasing foreign demand are factors. Rising interest rates will cool, but not halt, Singapore’s real estate boom.

Foxconn reinvents itself, and EV supply chains

3 Jan 2023

The Taiwanese giant plans to make electric vehicles, and the chips and batteries that go into them, for global automakers. That’s a twist on its business of churning out iPhones for Apple in China. As far as strategic pivots go, this one is ambitious and much needed.

Soccer giants’ new owners may get tiny returns

30 Dec 2022

Manchester United, Liverpool and Paris Saint-Germain are up for sale, either in part or in full. A near $3.7 bln price tag each seems possible, banking the sellers a tidy return. Yet slowing TV rights deals and spiralling player wages mean the buyers will probably fare worse.

New threats will corrode infrastructure M&A

30 Dec 2022

Blasts that damaged Baltic pipelines in September alerted investors to the physical risks to energy networks from geopolitics. Add growing cyber concerns and the cost of insurance is set to rise. As the appeal of formerly quasi risk-free bets dims, states will surely step in.

Dealmakers will be lucky to eke out a 2022 repeat

29 Dec 2022

With merger volume slumping from a record $5.8 trln, bankers are regrouping to suit the times. The emphasis will be on buyout firms loaded with firepower and stock-based mergers. After the 2007 peak, though, it took two years for M&A to bounce back. Expect history to rhyme.

Boardrooms will rediscover the value of gray hair

29 Dec 2022

The economy is headed for conditions not seen in over a decade, yet a third of the U.S. workforce was under 20 during the last real recession. CEOs are getting older, while tech and crypto blowups knocked youth off its perch. In 2023, companies will embrace an aging workforce.

Conscious consumerism will be left on the shelf

29 Dec 2022

Shoppers have been forking out for organic and plant-based food for health, environmental or other reasons. Squeezed incomes will test their ethical commitment. Throw in higher input costs, and 2023 looks an unappetising year for fake burger purveyor Beyond Meat and its rivals.

“Lifetime value” is Silicon Valley’s next buzzword

28 Dec 2022

As the cost of recruiting customers rises, tech firms and investors are paying more attention to the revenue users bring in. It’s a welcome shift from breakneck growth. Yet as with previous favourites like “total addressable market” or “flywheel effect”, the idea may get garbled.

Stray pet businesses will find new owners in 2023

28 Dec 2022

Americans are expected to spend more than $275 bln on their furry friends by 2030, outpacing GDP growth. Even so, exuberant pandemic-fueled valuations have come crashing down. Nestlé, Mars or Colgate-Palmolive are strong candidates to target the industry’s stand-alone operators.

Carmakers will reverse out of public markets

28 Dec 2022

Shares of companies like Stellantis and BMW are depressed on fears of a recession, and the threat of Chinese rivals. Yet the groups are profitable and throwing off cash. One way to make the most of low prices is to buy back shares. The logical next step is to go private.

E-commerce will go viral on social media in 2023

27 Dec 2022

TikTok and YouTube are among those fighting for a piece of the estimated $46 bln shopping market that’s growing twice as fast as ads. It’s a sensible strategic move, but recession would dash some plans. Many products also won’t suit the apps and competition is expanding quickly.

Global finance unknowns are more “who” than “what”

27 Dec 2022

The blowup of the UK pension market has got regulators hunting for weaknesses in the over-$200 trln shadow banking sector. Emerging market funds and leveraged loans both bring vulnerabilities. But in deciding what to police, the question is who’s exposed. That’s a blind spot.