S&P published the latest edition of its Look Forward research. The series focuses on the themes driving global supply chain development through 2030.
While geopolitical tensions, shipping disruptions, climate change, and new tech advances affect the global supply chain, companies are reevaluating outsourcing as they adapt to shifting trade patterns.
Highlights from the report include:
- S&P Global expects global trade to grow at a compound rate of 3.3% through 2028, outpacing GDP growth (2.6%). Southeast Asia and emerging markets will lead global supply chain expansion.
- Supply chain policies will continue to shift towards national security priorities – rising protectionism, resource-guarding, sanctions, and investment subsidies could increase inflationary pressures.
- Higher financing costs reduce firms’ ability and willingness to invest in supply chain resilience; businesses prefer strategies that cut risks and boost profitability, like reshoring and technology enhancements.
- Foreign direct investments point to Southeast Asia and Mexico as reshoring destinations.
- Workforce growth disparity between developed and developing economies will disadvantage industrialized market supply chains; cross-border labor mobility is expected to be held back by politics.
- Despite transporting 45% of global trade by value, the container shipping industry is ill-equipped to finance its decarbonization, with cost burdens remaining a powerful obstacle.
For more insights from Look Forward: Supply Chain (Volume 5 | February 2024), please visit: https://www.spglobal.com/look-forward/supply-chain
