Morgan: As we start the New Year, our clients are faced with a resilient U.S. economy and a global outlook that is generally positive. Businesses will continue to seek growth overseas, but navigating in international waters is becoming increasingly challenging.
This year, we'll be focused on helping our clients understand and act on changes in trade and foreign investment policy in the U.S., Europe, China and the rest of Asia, the Middle East and Africa, and Latin America.
In addition, economic reforms underway in many countries will affect the direction of foreign investment in 2020.
High on the agenda will be continued progress in India and Brazil and greater opening in China.
Throughout 2020, we'll be working with our clients to support changes to their supply chains and end markets, and how to leverage technology in a cybersecure operating environment. And finally, we’ll be helping our clients successfully execute on their treasury transformation plans in order to optimize, grow, and simplify how they do business globally.
With the challenges and opportunities ahead, one thing our clients can be certain of is the reliability of J.P. Morgan as their global banking partner. Throughout 2020 and beyond, we will continue to help our clients seize the opportunity to grow globally uninterrupted, regardless of any headwinds that this new year may bring.
Jim: This year may call for a new definition of global economic health. Though most developed economies have recovered from the last recession, many central banks continue to pursue accommodative monetary policies. In the U.S., Japan, and Europe, unemployment rates have fallen to the lowest levels seen in decades.
In short, we're seeing strong labor markets worldwide amidst slow growth, implying that historical norms for economic growth have shifted.
There are two important trends that businesses should monitor to stay ahead this year. First, keep an eye on labor markets globally. Job trends have been impressive despite slower growth than we’re used to. At the same time, central banks in Europe and Japan are still very accommodative. And these policies have contributed to historically low bond yields. But if labor markets remain strong, they could begin to withdraw those policies in the near future. Second, there’s overwhelming evidence that the secular growth of developed economies has slowed as a result of demographics. As workers get older, the growth of the working age population slows.
That, combined with the transition from economic recovery to steady state growth, implies that the natural growth of developed economies will be slower than in the past decades.
But shifting demographics aren't the only thing impacting the dynamic global workforce. Tech innovation is raising the bar for new workforce skills. While a surge of retirements is removing an unprecedented amount of job experience from the workforce.
Businesses must take the initiative to invest in their employees and improve productivity. Growth this year may be slower, but this expansion looks more sustainable than what we've seen in the past.
