Vantage Shipbrokers Pte Ltd

[Janne Desir]

Economicactivity has shown surprising resilience in 2022, after many economists predicted an earlier recession. But the relatively good news is unlikely to last. The S&P Global Ratings team, under Global Chief Economist Paul Gruenwald, is predicting a challenging 2023 around the world.

Taking a global perspective, Gruenwald points to the challenge of getting inflation under control without damaging output. The key factor to watch will be labor markets. While employment growth is slowing, the resilience of labor markets may encourage central bankers to continue pursuing tighter monetary policy.

Emerging markets follow a global trend of surprising strength this year, but slower or non-existent growth in 2023 and potentially beyond. Inflation in emerging markets seems to have peaked, but with high energy and food prices driven by supply chain woes and the war in Ukraine, central bankers in emerging markets are likely to keep rates high to fight inflation.

In the early fall, economist Larry Summers quipped that the U.K. was behaving like an emerging market. Unfortunately, U.K. consumers can only look to growth rates in many emerging markets with envy. The U.K. economy is in worse shape than previously thought, with an expected 1% contraction projected for 2023 before a moderate rebound. The S&P Global Ratings team anticipates that inflation will peak at 12% within the next few months, before retreating to around 7%.

Across the Channel, things look a bit sunnier. Manufacturing production in the EU was at an all-time high in 2022, despite the curtailment of energy-intensive sectors due to the war in Ukraine. Still, the bloc looks unlikely to escape the gloomy economic news of 2023. High rates, weak hiring and persistent inflation will be a drag on growth.

In Asia, the big economic news continues to be the muted recovery in China, driven by COVID-19 lockdowns and impairment from the property sector. Higher global interest rates are a challenge for China as it attempts to maintain a current account surplus despite capital outflows and depreciation.

There were five $10 billion-plus M&A deals worldwide in November, snapping a streak of five-straight months featuring two or fewer such deals. Johnson & Johnson's $18.04 billion acquisition of Abiomed Inc., announced Nov. 1, ranked as the largest announced deal of the month, according to S&P Global Market Intelligence data. Eight days later, a joint venture of KKR & Co. Inc., Global Infrastructure Management LLC announced its $17.54 billion acquisition of German-based tower infrastructure company Vantage Towers AG in the second-largest deal of the month.

The entire U.S. banking industry had more female employees than men in 2021, but less than 5% of publicly traded banks had female CEOs at the end of that year. In 2021, 56.3% of roughly 1.9 million total employees in banking and related activities were women, compared to 43.7% men, according to an S&P Global Market Intelligence analysis that reviewed the U.S. Labor Department's banking industry data and information reported by publicly traded banks.

Despite the push for decarbonization and alternative carbon-neutral fuels in the maritime sector, only a third of dry bulk shipping market participants expect new dry bulk orders to be fueled by these substitutes in the next five years, according to a survey by S&P Global Commodity Insights. The survey, conducted in November to gauge the mood of dry bulk market participants in the wake of the International Maritime Organization's greenhouse gas emissions regulations, had 112 respondents consisting of shipowners, ship-operators, charterers, shipbrokers and analysts.

In early November, a group of former Shell executives and energy investment bankers proposed a novel idea: convince U.S. oil and natural gas producers to shut thousands of low-producing wells across the nation in return for high-quality and verifiable carbon credits. Such offsets are in high demand as companies worldwide scramble to meet their climate goals and new project developers rush in to capitalize on a growing industry.

Global polyvinyl chloride markets face uncertainty going into 2023 with sluggish demand seen lingering across the regions. PVC prices in Asia and the U.S. fell hard through much of 2022 and may enter 2023 having hit a bottom, market participants in both regions said. However, Chinese demand has yet to rebound from periodic shutdowns despite minor steps to ease its zero-tolerance COVID policies. The U.S. may see more interest rate hikes to combat inflation, which have suppressed domestic PVC demand. Both regions stepped up exports amid thin global demand.

3a8082e126