2012 in review and predictions for 2013
Season’s greetings to all of our readers. As we begin to think ahead to the prospects for 2013, let’s first reflect on what has been an extraordinary year.
The year that was 2012
In the US, a highly contentious presidential campaign concluded in a resounding victory for President Obama and a relatively unchanged power structure in Congress. The economy and US job market continued their excruciatingly slow and methodical recovery but the looming combination of severe cuts and tax increases – the “fiscal cliff” – threaten to imperil those gains.
In the UK, there has been much to celebrate: a Jubilee year for the Queen, the greatest Olympic and Paralympic Games of all time and a rare piece of economic good news, when the UK returned to growth – perhaps temporarily – in the third quarter.
For Proxima, 2012 was a year of some considerable progress. To start with, we rebranded as Proxima in February, which was a highly successful endeavor. We have begun working with a number of new keynote clients, providing us with excellent opportunities to enhance the value that procurement can deliver to these major organizations. We’ve expanded our global footprint and made some exciting hires.
We have also seen a greater understanding of our core message - that companies should look to non-labor costs as a means of delivering better returns and shareholder value. Our cornerstone piece of research, described by leading spend management blog Spend Matters as a "must read", uncovered the extent to which the opportunity is misunderstood. The Financial Times also covered our research and last month we hosted an online seminar (attended by a surprising mix of senior finance, procurement and operations folk) to more deeply discuss the results - click here to listen to the discussion.
Looking ahead to 2013
While we are bullish about Proxima’s prospects moving into 2013, the global economic landscape remains challenging.
In the U.S:
- Worries abound for the US economy in the face of expiring tax cuts and the prospect of losing 5% of the US gross domestic product, according to Morgan Stanley – the so called “Fiscal Cliff”
- All eyes are on fiscal cliff negotiations as President Obama has drawn a line in the sand and is leveraging the currency of his win in negotiations with Republicans, some of whom are finally conceding that raising taxes on the wealthiest Americans is an inevitability
- On the surface, jobs data would appear to be moving in the right direction as US unemployment stands at 7.7%, the lowest level since December 2008. But economists are not enthused as millions remain unemployed and hiring in key sectors such as construction and manufacturing remains flat
- On a positive note, hopes emerged that Apple’s decision to invest $100 million in moving production of a line of Mac computers to the US might spur upward movement in US manufacturing, even if Apple shareholders did not react kindly to the news
In the UK:
- We expect economic news to continue in a similar vein, with little meaningful growth. The Office for Budget Responsibility announced this week that it expects growth next year of 1.2%. The lack of underlying support reinforces the need for businesses to ensure that their cost bases are properly managed and shareholder attention could increasingly turn to this discipline if corporate results begin to soften as a result
- The true extent of the credit crunch is likely to become more visible, but once capital ratios have finally been built back to sustainable levels, we expect the long-sought “green shoots” to take firmer root
- Government will inevitably come under greater pressure to bring spending under tighter control, particularly if the risk to the UK’s AAA rating becomes more acute
- And watch out for the Chancellor’s Spring Budget in March – we believe capital gains tax could move up the agenda as a target for a rate cut to boost growth
In the Eurozone:
- We continue to wait for brighter skies and for answers to unresolved questions. Will sustained, long-lasting solutions be found for Greece, Italy and Spain to keep their places at the table? We suspect the answer is yes, but the effects of austerity measures and the fiscal controls placed on them will resonate around their economies for many years to come
At Proxima, we view 2013 with optimism and enthusiasm. It’s going to be a year in which we continue to work intimately with our clients, helping them improve business effectiveness and derive maximum value from their operations.
One thing is for sure – we should expect the unexpected in 2013 in what is sure to be another turbulent yet exciting year.
From everyone at Proxima, we wish you, your families and colleagues a happy and healthy festive period and we look forward to working with you in 2013.
Please add your thoughts on the year that was and any predictions you might have for 2013.