June 27, 2024
Here’s the current state of the U.S. economy in a nutshell: No recession is expected in the foreseeable future; inflation is predicted to drop further, which may lead the Fed to lower interest rates; and economic growth is solid but decelerating.
And here’s what all that means for the manufacturing, financial services, government and logistics sectors, according to the experts at Deloitte, Goldman Sachs, J.P. Morgan, and elsewhere.
Manufacturing
Reducing costs to counteract the impact of higher interest rates involves technologically enhanced efficiency, supply chain diversification, and addressing labor shortages through things like reskilling and increased work flexibility. Above all, digital transformation is key. “Technology is poised to play a significant role in supporting manufacturers in taking on the challenges they may face in 2024,” a recent Deloitte report notes. “With a persistent search for efficiency and focus on building resilience across the organization, many manufacturers look to continue to pursue their digital transformation objectives—even as some may be considering pausing investments because of the challenging business environment. Companies seem to be embracing a smart factory approach, exploring the industrial metaverse, and investigating the possibilities of generative AI, one of the latest additions to the arsenal, as tools they can use to add value to their operations.”
Financial Services
As with manufacturing, growth in the financial services sector is expected to remain modest—in part due to the possibility of lower interest rates ahead. Also like manufacturing, this sector is addressing economic uncertainty and other challenges by beefing up technology, including cybersecurity. “In 2024, the technological turbulence—including generative AI, transition to the cloud, increased fraud and cyber risk, and blurring of industry lines, such as the embedded finance trend—will require financial services leaders to be much more agile than ever,” this Deloitte Insights report predicts. “New strategic options will need to be created to help firms tack in the direction of the prevailing breeze, wherever it’s coming from.” This write-up from Lambert suggests several ways to meet challenges and “future proof” the industry. They include Disciplined Capital Allocation, Enhanced Risk Management Practices, Adaptive Business Models in a Dynamic Environment, and Investor Relations and Equity Markets Engagement. The U.S. banking and financial services industry is at an inflection point,” the report concludes. “By embracing a strategy that is both prudent and progressive, the sector can turn current challenges into catalysts for growth and innovation.
Government (state and local)
According to the National Association of State Budget Officers, enacted state budgets show a 6.5 increase over 2023. That increase in spending (which often goes hand-in-hand with new legislation and regulatory shifts) is going toward a variety of things that are intended to mitigate future downturns and bolster growth. They include federally backed infrastructure development, investments in mental health programs, the enhancement of education and social services like healthcare programs, school vouchers, federally backed grants for electric vehicles (part of the Inflation Reduction Act), reduced taxes, agriculture and, of course, the implementation of advanced technology like generative AI. As this U.S. Treasury report notes, “In 2023, state and local government spent $4 trillion on the wide range of public goods and services that citizens use on a day-to-day basis. State and local spending falls into seven main categories: public assistance (which includes the state-funded part of unemployment insurance), elementary and secondary education, higher education, health and hospitals, highways and roads, criminal justice, and housing and community development. These spending categories play a key role in protecting our most vulnerable citizens; keeping our citizens healthy; building and maintaining public infrastructure like roads, parks, libraries, and utilities; and investing in our future, most notably through public education.”
Logistics
Challenges abound in this sector. According to Supply Chain Dive, “Labor clashes, geopolitical risks and freight supply-demand misalignment are prompting logistics managers to reevaluate their supply chain strategies in 2024.” In a recent article, TechHQ (partnering with transport management system provider Alpega) singled out the five biggest challenges to logistics in 2024. They include labor shortages (particularly among transport drivers), stricter environmental regulations, siloed logistics, global crises and complexity of global networks. Solutions include workforce management (more flexible schedules and training programs), increased use of technology and automation (such as picking and sorting equipment), a push toward greater sustainability, more supply chain collaboration, and improved customer satisfaction (also delivered in part through technology that tracks, updates, etc.).
As you might have noticed, the key to mitigating many of these challenges is technological innovation. But not every organization has the time or resources to implement and maintain the tech tools that are necessary to survive and thrive in today’s economy. That’s where IT managed services providers (like Mindsight) come in. Partnering with an MSP can save time and money. Plus, it’s a way to harness the latest and greatest technology while forming strategic partnerships with experts whose only goal is to help your business. “Outsourcing non-core functions has become increasingly prevalent in businesses, and this trend is poised to strengthen in 2024,” Andrew Collis, CFO at Moneypenny, told Sage Advice in late 2023. “In the past, the driving forces behind this surge were to reduce expenses and enhance operational efficiency. However, disruptive outsourcing is now about collaborating with partners to integrate services that organizations cannot rapidly develop independently. This approach aims to drive innovation, fuel transformation and propel growth.”
For more details, email us at info@gomindsight.com or call (630) 981-5050.
About Mindsight
Mindsight, a Chicago IT services provider, is an extension of your team. Our culture is built on transparency and trust, and our team is made up of extraordinary people – the kinds of people you would hire. We have one of the largest expert-level engineering teams delivering the full spectrum of IT services and solutions, from cloud to infrastructure, collaboration to contact center. Our highly certified engineers and process-oriented excellence have certainly been key to our success. But what really sets us apart is our straightforward and honest approach to every conversation, whether it is for an emerging business or global enterprise. Our customers rely on our thought leadership, responsiveness, and dedication to solving their toughest technology challenges.
Mindsight is a suburban Chicago company that provides fully managed IT services to clients in a variety of sectors .