What are the big issues facing us in 2015?

There are 3 major issues for, at least half if not all of, 2015.  The first one will affect the second and both have the potential to impact the third.

1. The price of oil
2. The global economy, although specifically Europe, US and China.
3. The UK General Election

The continuing devaluation of the price of oil has already have significant detrimental impact for Russia and has the potential to severely threaten the economies of those countries dependent upon exports.  Whilst a lower oil price is good news for the consumer, with lower prices at the petrol pumps and lower costs for consumer goods; the impact on government finances, including the UK are significant.  A continued low price has not only the resultant effect that governments raise less revenue the deflationary effect could further worsen consumer confidence and the wider economy.

Economies around the world are having mixed fortunes and the prospect for world trade faces a challenging time.  Russia, which previously avoided the global downturn in the late 2000’s, now faces reduced revenue and sanctions.  The Chinese economy whilst continuing to grow does not seem the unstoppable force it once seemed.  Increasing labour charges, workers’ rights and challenges from cheaper economies threaten the once global power house.  The US recovery, funded by cheap oil, most notably shale gas, grows at a good rate; the tonic of cheap oil can only last for a while and when prices rise the strength of the US recovery can be truly assessed.  The deflationary nature of the EU has not only problems for its constituent members but also for those economies who have strong trade links with the EU.  Political upheaval in Greece and the potential for a Greek exit from the EU creates a challenge estimated, by financial experts, to be the scale of Lehman².

Any Greek exit from the EU and the resulting economic and political turmoil will, without doubt overshadow the UK General Election in May.  With no clear leading party, at the moment, the prospect for another hung parliament following May’s General Election seems a real possibility.  A coalition with a party with strong views (exit from Europe or a break up of the Union) presents the potential for the UK, its people and its economy, to be in a political maelstrom that could lead to changes to the very nature of the UK that could prove irreversible,

On a brighter note there exists the opportunity for oil prices to stabilise and provide the impetus for a global upturn.  China and the US can consolidate their economic position and prove the bedrock for global recovery.  An EU with its current members and an appetite for reform can see the spark for a new economic boost to Europe.  A vote for tolerance and reasonableness in May can see the UK build upon its economic recovery and improve the lives of all citizens living in the UK.

Our next blog will look at the trends we expect to see in procurement in 2015.