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Gravitas Research - World Industry Assessment to Date 2009
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World Industry Assessment to Date 2009

Industry Brief   |   Global
Mon, 27/04/2009 - 14:00

As the world’s richest countries struggle economically, the fastest growth will be concentrated among those producing the most sought-after commodities. While traditionally this points to the mass manufacture, low cost labouring countries of Asia, their openness to trade have left it exposed to the downturn of it’s customers - wealthier countries. This weaker global demand will push commodity prices lower, including raw materials and consumer goods that has seen China and India slow infrastructure spending.

Expected to grow by 2.6 per cent (on a purchasing power parity, or PPP, basis), the global economy is expected to see the slowest growth pace since 2002 and a full percentage point lower than in 2008. As we have witnessed, the US and European central banks will cut interest rates as economies slide and inflation recedes. With more than half a trillion dollars of assets already written off by global banks, a return to normal credit conditions will take a number of years. Successive world GDP growth rates will see some benefit from the actions taken by banks with percentage growth expected to increase beyond 2008 in 2011 at 4.1 per cent.

Gravitas Research _ global industry assessment 2009 - world trade and GDP, growth rate, 2008-2011 _ global market research

Few industries are able to withstand the economic decline, with global consumer spending limited to just a two per cent growth in 2009 attributed to the developing countries. This drop in consumer spending not only directly effects spending on consumer goods, replacement vehicles and accommodation, but indirectly impacts the complete value chain. With less call for raw materials such as steel, the price of iron ore is expected to drop in 2009 by more than 50 per cent to $0.65 per dry tonne unit. Only gold producers will have a reason to smile in 2009, as prices will remain at near-record levels, attributed in part to a savers avoiding the troubled financial services sectors and investing in this old age currency. Although developing markets are expected to pick up some of this slack, increasing their contribution by 5 to 10 per cent, the media industry will also have a difficult year, as marketing budgets get slashed in order to spend on preserving assets.

Gravitas Research _ global industry assessment 2009 - industry health Q1 2009 _ global market research

In these difficult times consumers and business alike are seeking cost reduction in the form of e-commerce. With almost a quarter of the world’s population (1.5 billion people) will use the internet regularly in 2009. Half of them searching for credit crunching price drops will make online purchases. By 2012, a further 400 million people are expected to join the online world. Business-to-business (B2B) e-commerce by then will be just as mainstream and worth ten times as much. While the number of devices including personal computers, games consoles, and mobile phones with internet connections will double to 3 billion over the next few years.

What industry should I be investing in? To find out more, contact Gravitas Research analytics team.

About Gravitas Research:
Gravitas Research is a specialized market research and consulting company, headquartered in London, UK. We publish premium market research reports, business analytics and industry analysis of the Russian, CEE and CIS industries and markets.

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