New Normal aims to help you identify the key changes in the wider landscape that will impact you and your business.

Outlook

First there was the pandemic and associated supply chain chaos. Then this year has seen the rise of ‘Putinflation’ as Russia’s invasion of Ukraine creates a growing risk of energy, food and financial crises.

“We are facing the biggest crisis the post-war Federal Republic has ever had. We have to be honest and say: First of all, we will lose the prosperity that we have had for years.”

German Employers Association President, Rainer Dulger, 13 July

Risk management is key to survival, and future success

Scenario planning, based on a wide range of potential outcomes, will be key to success given today’s levels of volatility. We can no longer simply tweak a base case to reflect whether we are feeling marginally more optimistic or pessimistic.

Recession till 2025.  We need to be realistic about the outlook and not assume the current recession will be over by Christmas. The issues we face are more likely to take years to resolve as they involve deep-seated problems

China is changing. It has bankrolled global growth since 2009, but now its model is shifting to self-sufficiency, alongside a major move into recycling to meet Net Zero targets. Its real estate market has been ‘subprime on steroids’ and its bursting will have far-reaching consequences for the global economy

Food shortages. As Sri Lanka’s suffering has shown, social unrest is rising around the world as food shortages increase along with prices for other essential goods. In turn, this will inevitably destroy the myth that demand growth in developing countries can somehow balance the downturn in developed markets

Invest for the future.  Recession will accelerate the transition to a Net Zero economy. The invasion is already reducing fossil fuel demand. And demand patterns are changing very quickly as people refocus on ‘needs’ rather than ‘wants’.

Paradigm Shifts

Some of these changes are already becoming obvious, such as rising levels of debt and the threat of inflation. Others are still to appear. These relate to the way behaviour is changing in response to the Covid pandemic and the Ukraine war in 5 key areas where major paradigm shifts are underway:

DEMAND PATTERNS

Demand patterns paradigm shift in global business

The lockdowns have broken down the inertia surrounding work and home-based routines…

RESHORING SUPPLY CHAINS

Reshoring supply chains paradigm shift in global business

Global supply chains have proved very fragile during the pandemic. They have collapsed…

RENEWABLE ENERGY

Energy abundance paradigm shift in global business

Energy markets are seeing a major paradigm shift, with the pandemic and the Ukraine war accelerating the shift to renewables…

CIRCULAR ECONOMY

Circular economy paradigm shift in global business

The need to reshore supply chains in a world of potential energy abundance suggests that moves towards a circular economy will accelerate…

ADVANCED MANUFACTURING

Advanced manufacturing paradigm shift in global business

Many manufacturing operations still operate as they would have done 500 years ago, or even 50 years ago…

“Be Bloody Careful” As Recession Hits Europe and China
with Paul Hodges
China's Real Estate Bubble Burst Will Affect Everyone Worldwide – RealVision interview with Paul Hodges
China’s real estate bubble burst will affect everyone worldwide
with Paul Hodges

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New Normal in the news

2022
 
Aug Real Vision: Paul Hodges Believes Markets Will Refocus on Price Discovery
  SOAS PODCAST: China’s problems with faltering growth and rising debt
  PODCAST: Think Tank: Covestro profit warning, chemical price slump highlight H2 risks
 
Jul PODCAST: Think Tank: Messy supply chains complicate Europe gas rationing plans
  PODCAST: Think Tank: Gas rationing for chemicals, fertilizers likely in Europe this winter
  PODCAST: Think Tank: Chems sector resilient in Q2 but conditions forecast bleak for H2
 
Jun PODCAST: Think Tank: Europe, German chemicals face gas supply crisis
  PODCAST: Think Tank: INEOS project halt highlights Europe’s plight