The world's major industries are all set for further growth in 2019, but there are some worrying risks. Two years ago, when The Economist Intelligence Unit issued Industries in 2017, we predicted that the election of Donald Trump as US president in November 2016 could bring huge changes for global business. We were not wrong. This edition of our annual report discusses the changes that Mr Trump's policies—and other global trends—have already brought to six industry sectors: automotive, consumer goods and retailing, energy, financial services, healthcare, and telecoms. And we look ahead to the challenges facing these businesses in 2019. This report highlights five major risks that could affect our industry forecasts for the year ahead. The US-China trade war: we have cut our 2019 growth forecasts for the automotive and consumer-goods sectors in particular compared with six months ago. A global slowdown: even those countries not directly affected by growing trade barriers could be vulnerable to a change in business confidence in 2019, with the most likely impact being on emerging markets. Brexit: the UK's exit from the EU in March 2019 will be a drag on sectors including financial services, automotive and healthcare, regardless of any deal that is struck. Sanctions on Iran: the US's decision to backtrack from the international Joint Comprehensive Plan of Action could push up global oil prices in 2019. Cybersecurity and technology risks: a tussle for technological dominance is at the core of the US-China trade dispute, while regulators are also struggling to ensure safe connectivity. Most of these risks are, to some degree, certainties. The UK will officially leave the EU on March 30th 2019, while US sanctions on Iran have already been imposed. It is not yet clear, however, what the full effects of these will be. Brexit's impact in 2019 depends on whether the transition deal that was negotiated in mid-November of this year is finalised, easing the UK's trade problems as it exits. In the case of Iran, much hinges on how successful the US—unsupported by the EU—is in blocking Iran's exports. If global oil supplies tighten sharply, then oil prices could yet soar. As for cybersecurity and technology risks, they are always present but are likely to increase in 2019 as connectivity spreads. The power struggle between the US and China has already come to a head in 2018. In a threestage process, the US has imposed additional tariffs of between 10% and 25% on Chinese imports worth about US$200bn a year. China has retaliated with its own trade barriers against the US, while liberalising terms with some of its other trading partners. However, a further round of retaliation now looks likely in either December 2018 or early 2019, and could cover all of the remaining trade between the two countries.
Source: The Economist
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