In September’s episode of the Evelyn Partners Investment Podcast Cherry Reynard and Daniel Casali look at how the services sector is supporting global economic growth. This includes phenomenon such as ‘Swiftonomics’ – the blockbusting tour from Taylor Swift that is galvanising consumer spending. But can manufacturing catch up?
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The global economy has proved resilient despite rising interest rates. Services have been an important factor, supported by excess household savings built up during the pandemic era. Along with solid labour markets, this has continued to prop up consumer spending and economic growth.
An example of this has been the phenomenon of ‘Swiftonomics’, where Taylor Swift’s billion dollar global tour has shown that consumers are willing to spend – and spend a lot – on specific activities. The Women’s Football World Cup in Australia has also brought in significant crowds, demonstrating the resilience of spending in some segments of the economy.
Can this strength last? Greater spending on services should be supported by the boost to real incomes from lower energy costs and falling inflation. There is still pent-up demand in certain segments, such as travel. The message from the manufacturing sector, however, remains sober, with activity currently at pandemic-era lows.
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