2023 Trends and Forecasts – and Their Effects on the Private Market
2022 was unique in every way, making it even more essential to stay up-to-date on the latest industry trends so you can be prepared as we begin this new year. Although last year had its challenges, experts have taken note of some trends and data that could predict the rise of a few key industries. So as you’re planning the direction you’d like to take your financials in the coming months, consider the way 2022 shaped up – and how 2023 is likely to follow.
An unprecedented 2022
Although no year is free of challenges, 2022 saw a struggling economy and significant declines in nearly every major industry. While outside factors were often the cause,
Ongoing global crises
Still recovering from – and trying desperately to get to the other side of – a global pandemic, the American and global economies continue to undergo structural changes. The ongoing disruption of global logistics as well as labor shortages have caused significant delays in the supply chain, leading to increased demand for goods that the market can’t keep up with. Additionally, the current energy crisis has only been amplified by the Russian invasion of Ukraine.
Increased government spending
Recently we’ve seen increased government spending as a strategy to boost the economy, and the increased funding for construction and manufacturing has encouraged a rise in innovations for those industries. That trend is further supported and accelerated by the import substitution that was put in place due to the pandemic.
Key industry data
Economists regularly monitor the growth of major industries that contribute to GDP; however, 2022 saw quite a bit more decline than typical years. In fact, according to Vanguard ETFs, the only sector that gained value has been energy.
Here’s a breakdown of how each industry’s market cap changed in 2022:
- Consumer: -39%
- Technology: -32%
- Real Estate: -28%
- Manufacturing: -9%
- Healthcare: -7%
- Infrastructure: -7%
- Energy: +45%
2023 industry forecasts to look out for
As we begin the new year, the trends and data of 2022 will continue to influence how 2023 shapes up. Whether you’re running a business or focusing on your own financial goals, these predictions for the upcoming year can help you plan going forward.
Possible economic boosts
The recent increase in government spending – likely due to historic inflation rates – isn’t predicted to end anytime soon, possibly increasing the demand for goods and services and paving a path toward Keynesian demand side economics. Experts also predict that the Consumer sector will be catching up, winning back its cap. Domestic Manufacturing as well as Healthcare are also expected to continue to see steady growth long-term.
Changes in the private market
Private market projects continue to have longer exits than in previous years. With most of the Technology sector still being in troubled waters, we’re seeing a lack of logical acquisition strategies. That being said, private capital will need to support private businesses longer than when those industries were on the rise.
New strategies for private businesses
The drastic changes in the market mean that private businesses are adjusting their strategies as well. They’ll become leaner and more agile, relying more on revenue rather than external funding as their primary source of capital. This means that private market investments will become healthier and more robust.
Are you prepared for 2023?
While investors can’t predict exactly how the year will play out with total certainty, the numbers don’t lie. Especially if you want to be prepared for a looming recession, considering how your portfolio could be affected by current data and predicted trends can help you avoid financial disaster.
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