Whether you’re ready or not, 2023 is here. With it comes new economic challenges both on the global front as well as domestically. Many of the trends we saw in 2022 will continue as many people hunker down for a recession. We’ll see significant changes in consumer spending, the labor market, and energy sectors. But not every industry will feel the heat equally. Below you’ll find five industries expected to face an uphill battle in the months to come. If any of them hit a bit too close to home for you and your business, the time to act is now. Be sure to read to the end to discover some tips to help your business weather 2023.
Major 2023 business trends forecast
There are a few major trends every business should keep an eye on in 2023, regardless of industry. One is the European energy crisis. As the region experiences the coldest months of the year, demand will increase. Some areas are apt to experience social unrest and food insecurity as the global recession continues. This is bound to exacerbate supply chain challenges for anyone moving goods in Europe. We’ll also see an uptick in cybercrime as more and more services seek to incorporate IoT and AI, exposing vulnerabilities. Domestically, corporations are likely to continue suffering “talent shock,” unable to retain skilled talent in high-tier positions.
Fortunately, for most of us in the United States, we’ll be spared the worst of these issues. However, we aren’t an isolated economy and will feel various impacts as some situations worsen and some improve. Economists expect the industries below will be facing harder challenges than most. If you’re directly involved or just looking to invest in any of the five, be sure to budget carefully, diversify assets, and seek the help of a reliable broker.
Telecom
Challenges in the telecom industry break down into two issues: high investment costs and decreased revenue. Pricing has mostly been self-regulated until now, but political influence will begin to impact cost and access. As social justice concerns move increasingly to the forefront and access to technology is seen as a necessary part of life, regulators will target this industry for change. The growth of AI, IoT, and the metaverse sees corporations gearing up for a new technological revolution. But, for telecom to support it, it’ll have to invest significantly in infrastructure upgrades.
Manufacturing
Although demand is high, the manufacturing industry faces operational bottlenecks. Continuing supply chain issues are making it difficult for raw materials to get where they need to go. The increase in energy costs makes transportation of both materials and finished goods more expensive. As advanced technology brings digital tech upgrades, the demand for skilled labor increases. However, many seasoned workers are slow to keep up. Newer workers might have the latest tech know-how but not the baseline knowledge required for other parts of the job.
Travel
Travel, particularly airline travel, is under scrutiny for its carbon emissions and impact on the environment. As sustainability and the global climate crisis weigh heavily on corporations heading into 2023, getting over this hurdle won’t be easy. Additionally, the global recession is shrinking the expendable budgets of would-be travelers. Air travel, luxury accommodations, car rentals, and cruises get cut in favor of essentials like food and gas. The travel industry is feeling labor shortages keenly since many services inherent to the travel industry require a human touch. Those who have the money and intent to travel will expect the best, resulting in pressure on airlines and resorts to meet exceptional experience standards.
Cannabis
Cannabis may seem like an odd inclusion to this list, but cannabis legalization is on the rise across the nation. In places where recreational use is already legal, it can represent a substantial contribution to the local economy. But it’s not just politicians and users who have taken notice. Competition from alcohol, tobacco, and Big Pharma will be more prevalent in 2023 as large corporations seek to enter the cannabis space. This intrusion will impact an industry dominated by small businesses. Cannabis retailers still can’t legally access funding from Federal banks, which presents a problem raising capital as interest rates go up. Competition as well as interest in business acquisition, where allowed, can change the picture for the industry in many areas.
Retail
As the recession deepens, everyday consumers will seek to rein in luxury spending, especially after the holidays. When they do spend, it’s more likely to be on high-ticket items they’ve been saving for rather than a variety of mid-tier purchases. Retailers of items in the under $50 range will see a drop in sales unless they’re a big-box chain. Stores like Walmart, Costco, Target, and Lowe’s are expected to stay strong throughout 2023. Consumers will also be increasingly service-focused rather than goods-focused, spending their cash on dining out, dry cleaning, and haircuts. This could spell trouble for retailers who stocked up expecting demand to stay high and anticipating supply chain shortages.
The economy is slowly trying to correct itself after the past two years of uncertainty. Inflation and global political conflict are putting strain on that recovery. If you’re a business owner looking to prepare for 2023, it is an opportunity to refine your business strategy. Look to claim a larger share of the existing market through smart marketing and access funding to keep deals moving.
How can you do that? Build a relationship with one of our loan brokers to support your financial strategy. Restructuring debt and finding the right lenders will help you manage the cost of money and keep business moving. Having a broker on your side can help you make 2023 a successful year.