The geopolitical instability and economic uncertainties that resulted in a rocky fourth quarter in 2018 will continue to intensify in 2019, cautions GEP’s recently published Procurement and Supply Chain Outlook 2019 report.
Trade tensions between the U.S. and China will increase, resulting in wide-ranging implications for businesses. Not only will trading costs of key goods steadily rise, a global realignment in trade flows is also in order as both superpowers seek out newer trading partners. Brexit-related uncertainty will continue to worry enterprises. Rising levels of isolationism and civil unrest across Europe will further slow down growth. This will also destabilize the emerging markets that are otherwise poised for fast growth.
Add to that, the increasing global debt burden, which is at a record high. It will be a major risk factor to track. With unemployment rates in the U.S. and China at their lowest, labor costs, especially in the business services and tech sectors, will increase. Procurement and supply chain pros will also find it difficult to manage overhead costs in the wake of climate change, which is slated to cause major supply chain disruptions across most regions in the coming years.
The market sentiment is clearly waning, and procurement and supply chain leaders will need to plan carefully to mitigate risks. This challenging year will demand agility and responsiveness above everything else. Procurement leaders will need to drive the introduction of new emerging technologies, digital talent, new capabilities, greater insight creation and continuous training of the workforce to keep up with the pace of change.
GEP has identified three major trends that will impact procurement and supply chain in 2019:
- Rising Trade Tension and Protectionism
- Dynamic Labor Conditions
- Costs of Climate Change
Download the GEP Procurement Outlook 2019 Report to get the lowdown on the major global and business trends and how they will impact your business. (Complimentary Access.)