Global Economic Outlook 2013: Roller-coaster or Derailment?

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Global Economic Outlook 2013: Roller-coaster or Derailment?

  1. 1. Global Economic Outlook 2013: Roller- Roller-coaster or Derailment? A Growth Perspective © 2013 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property ofFrost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  2. 2. Today’s Presenters and Agenda Speaker Description Vinnie Aggarwal Introduction Art Robbins Outlook for North America Jan E Kristiansen Outlook for Europe Manoj Menon Outlook for Asia Pacific Neil Wang Outlook for China Aroop Zutshi Outlook for India, Latin America and Rest –of the World and Wrap-up Moderator Questions and Answers 2
  3. 3. Global Economic Outlook: What’s in store for 2013? 3
  4. 4. North AmericaArt Robbins,President, North America 4
  5. 5. America’s back on the global manufacturing map 5
  6. 6. Shale riches deliver cascading effect on themanufacturing and chemical industryGlobal Economic Tracker: Quarterly IIP Growth Rates, United States, 2008 Q1 – 2012 Q4 Shale oil shift to change the world oil market as U.S. crude oil imports drops 10.0 5.0 Increased natural gas production and low energy costs to 0.0 drive manufacturing and create jobs Growth Rate (%) (5.0) Increase in investments in manufacturing sector as cost (10.0) competitiveness tilts in favor of U.S. (15.0) (20.0) Chemical feedstock ethane, derived from shale gas, 2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 provides cost competitiveness for US based chemical companies Energy Manufacturing Food and Beverages Chemicals “Five years ago, we were on the verge of becoming a chemical Mining Pharmaceuticals importer. Now the industry is back, competitively serving the Note: Values for 2012 Q4 is estimated . emerging markets. This is a great story, but it’s just the beginning” Source: GET-IT, Frost & Sullivan - Senior Executive, Integrated oil, gas and petrochemical major 6
  7. 7. EuropeJan KristiansenPartner & Director, Europe 7
  8. 8. Increasing global interest in the acquisition of Europeandistressed assets 8
  9. 9. Eastern Europe slows down as Western Europe’s woes continueGlobal Economic Tracker: GDP Growth Rates, Europe, 2011 – 2013 • The auto sector will see little reprieve in 2013 • Concerns of closure and job cuts over excess capacity Western Europe and low export demand Western Spain Europe2013 Italy United Kingdom • New legislation in Ukraine to promote domestic Eastern manufacturing, possible slow down of imports Europe Germany France • Private healthcare services in Russia will see significant Series14 growth Western Series13 Eastern Europe Europe Hungary2012 Ukraine • Shale gas development gains momentum in UK as Eastern Turkey production from North Sea declines Europe Russia • Russia unveils $25 billion East Siberia-Pacific Ocean Romania (ESPO) oil link Western Poland Europe Czech Republic2011 • European chemical producers to focus on energy Eastern efficiency to regain competitiveness Europe • Asian companies actively investing in Europe (5.0) 0.0 5.0 10.0 "We believe the worst is behind us but will observe with GDP Growth (%) prudence how H1 unfolds before making bold moves." Note: Values for 2012 is estimated . Source: GET-IT, Frost & Sullivan -Senior Strategy Executive, world leader in chemical niche products 9
  10. 10. Asia Pacific (APAC) & China Manoj Menon President Asia-Pacific Neil Wang Partner & Managing Director China 10
  11. 11. As the global economy still remains fragile, governmentsin Asian countries need to step up to spur growth 11
  12. 12. Look East- ASEAN leads the pack, time to look beyond India Global Economic Tracker: GDP Growth Rates, APAC, 2011, 2012 and 2013 • End of eco-car subsidy will squeeze Japanese auto- makers’ margins • Thailand’s automotive production capacity will see higher volumes in 2013 2013 ASEAN • Investment in oil and gas set to increase in Malaysia Countries • Malaysia’s 100% tax and stamp duty exemption for ten Vietnam years for public- private projects will see pending Thailand projects come to fruition in 2013 Malaysia 2012 Indonesia Japan • New orders in the manufacturing industry will marginally India pick up in 2013 Australia • Domestic demand will provide further growth traction 2011 • Slowing China and competition from lower-cost mining hubs to see normalization of mining production in Australia-2.0 0.0 2.0 4.0 6.0 8.0 “Economic growth and increased consumer spending in ASEAN is a good basis for investment opportunities in GDP Growth (%) Southeast Asian companies in 2013. Consumer goods Note: Values for 2012 Q4 is estimated . companies, healthcare industries are most attractive.” Source: GET-IT, Frost & Sullivan - Senior leader, leading investment and equity firm 12
  13. 13. China’s recovery based on domestic demand, investmentand political reforms 13
  14. 14. Leadership shake up, domestic stimulus to boost economy Global Economic Tracker: Quarterly GDP and IIP • Construction sector will see continued growth Growth Rates, China, 2008 Q1 - 2012 Q4 • All eyes on financing local growth 35.0 30.0 • Moderate growth for automakers, manufacturers will also focus on brandsIIP Growth Rate (%) 25.0 • The sector will rebound in H2 2013 with growth 20.0 between 6-8% 15.0 • Domestic demand slated to pick up over the first half of 2013 10.0 • Uptick in metals and mineral demand 5.0 • Fracking activities and the initiation of commercial 0.0 shale gas production in 2013 • The Government will continue auctioning fracking (5.0) territories resulting in an influx of foreign investment GDP Growth Manufacturing Food and Beverages Chemicals "What everybody wants is growth thats strong enough to Pharmaceuticals Plastics give us peace of mind that revenues will increase and there Mining Electricity is no hard landing risk We are not wishing excessive growth, strong enough to trigger inflation. Im bullish on China still.” Note: Values for 2012 Q4 is estimated . -Senior economist and strategist at Corporate and Investment Source: GET-IT, Frost & Sullivan Banking Firm 14
  15. 15. India andLatin America Aroop Zutshi Global President & Managing Partner 15
  16. 16. India – Policy Logjam-Investors wary of mixed signals- FDIreforms, inflation and budget deficit Global Economic Tracker: Quarterly GDP and IIP Growth Rates, India, 2008 Q1 - 2012 Q4 20.00 15.00 Growth Rate (%) 10.00 5.00 0.00 (5.00) (10.00) 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 Chemicals Mining Manufacturing Electricity GDP Note: Values for 2012 Q4 is estimated . Source: GET-IT, Frost & Sullivan 16
  17. 17. Latin America – Deeper integration, falling unemploymentand investment in infrastructure to propel industrial growth Global Economic Tracker: IIP Growth Rates, Brazil, Chile, Mexico, Colombia, 2008 Q1 - 2012 Q4 20.0 15.0 10.0 IIP Growth (%) 5.0 0.0 (5.0) (10.0) (15.0) (20.0) Brazil Chile Mexico Colombia 2008Q1 2008Q4 2009Q3 2010Q2 2011Q1 2011Q4 2012 Q3 Note: Values for 2012 Q4 is estimated . Source: GET-IT, Frost & Sullivan 17
  18. 18. Concluding Thoughts 18
  19. 19. Can We Gain from Economic Disorder? “The inability to predict outliers implies the inability to predict the course of history” - The Black Swan (The Impact of the Highly Improbable) Black Swan events and complex system failure Corporations, governments and other entities that are too big, too slow to adapt ,fall and fall hard “Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.” - The Anti-Fragile (Things that Gain from Disorder) Anti-Fragile: Thriving in Volatility 19
  20. 20. Focusing Beyond the Headlines… • Do you have an Emerging Markets strategy? • Do you have visibility into changing economic and industry indicators? • Are you investing in improving your teams’ capability and monitoring your innovation pipeline? • Has your team looked at Mega Trends and developed a Macro-to-Micro perspective? 20
  21. 21. Follow Frost & Sullivan on Facebook, LinkedIn,SlideShare, and Twitter http://www.facebook.com/FrostandSullivan http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan http://twitter.com/frost_sullivan 21
  22. 22. Your Vote Which of following is the most important current challenge faced by your organization?• Uncertainty and global economic slowdown?• Strategic scenario planning in the face of volatility?• Defining and designing an emerging market strategy?• Competition and innovation pipeline?• Others? Frost & Sullivan’s Growth Consulting can assist with your growth strategies 22
  23. 23. Questions & Answers 23
  24. 24. For Additional Information Angie Montoya Global Webinar Marketing Coordinator amontoya@frost.com 24
  25. 25. The Frost & Sullivan Story Emerging Research Growth Partnership Visionary Innovation 1961– 1961–1990 1990– 1990–Today Today– Today–Future 1961 1990 TodayPioneered Emerging Market Partnership Relationship& Technology Research with Clients Visionary Innovation• Global Footprint Begins • Growth Partnership Services • Mega Trends Research• Country Economic Research • GIL Global Events • CEO 360 Visionary Perspective• Market & Technical Research • GIL University • GIL Think Tanks• Best Practice Career Training • Growth Team Membership • GIL Global Community• MindXChange Events • Growth Consulting • Communities of Practice 25

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