Steve Elms continues his annual series in which he outlines his thoughts for the year ahead. In recent years, the focus has been managing risk and improving efficiency during an extended period of uncertainty and turbulence. As Steve describes, the forecast for 2018 seems brighter, and treasurers need to support and facilitate growth without being complacent about ongoing instability and risk.
For the past few years, our discussions have centred around global uncertainty and turbulence. To what extent does 2018 look different?
We have definitely seen an upturn in confidence over the past few months with improving economic conditions, such as GDP growth and the easing of the asset purchase programme in Europe. There are signs too that we may be moving from the ultra-low interest environment that has characterised the past decade in the US and more recently the UK. This more positive environment is being reflected in our interactions with customers and the projects in which they are engaged. While the past few decades have seen more of a focus on cost management and consolidation, we are now seeing a greater emphasis on top-line growth through expansion into new markets or customer segments, and we expect this to continue into the year ahead.
Despite brightening on the horizon, storm clouds are never far away, and geopolitical issues and areas of instability remain. In Europe, for example, populism continues to hold sway. Even though this was not reflected in the overall outcomes of the recent Dutch and German elections, the results themselves were telling and the outcome of the recent Austrian and Czech elections and events in Catalonia illustrate its influence on the political landscape. During 2018, we will see more clarity on the future relationship between the UK and Europe which in turn will drive corporate decision-making, including in treasury, which may have been held off so far. Protectionist policies also continue to play out in the United States, emphasised by the proposed tax reforms and renegotiation of trade deals, and an overall focus on national over global interests.