Joe Biden’s inauguration in January will kickstart a new US presidential term that could have far-reaching consequences for the US and global economy.
But it will be only one of countless drivers of economic change, as the pandemic, potential vaccines and other developments spark new or accelerated business trends.
Here are a handful of the business trends to watch in 2021, from the widely predicted to the little-discussed— as predicted by The Economist’s The World in 2021 publication.
With the global economy taking a hammering in 2020, and likely to continue to struggle until effective vaccines are rolled out, bad debts are expected to creep higher.
The Economist expects Chinese banks’ non-performing loans to hit $500bn (£376bn), and several sovereign debt crises in the Middle East.
Yahoo Finance UK has reported on the billions set aside by European banks throughout 2020 for expected losses on loans, and on UK business chiefs’ warnings that firms have been forced to take on unaffordable debt to survive.
Governments are expected to promote or invest themselves in infrastructure spending on a larger scale. Gross fixed investment is predicted to rise 8% globally.
In the UK, prime minister Boris Johnson has already pledged to put infrastructure and construction at the heart of the UK’s long-term recovery plans. He promised earlier this year to bring forward £5bn ($6.1bn) of capital investment, including for new hospitals, schools and roads.
He even compared himself to former US president Franklin D Roosevelt, whose “New Deal” helped revive the US economy in the 1930s, though the far smaller scale of Britain’s plans raised eyebrows.
WATCH: Boris Johnson promises in June to build back better
Electric vehicle sales boom
Electric vehicle sales are tipped to to hit 3.4 million globally, up 62% on 2019 levels.
Global car sales are expected to recover by 15% in 2021 but not reach pre-virus levels as the coronavirus crisis continues to reshape global car demand.
The UK government is among those seeking to accelerate the shift to greener transport. In November, Johnson brought forward a ban on petrol and diesel cars from 2040 to 2030.
Industry figures suggest just over one in 20 new cars in the UK in 2020 was a fully electric vehicle in 2020, with costs and access to charging points widely seen as barriers to wider take-up.
Partial recovery in tourist and business travel
The Economist expects virtual business meetings to outlive the crisis, wiping out a third of corporate travel in a blow to parts of the travel, conference, events and other linked industries.
International tourism is expected to rise but only by 8% on 2020 levels, remaining 15% down on pre-virus levels seen in 2019.
The International Air Transport Association predicted in October — shortly before promising vaccine news first hit the headlines — that airline revenues would be down 46% next year on 2019 levels.
Planemakers’ production is expected to be down up to 40% on pre-crisis levels, with the incomplete recovery in global travel rippling through airline supply chains.
The aviation industry was one of Britain’s earliest to announce mass job cuts shortly after the pandemic hit in 2020, with firms bracing themselves for a recovery expected to take years. Rolls-Royce hit the headlines with 9,000 job cuts worldwide.
Meanwhile Boeing’s troubled 737 Max, grounded worldwide in March 2019 after two fatal crashes, is predicted to finally take off once more in 2021.
WATCH: Rolls-Royce announces 9,000 job losses early in 2020
Rising oil prices
2020 was one of the most turbulent and challenging in years for the global oil industry as global demand collapsed in the wake of the pandemic.
According to The World in 2021, oil prices are likely to recover to an average of $45 a barrel — though the authors caveat that further lockdowns in key markets could see it closer to $35.
Ad spending recovery
Advertising spending is forecast to recover 6% on 2020 levels to reach $573bn (£433bn), “propelled by delayed sports events such as the Tokyo Olympics, which will generate $800m in advertising.”
Ad giant WPP (WPP.L) told investors in its 2020 interim results it was targeting a return to growth by the end of 2021. CEO Mark Read said despite the “inevitable downturn” from COVID-19, the company had seen strong growth in helping firms with e-commerce strategies as online sales have soared.
Gold prices flat
The Economist’s authors boldly include a forecast for gold prices (GC=F) among their business trends to watch in 2021.
The precious metal, a popular safe haven for investors, is expected to see its price stay flat amid continued economic uncertainty, despite recovery hopes.
“If the pandemic worsens, the price could return to its all- time high of $2,000 per troy ounce.”
Return of the cinema
Global cinema revenues are forecast to jump by 78%, after a dire year for operators as the coronavirus crisis forced closures and hobbled capacity.
The launch of major films, delayed in 2020, is expected to revive their fortunes. James Bond and Batman are among the high-profile characters set to hit cinema screens next year.
The Economist’s researchers expect continued social distancing limits on capacity to still hobble revenues, however — with the year’s gains still only enough to lag 38% behind 2019 levels.
Britain’s high streets were haemorrhaging high-profile stores and jobs even before the coronavirus hit, and the pandemic left many retailers struggling to survive in 2020.
Supermarkets and many in-demand e-retailers had a strong year with more customers at home, but England’s lockdown in November alone cost ailing retailers an estimated £2bn ($2.7bn).
Global retail bankruptcies are predicted to edge higher next year. Sales will only grow 3%, failing to reach pre-virus highs, and “worsening virus outbreaks could erase growth altogether,” according to The World in 2021 — first published only just as leading vaccine trials revealed their promising results.
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