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Macro Foresight

Understand major global macroeconomic shifts and their implications for corporate strategic planning and enterprise-wide transformation.

Overview

Business leaders need data-driven insights to continuously steer their companies along the path to growth. We offer strategic advice to inform C-suite strategic planning, corporate development, customer strategy and M&A. Our goal is to translate complicated trends into simple, pragmatic recommendations for our clients.

We provide detailed business insights on key economic trends, such as how consumer behavior is changing, corporate finance developments and risk analysis. We help senior executives assess economic risks and monitor key trends, as well as support business-critical modeling and analysis.

We have hubs in the US, Europe and Asia and work across a wide range of industries to help businesses address the most important macroeconomic challenges for their sector. And our macro-analysis helps clients to carry out scenario and impact analysis, track industry value shifts and understand supply chain exposures.

How we work

Executive leadership and board briefings

Provide regular updates to senior executives on the evolving macroeconomic and financial landscape, helping them to stay on top of potential implications to their company and industry and adapt swiftly.

Growth & market entry

Complement go-to-market strategies with assessment of macroeconomic trends in specific regions and/or industries to support long-term sustainable growth.

Capital project impact assessments

Quantify the value of major capital projects to support investment rationale and analyze the broad economic, social and environmental benefits to inform key stakeholders.

Scenario planning

Devise plausible future outcomes to help firms model and test their possible responses and actions.

Company economic exposure diagnostics

Identify how prevailing macroeconomic headwinds and tailwinds are influencing a company’s top- and bottom-line performance, and provide action-oriented solutions to capture opportunities or mitigate risks.

Investment strategy/private equity

Develop investment strategies and market assessments for PE funds and corporates, with pre-deal market/sector studies helping to identify attractive investment options.

Enterprise transformation

Identify appropriate corporate finance levers to address client enterprise value challenges and increase portfolio value, e.g., Total Enterprise Reinvention.

In the spotlight: Inflection ahead

This POV examines the anticipated consumer downcycle and shares what consumer-facing businesses can do to prepare.

In 2022, the re-opening of economies created a consumer spending impetus that hit up against a high cost-of-living crisis. Consumers pushed through headwinds by drawing on savings accumulated during the pandemic, trading down to budget products, and cutting back spending on big-ticket durables. This allowed spending to remain mostly resilient, especially in the US. But this year, the consumer cycle will likely reach an inflection point. People are facing persistent inflation and high interest rates, increasing household wealth erosion from falling asset prices, and growing income and employment uncertainty. A significant slowing of consumer spending is likely, with high risk of whiplash and cliff effects. What does this mean for consumer-facing businesses?

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In anticipation of these consumer pressures and spending shifts, companies should consider some of the following strategies to get ahead of the market, build resilience and capture recession-time opportunities:

  1. Help vulnerable consumers first, pursue sales second
  2. Create dynamic data-driven pricing strategies
  3. Leverage targeted marketing and loyalty programs
  4. Explore ecommerce channels to capture more price-conscious consumers
  5. Stress-test the P&L against different spending slowdown scenarios

A recessionary environment presents challenges, but this is also an ideal time for companies to focus on the loyalty of key customers and build a deeper moat around the brand for the long term. With the right strategies, consumer-facing companies can stay on course for growth as they, and their customers, face greater economic headwinds in the year ahead.

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Monthly briefs

Our monthly briefs summarize key global macroeconomic developments and are intended to inform executive teams, boards and investors on the state of the economy.

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Explore April macro brief

Data suggests major economies have not been significantly derailed by recent financial stress and remain on slow growth path.

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Explore March macro brief

Concerns about financial stress and instability cast a cloud over the global economy in March following the failures of several banks.

 

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Explore February macro brief

Global economic activity has exhibited some green shoots over the past two months and suggests an improved growth outlook in the near term.

 

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January macro brief: Top macro trends in 2023

The global economy faces multiple headwinds in 2023. Find out what some of the key areas are to watch.

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April macro brief

Data suggests major economies have not been significantly derailed by recent financial stress and remain on slow growth path.

April data suggests major economies have not been significantly derailed by recent financial stress, but remain on a slowing growth path.

As the post-pandemic tailwind to services spending dissipates, it seems more likely that services sector growth will downshift to match the weakness in industrial activity, rather than the other way around—this convergence will likely mark the onset of recession.

An energy-led drop in headline inflation globally in March was a positive development, but is already a lagging inflation signal as oil prices rebounded forcefully in April amidst OPEC supply cuts; core inflation also remains elevated and sticky in the US and Europe.

In the background of these cyclical dynamics, the recalibration of government policies to changing geopolitical and technology realities continues to reshape the business landscape —recent measures include export restrictions, green investment subsidies and regulations on AI.

  • Despite limited financial fallout thus far from recent banking failures, companies should remain wary of the next possible “shoe to drop” in an environment of slowing growth and continued monetary tightening. Distress in the commercial real estate sector is a key area to watch.
  • Companies should resist becoming complacent in the face of receding inflation and ongoing resilience in consumer spending—financial pressures on consumers are growing, post-pandemic tailwinds are dissipating, and an inflection point is likely with high risk of cliff effects.
  • While pandemic-related disruptions to global supply chains now appear to have normalized, risks and costs from changing geopolitics are on the rise; scenario-based geopolitical risk analysis, resilience and continuity planning, and supply chain recalibration will grow in importance.
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March macro brief

Concerns about financial stress and instability cast a cloud over the global economy in March following the failures of several banks. These events overshadowed continued signals of economic resilience in the recent data, including improving PMIs and employment, though neither captures any potential hit to sentiment and activity from mid-March onwards.

These bank failures could trigger an accelerated credit crunch and negative confidence spirals that bring forward the onset of recession and amplify its severity.

Rising financial stress is occurring against a backdrop of unabating inflation, as sequential inflation momentum continued to accelerate in the US and Europe, reflecting persistent wage pressures driving stickiness in services inflation.

Central banks globally have to balance their commitment to fighting inflation against the risk of putting undue pressure on a financial system already showing fragility; the likelihood of “misses” on either goal remains high.

  • Banks should stress-test portfolios under a range of scenarios including the new behavioral deposit patterns being seen, assess liquidity of assets, review concentration risks to mitigate over-exposure, and re-evaluate investment portfolio hedging strategies.
  • Non-financial corporates, especially tech firms, should consider reviewing their treasury and risk management functions, transforming their strategy and infrastructure to protect and optimize cashflow.
  • PE/VCs and asset managers may face increased redemptions and scrutiny of illiquid assets, as well as challenges with new fundraising.
  • All company types should consider incorporating more adverse financial contagion and economic fallout scenarios into their strategic, operational and investment planning.
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February macro brief

Global economic activity has exhibited some green shoots over the past two months and suggests an improved growth outlook in the near term.

After largely negative momentum going into 2023, global economic activity has exhibited some green shoots over the past two months.

  • Flash PMI surveys of business activity in February signaled a return to expansion in most major economies for the first time since mid-2022.
  • Consumer sentiment turned less pessimistic in January, on balance, and into February as well for the US.
  • Employment growth remained robust, particularly in services industries that continue to benefit from pent-up consumer demand.

However, this demand resilience is coming at the expense of slowing of progress on inflation reduction. Core inflation remained stubbornly high in the US and edged up higher in the Euro area.

Overall, these data developments suggest an improved growth outlook in the near term, but raise the prospect that central banks will have to become more aggressive in the fight against inflation, which could increase the severity of potential recessions down the road.

Corporate planning exercises should start to more seriously consider macro scenarios where: (1) interest rates go higher and stay there for longer than previously expected; and (2) a potential recession begins later in 2023 (or in 2024) but is more severe or protracted.

As labor market tightness and the war for talent persists (particularly in the service sector), workforce management will rise in importance – strategies and capabilities for talent retention, performance-linked compensation and cost-saving process automation will be key.

Consumer-facing businesses need to be more selective in passing on costs to customers given growing risk of demand destruction. Consider brand pricing power, economic vulnerabilities of specific customer segments, and geography when evaluating pros and cons of price hikes.

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Top 10 macro themes for 2023

The global economy faces multiple headwinds in 2023. Key areas to watch include:

  • Persistent inflation: While global inflation may start to recede in 2023, multiple risks could counteract disinflationary trends—e.g., China re-opening, continued war in Ukraine and resilient labor markets.
  • Looming recession: Tightening financial conditions, high energy prices, cash-strapped consumers and geopolitical risks raise the likelihood of recessions. A mild recession remains the base case for the US with mild-to-moderate recessions forecast across Europe.
  • Trade decoupling: Global trade has remained robust, but recent policy developments (e.g. industrial policy) and heightened US/China tensions increase the risk of some trade decoupling in 2023.
  • China’s uncertain rebound: The scale of increase in China’s growth from re-opening will be a key variable for the global outlook. 
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Persistent inflation squeezes profitability. Gross margins face continued pressure as inflation and weakening demand constrain companies’ ability to pass on costs to customers.

Consumers limit spending. Consumer spending drops as households run down their savings and face up to inflation, falling asset prices, job uncertainty and higher interest rates.

Tightening financial conditions expose risk. Rising rates, other funding challenges and contagion risks are increasing corporate financial stress and driving the need to for cost take-out.

The strong USD intensifies economic headwinds. USD strength will increase cost pressures for companies buying US-sourced and USD-invoiced inputs and raise the risk of debt crises in many emerging markets.

China’s economy reopens. China’s easing Covid restrictions boost consumer demand, add production and increase global competition for resources – but expect a “bumpy” reopening.

Geopolitical developments keep volatility high. International tensions continue to create uncertainty in supply chains, resources and markets.

Depressed valuations create opportunities. Equity markets are still pricing-in a soft landing, but further asset pricing corrections are likely. PEs have dry powder to use, but higher financing rates mean they’ll face stricter criteria for LBOs.

Job market slows, but war for talent persists. Slowing global growth will help loosen the overall labor market, but certain industries will see competition for talent well into 2023.

Global energy crisis pressures businesses. Turbulence in energy markets with a risk of undersupply and elevated prices will continue to weigh on economic growth, company margins and strategic development.

Geographic shifts in industrial production. Higher energy prices, a weaker European economic outlook and supportive US policy all increase the likelihood of more European manufacturing relocating away from Europe.

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Meet the team

Chris Tomsovic

Managing Director – Accenture Strategy, Macro Foresight Global Lead
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Nick Kojucharov

Principal Director – Accenture Strategy, Macro Foresight North America Lead
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Aditya Harit

Senior Manager – Accenture Strategy, Macro Foresight Europe Lead
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