U.S. Growth Likely in 2023

December 12, 2022

The only reliable constant is change. After two years in the grip of a pandemic, the world was ready for change in 2022. But instead of a triumphant resurgence, war in Europe, shortages of energy, food, and labor, and successive waves of the SARS-CoV-2 virus were constant reminders that we were not out of the woods yet.  

So, what are we to expect in 2023? Headwinds are many: an aging demographic in much of the developed world, rising inflation and interest rates, and a continued energy crisis in Europe. All of which are dragging down global growth. Are we destined to spend another year or more in the economic doldrums? Or is there hope in the new year that the tides will finally change? Whether from delusion or blind optimism, my quick answer would be yes: there is a glimmer of hope in 2023 for the Americas.  

Spurred by federal and regional incentives and abundant, inexpensive energy, many companies have announced capital-intensive, mega-projects in the US and Canada in the sectors of batteries, electric vehicles, semiconductors, and energy. It’s hard to imagine announcements will continue at the same frenetic pace of 2022. The coming year will be the one where many of the suppliers for these operations will announce a new home.  

To reduce risk, companies will continue to realign supply chains to be more regional rather than global. This measure favors Mexico and long-overlooked Central and South American countries like Panama and Colombia.  

One important unknown is whether there will be a workforce to man the projects that are being considered. The number of open jobs remains consistently high, with more than 10 million in the US alone. Many factories are operating at less than capacity due to labor shortages. The US must fix its immigration problem if it is to fully realize the benefits of the planned investments. With political gridlock in Washington, that isn’t likely to happen in 2023. 

The first law of physics is inertia. An object in motion remains in motion. Economic growth in the US, while not as strong as when coming out of the depths of Covid-19, remains positive. I’m predicting that continued growth in the Americas, at least for 2023, is a pretty safe bet. 

This article first appeared in the December 2022/January 2023 print edition of fDi Intelligence. View a digital edition of the magazine here. 

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