Ten business trends for 2024, and forecasts for 15 industries - The Economist   

1 Central banks including America’s Federal Reserve start to reduce interest rates as price rises slow. With global inflation still at 5%, however, consumers remain thrifty.

2 Amid efforts to slow climate change, renewable-energy consumption climbs by 11% to a new high. But fossil fuels still meet over four-fifths of energy demand.

3 IT spending picks up, rising by about 9%. Artificial intelligence generates remarkable hype but produces precious little revenue and plenty of scrutiny.

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Economists had a dreadful 2023 - The Economist   

Spare a thought for economists. Last Christmas they were an unusually pessimistic lot: the growth they expected in America over the next calendar year was the fourth-lowest in 55 years of fourth-quarter surveys. Many expected recession; The Economist added to the prognostications of doom and gloom. This year economists must swap figgy pudding for humble pie, because America has probably grown by an above-trend 3%—about the same as in boomy 2005. Adding to the impression of befuddlement, most analysts were caught out on December 13th by a doveish turn by the Federal Reserve, which sent them scrambling to rewrite their outlooks for the new year.

It is not just forecasters who have had a bad year. Economists who deal in sober empirical work have also had their conclusions challenged. Consider research on inequality. Perhaps the most famous economic studies of the past 20 years have been those by Thomas Piketty and his co-authors, who have found a rising gap between rich and poor. But in November a paper finding that after taxes and transfers American incomes are barely less equal than in the 1960s was accepted for publication by one of the discipline’s top journals. Now Mr Piketty’s faction is on the defensive, accusing its critics of “inequality denial”.

Economists have long agreed that America would be richer if it allowed more homes to be built around popular cities. There is lots of evidence to that effect. But the best-known estimate of the costs of restricting construction has been called into question. Chang-Tai Hsieh of the University of Chicago and Enrico Moretti of the University of California, Berkeley, found that easing building rules in New York, San Francisco and San Jose would have boosted American GDP in 2009 by 3.7%. Now Brian Greaney of the University of Washington claims that after correcting for mistakes the true estimated effect is just 0.02%. If builders disagreed as wildly about roof measurements, the house would collapse.

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Welcome to the age of the hermit consumer - The Economist   

In some ways the covid-19 pandemic was a blip. After soaring in 2020, unemployment across the rich world quickly dropped to pre-pandemic lows. Rich countries reattained their pre-covid gdp levels in short order. And yet, more than two years after lockdowns were lifted, at least one change appears to be enduring: consumer habits across the rich world have shifted decisively, and perhaps permanently. Welcome to the age of the hermit.

In the years before covid, the share of consumer spending devoted to services rose steadily upwards. As societies got richer, they demanded more in the way of luxury experiences, health care and financial planning. Then, in 2020, spending on services, from hotel stays to hair cuts, collapsed owing to lockdowns. With people spending more time at home, demand for goods jumped, with a rush for computer equipment and exercise bikes.

Three years on the share of spending devoted to services remains below its pre-covid level (see chart 1). Relative to its pre-covid trend, the decline is even sharper. Rich-world consumers are spending on the order of $600bn a year less on services than you might have expected in 2019. In particular, people are less interested in spending on leisure activities that generally take place outside the home, including hospitality and recreation. The money saved is being redirected to goods, ranging from durables such as chairs and fridges, to things like clothes, food and wine.

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EVs are poised to make China the world’s biggest car exporter - The Economist   

Combustion engines in motor vehicles account for about 15% of carbon-dioxide emissions each year. Eliminating them requires the electrification of transport, which in turn requires batteries in unprecedented quantities. In 2024 the outlines of a new global battery-production infrastructure will come into focus in China, Europe and America—a network of factories capable of churning out batteries in sufficient amounts to store the energy required to propel the global fleet of vehicles.

The majority of battery factories, existing and planned, are in China. Many in Europe are being built by Chinese firms. Benchmark Mineral Intelligence, a firm of analysts, says that China will have 69% of global battery-production capacity by 2030, down from 78% in 2022, but still sufficient to make enough batteries for 90m cars every year. Europe and America, in contrast, are each forecast to have around 14% of global capacity by 2030, enough for 19m vehicles each.

China holds this lead in part because its government has been supporting electric-vehicle (ev) manufacturing and adoption for longer. Tax breaks for EV purchases began in the early 2010s, and by 2022 the Chinese government had poured around $30bn into supporting the market through consumer incentives alone; EV manufacturers received further support through local governments. These subsidies created competition between many new ev companies. Most have now gone bust, leaving winners such as BYD and CATL in a strong position. China’s pre-existing strengths in the electronics supply chain also gave EV manufacturers a boost. By 2010 there were already more than 100m electric bikes in China, thanks to government bans of petrol-powered motorcycles in city centres.

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