Many would say that high street retailing is dead. The reality is that no high streets have truly perished and very few will be completely wiped out. Yet many are undoubtedly shadows of their former selves, most will never be the same again, and relatively few could be considered in fine fettle.
Central government finances and fiscal policy often receive most of the attention, but for many countries, especially emerging markets (EM), local government spending far outweighs the central government.
Ongoing economic strength and tax reform are fuelling corporate profits in the US for companies large and small. Meanwhile, wage growth and rising input costs are putting pressure on margins.
It looks like 2018 is off to a solid start in the Eurozone. After the strong industrial production print for December 2017, growing 5.2% year-on-year, PMI data this week continued to register high levels of growth in the manufacturing sector.
The UK economy continues to show something of a split personality. In manufacturing, conditions look robust, with output having grown by some 5.1% over the past six months in annualised terms.
The minutes from the Federal Reserve’s January meeting helped push the yield on the 10-year US Treasury to just shy of 3%.
Finally, some good news on UK productivity growth. An expansion of 0.8% in 2017 Q4, coming on the back of a 0.9% pick-up in the previous quarter, topped the strongest six-month growth period since before the Global Financial Crisis (GFC). It has been a long time coming. The UK has lagged its counterparts on productivity for decades, but has fallen further behind since the GFC. So is this a new dawn, or a false one? And why does it matter?
The developed Asian industrial cycle appears to have hit a soft patch, with activity moderating in the fourth quarter in key economies such as Korea, Taiwan and Singapore. An industrial wobble would be particularly untimely given expectations for a healthy developed market cycle lifting activity and driving investment across the region.
Investing in the right active strategy will be key as momentum for China’s V-shaped rebound moderates once the rest of the world recovers and Beijing normalises policy.
Flexibility, amenity, connectivity, technology and sustainability (FACTS) are key for future-fit offices. Read more about our views.
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