While inflation is decreasing, interest rates continue to affect households and businesses. That being said, there are ‘bright spots’ in sector performance, a light at the end of the tunnel of tight consumer spending. Across Europe, the Americas and the Asia-Pacific, opportunities unfold within several sectors.
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Information and Communications Technology Lead the Way for Global Innovation
The global information and communications technology industry (ICT) has quickly become leader in economic growth. Countries and companies alike now prioritize connectivity and innovation, and the sector is primed for sustained growth and technological breakthroughs that are not slowing down anytime soon. Sales of semiconductors are expected to reach double-digit growth next year, and artificial intelligence (AI) now touches all aspects of and is responsible for much of the industry’s rapid expansion.
In the U.S., robust domestic demand is keeping inflation stickier than consumer and Federal Reserve officials would like. Regardless, U.S. production of high-tech goods is expected to see a notable uptick, an increase of 6.5% in 2024 and 3.8% in 2025. Meanwhile, despite Latin America´s overall subdued economic outlook, the ICT sector remains a bright spot, with Mexico’s ICT sector especially thriving and predicted to increase by 5.6% next year alone.
Europe continues to recover from high interest rates and slowed consumer spending, but a positive rebound in investments and production of ICT products are in the cards for 2025. Unfortunately, Europe’s energy-intensive sectors suffered the most from inflation, and the ongoing weakened German economy still has a stronghold on economic growth across the region. European outputs will increase by approximately 3% in 2025, propelled by digital technology and artificial intelligence developments, with Italy, Ireland, the Netherlands, Poland and Spain showing promising market growth.
The Asia-Pacific region takes the lead overall with outputs of ICT goods predicted to increase to nearly 8% in 2025, once again significantly boosted by semiconductor demand. South Korea, Taiwan and Indonesia all have supportive government policies and investments in place that are responsible for increased production of high-tech goods this year and well into 2025.
Two Regions Reap Big Benefit from Chemicals Industry
Two regions fair best in the outlook for the chemicals industry – Asia-Pacific and the Americas. The global chemicals industry continues to experience increased demand for more sustainable materials used in solar panels, insulation and related products. The plastics sector is also an area where growth is expected due to substantial investments in advanced recycling plants.
Shifting to the outlook for each region, in Asia-Pacific, chemicals production is predicted to increase 3.3% in 2024 and 3.5% in 2025. The Asia-Pacific region is once again outperforming other regions, with its rising middle class driving demand for soaps, detergents and specialty chemicals. China is predicted to outperform neighboring countries, with production increasing 4.7% this year, followed by India at 4.1% and Indonesia at 4.0%. The outlook for these markets remains bright through 2025.
Chemicals industry production in the Americas is forecast to rebound 2.8% in 2025 after a 1.7% contraction last year. In the US, support for domestically produced semiconductors, lithium batteries, solar panels and other clean technologies will spur demand for required chemicals used in fields like manufacturing, agriculture, pharmaceuticals and more. The US also has substantial reserves of shale gas – natural gas that provides the industry with a lucrative cost advantage on this raw material used in many different chemical applications. Canada is also headed for a rebound in 2025, driven by a positive increase in manufacturing.
Transportation and Logistics Drive Optimistic Outlook for the Americas and Asia-Pacific
While Europe is expected to lag in transportation and logistics, this industry on track to be quite the opposite – a bright spot for the U.S., Canada and Mexico and the Asia Pacific regions.
In Canada and Mexico, transportation and logistics services are expected to grow by 3.5%, benefiting from economic opportunities in the U.S., which is predicted to grow by about 3% this year, respectively.
U.S. government support and investments in infrastructure will improve supply chain efficiency, reduce costs and stimulate demand for transportation and logistics services. The expansion of goods and services for transportation is supported by ongoing robust consumer sentiment and spending.
The positive outlook for the transportation and logistics industry holds strong in the Asia-Pacific region, increasing approximately 5.9% this year compared to the global average of 3.8%. Apart from Australia and Singapore, who’s growth in production hovers below 3%, all regional markets show robust increases industry-wide. Japan´s transport sector is miles ahead, with growth of 6% this year thanks to higher demand for transportation and logistics services and innovation in automation. India’s ongoing efforts to improve its network of transportation and infrastructure has worked in the country’s favor, which could result in a 12% industry expansion of markets this year alone.
Multiple Regions Benefit from Groundbreaking Pharmaceutical Innovation and Weight Loss Drugs Trends Stay Strong
The global pharmaceuticals industry already has a strong track record for revolutionary technology and a push towards improved sustainability and innovations such as artificial intelligence has the potential to improve operational efficiencies and unlock further opportunities for the industry. In fact, recent research by PwC predicted that AI has the potential to cut operating costs by more than 30%. It is no secret that regardless of region, AI and big data analytics are improving efficiency in drug development, clinical trials and patient care.
The world’s largest producer of pharmaceuticals, China is driving the lucrative expansion of global pharmaceutical production, currently the world’s biggest producer of pharmaceuticals. Despite the growing sentiment to reshore production to the US, China’s cost advantages will continue to drive demand.
In the Americas, weight loss drugs, as well as generics and biosimilars are predicted to lead the region’s positive industry developments. Branded products such as mRNA vaccines are expected to grow rapidly, but developments need a few years to fully take shape. In emerging markets, countries like Brazil and Mexico are leading the way as prominent producers, yet problems persist in less developed countries.
The nature of Europe´s well-established manufacturing facilities, supply chains and production standards promise solid growth over the next few years. European pharmaceutical production is shifting in a positive direction, increasing 1% this year and 3.5% in 2025 after 1.5% contraction in 2023. Like the Americas, Europe is having a moment with weight-loss drug demand and there will be major production facility investments to follow.
As the target of 2% inflation rates come into sight, the inflation picture is also turning muddier. But despite these ongoing concerns, it is valuable to recognize what is performing well and the short-term outlook for these sectors is a welcome sign despite persistent inflation and is an indication that our global economy is resilient in many diverse ways.
Author Bio
Atradius Vice President and Senior Manager Christian Mueller oversees the Atradius Special Risk Management Unit for Risk Services – Americas. In this leadership role, he manages a team of senior underwriters, responsible for managing Atradius’ high risk buyer portfolios.
Mueller joined Atradius as a buyer underwriter in 2001 and subsequently served as senior underwriter where he spent time analyzing and building his knowledge in various industry sectors. In 2015, he became senior manager of the Atradius Special Risk Management Unit and one year later he was nominated as vice president. Prior to Atradius, Mueller spent 8 years working for Barmer Health Insurance, a German company – underwriting and managing health claims.
Christian received his B.A. from the University of Applied Sciences in Kiel, Germany, and his MBA – International Business and Financial Management from Benedictine University in Lisle, Illinois.
