Glimmers of light in the uncertain darkness

Across the northern hemisphere, summer is drawing to a close and leaders are strategizing and preparing for the typically busy fall and winter months ahead. Over the last few months business leaders have had to juggle growth ambitions with deep economic and geopolitical uncertainty, but there are some glimmers of light and hope.

While most of us took a well-earned break and rested, KPMG’s economists around the world have been busy analyzing the data and offering some insight into what might lie ahead for us. While the outlook is mixed, I’ve been reassured by some of the findings.

Central banks have been pushing up interest rates to dampen inflation and recession fears. In the UK, monetary tightening is starting to impact the jobs market -- the latest KPMG and REC report revealed permanent placements fell at their quickest rate since 2000, but the economy is still growing, with the likelihood of a recession fading. In Germany, inflation is down, but so too is economic output with the country’s dependence on production and industrial sectors, shifting from an asset to a burden. It’s a similar story in the US, with Chief Economist, Diane Swonk, saying she’s more optimistic now than she was six months ago, but caution remains key. 

Much of what KPMG’s Economists have been saying is echoed in two great reports released this month – KPMG’s Pulse of Fintech – looking at the number and value of deals in the fintech space in the first half of this year, and KPMG’s Venture Pulse, delving into the venture capital sector. In both reports, the value and quantity of deals and investments were down globally, but – once again – there were some small glimmers of hope. Even if you’re not directly involved in the venture capital or fintech industries – the findings offer genuine insight into wider economic trends right now. 

If you’re a CEO or decision maker, it’s clear there remains a deeply uncertain path ahead. More than ever, we need to double down on what we do best and ensure that our products and services are robust and focused on long-term sustainable growth.

That’s a view backed by Alexander Stubb, the former Prime Minister of Finland and an authoritative voice on geopolitics and economics. He joined KPMG’s Global CEO and Chairman, Bill Thomas, on Global Perspectives – the KPMG podcast series for business leaders. The key takeaway from both guests is that we need to break down barriers and collaborate more today than we ever have, to tackle the big issues that are impacting the planet right now. 

Finally from me this month, many of you may know that I was born and raised in Hawaii. The recent wildfires in Lahaina Maui and the devastating news of the human and environmental toll is absolutely heartbreaking. I spent time in Lahaina when my father lived there and am shaken by the devastation. While my family has not been directly affected, I am encouraged by the stories I hear about survivors and people coming together locally and globally to rebuild and support the community.

This year we have witnessed destructive wildfires burn across a number of continents and there appears to be an increasing correlation between these wildfires and rising global temperatures. Although climate change is not the sole factor in the increase of wildfires, it is a contributing factor and fast becoming a sad reality of our everyday lives. I have been in close contact with my family and friends in the area and want to thank those of you who have reached out to me and to our affected KPMG colleagues. Your support and compassion during this difficult time is sincerely appreciated.

Regina