LABOUR DISPUTES AND SOCIAL UNREST DUE TO INFLATION PRESSURES ARE CLEARLY ON THE RISE AROUND THE WORLD AND THREATEN TO EMBED EVEN GREATER POLITICAL POLARIZATION.


Profit warnings are on the rise as companies understandably struggle to deal with inflation pressures, waning consumer demand, legacy and ongoing supply chain issues and disruptions, and labour skill shortages.


While inflation indicators may well peak in H2, they will likely remain uncomfortably high for a further protracted period, with energy prices set to remain uncomfortably high for an extended period. USD High Yield net issuance could post a record drop in 2022, and while this is in part down to US shale energy companies taking the opportunity of high oil prices to pay down debt, there will be other sectors where refinancing debt will prove to be very challenging in H2.


Labour disputes and social unrest due to inflation pressures are clearly on the rise around the world and threaten to embed even greater political polarization, and the risk of greater political paralysis. China’s property sector woes are getting worse, with the ‘mortgage (payment) boycott’ hardly likely to be resolved by the government’s latest $45 Bln resolution fund, and it should be remembered that around 70% of China’s private savings are tied up to the property sector. Last but least, it should go without saying that in light of the events of the past 3 years, the risk of another ‘unprecedented‘ shock should not be dismissed.


Marc Ostwald E: marc.ostwald@admisi.com T: +44(0) 20 7716 8534


17 | ADMISI - The Ghost In The Machine | Q2 Edition 2022


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