Global and U.S. economic 2024 predictions

As 2023 comes to a close it is now time to review my predictions from last year as well as predict ten more trends I see as we enter 2024. Just like last year, I will stay away from prognosticating about where the stock market will be at this end of the year; instead, I will stick to identifying trends that supply houses will find important in this upcoming year. With all that being said, let's jump right in and review my 2023 predictions.

How did my 2023 predictions land?

1. Housing values will drop 5 to 15%

Verdict: False. Contrary to the prediction, housing prices have leveled off or slightly increased. Limited Inventory caused the prediction to be inaccurate.

2. Energy prices will come down 10-20% - average gas prices

Verdict: False. Energy prices did not decrease as predicted; instead, they increased by 21.2% from October 2022 to October 2023.

3. Ukraine, NATO nations will tire of funding the war with Russia and there will be a settlement

Verdict: Half True. The US stopped funding but no such settlement has occurred as of yet.

4. Student loan debt relief bill will not be passed in Congress but will be reintroduced prior to 2024 elections to motivate voters

Verdict: True. The bill was not passed and was reintroduced as predicted.

5. Both Biden and Trump will announce they are not seeking re-election in 2024

Verdict: Yet to be seen but at this time, False. The prediction is yet to be seen however it looks as if Trump is making waves and Biden is running for reelection. 

6. M&A Market: Buyers of businesses will be present in the market, creating competition and making any increase in interest a neutral situation for valuations

Verdict: True. The presence of buyers in the market neutralized the impact of higher interest rates. Similar to the housing market, a limited pool of inventory in the market keeps the prices neutral. 

7. 5-10% top-line growth in 2023 is my prediction, but I do not see a recession occurring in 2023

Verdict: True. The economy experienced growth, and no recession was reported in 2023.

8. The benchmark interest rate will rise 3 times and will move from 3.5% to 4.5% - two 25-basis point moves and a 50-basis point move

Verdict: Half Correct. While the prediction on the number of rate hikes was not entirely accurate, interest rates did rise, reaching 5.5%.rates

9. China’s economy will slow as civil unrest grows and manufacturing returns to the US

Verdict: Correct. The predicted trends were observed, with China's economy slowing and more manufacturing activity returning to the U.S.

My predictions for 2024

1. On-shoring: Commercial construction related to the on-shoring of manufacturing, warehousing, and infrastructure projects will be the primary driver of revenue growth for wholesale distributors in 2024.

2. Growth in 2024: The overall M&A deal flow in the U.S. and globally is expected to continue at a stable and steady pace throughout 2024. There's an anticipation of moderate growth in global deal volume, especially with early-stage deal activity showing positive trends.

3. Deal Flow: The high-interest-rate environment is leading to a trend where acquirers are focusing more on smaller-scale deals. These deals present reduced financial risk and align with a more cautious approach to risk management.

4. Digital Transformation: The digital transformation revolution is expected to accelerate, driving M&A activities, particularly in technology, energy, healthcare, life sciences, and smart manufacturing sectors. Companies are increasingly integrating digital capabilities to stay competitive and maintain a strategic advantage.

5. Middle East: In 2024, the larger problem will be the continued effects of the Israel/Hamas war that will cause disruption across the region.

6. Inflation: Inflation subsides to under 3%; interest rates see rapid cuts in the run-up to the election. Interest rates will see multiple cuts from the FED in 2024. 

7. Economy: Recession will be avoided with a soft landing in 2024 with motivations from both sides of the political parties. Moreover, companies have utilized software to reduce inefficiency and improve profitability in 2023 and now have to focus on organic, non-inflationary growth in 2024 which will lead to a soft landing and an absence of recession in 2024.

9. US politics: Trump will be the Republican party nominee and Gavin Newsom is going to be the Democratic Party nominee.

To wrap up my predictions, I hope I am right about all of the positive predictions and wrong about the negative ones. Either way, I will review my predictions next December to hold myself accountable! Good luck in 2024 and I hope nothing but the best for you, your family, and your business!