Despite the tight monetary policy headwinds, the US economic growth remained resilient in 2023 driven by strong consumer spending and declining inflation, which has bolstered global economic performance as well. Although real gross domestic product (GDP) growth is expected to slightly decline from 2.5% in 2023 to 2.2% in 2024 due to delayed effects of monetary tightening, key industries like infrastructure, green energy, and semiconductors continue to show strong potential. Initiatives such as the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and the CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act are pivotal in attracting investments and rebuilding domestic manufacturing capabilities. This strategic focus aims to enhance national security and mitigate risks from external disruptions, positioning the US for sustained economic growth momentum.
Is your team leveraging the transformation in the US economy to seize growth opportunities and drive innovation?
Frost & Sullivan’s Economic Analytics Webinar series delved into the dynamic landscape of “United States Economic Transformation and Growth Opportunities: Is the Economy Poised to Surge Ahead?” This engaging discussion yielded pivotal contributions that are shaping the future of the global economy, thanks to the collaborative efforts of industry experts.
The following experts collectively brainstormed to craft transformative perspectives:
Rituparna Majumder, Growth Expert & Industry Principal, Frost & Sullivan; Leonardo Sampieri, Growth Expert & Industry Analyst, Frost & Sullivan; and Prabhu Karunakaran, Growth Expert & Industry Principal, Frost & Sullivan.
Note: Gain valuable perspectives from these industry experts by clicking here to access the recorded session of the Think Tank.
Is your company thriving amidst the transformation in the global economy?
Short-Term Economic Outlook (2024-2025):
- A short-term growth dip is expected, with 2025 GDP growth projected below 2.0% due to high prices, elevated interest rates, and impending elections contributing to volatility.
- Although a couple of rate cuts may occur, consumer spending is unlikely to rebound quickly, indicating a challenging environment for businesses.
Long-Term Economic Resilience and Growth (Beyond 2025):
- Despite short-term challenges, optimism remains for the US economy’s long-term fundamentals.
- GDP growth could potentially reach 3.5% by 2030 under an accelerated growth scenario, driven by domestic manufacturing, technological advancements, and effective policies.
Clean Energy Transition Challenges:
- The transition to clean energy in the US is complex but advancing, with automotive companies forming agreements with recycling companies.
- More local mining projects and collaboration with Europe will be essential for achieving clean energy goals.
Strategies for Managing Critical Raw Materials:
- Promoting onshore production, enhancing resource efficiency, fostering innovation, expanding recycling capabilities, and strengthening international cooperation are key strategies for sustainable and secure supply chains.
Semiconductor Growth Dynamics:
- Mixed performance is expected across semiconductor product segments, with robust growth in memory and computing products but slower growth in power semiconductors, analog, and consumer electronics.
- Overall, cautious optimism exists for net positive industry growth.
Geopolitical and Strategic Considerations:
- Geopolitics significantly influence the semiconductor market, with the US focusing on technological leadership in semiconductor design and equipment.
- Challenges remain in advanced chip manufacturing technologies dominated by companies like ASML Holding and Taiwan Semiconductor Manufacturing Company Limited (TSMC).
- Initiatives like re-shoring and strategic partnerships with allied countries aim to enhance supply chain resilience amid geopolitical tensions with China.
Impact of US Sanctions on China on the US Semiconductor Market:
- The significant loss of opportunity in the Chinese semiconductor market due to US sanctions may affect long-term economic resilience for the US economy.
- In the short-term, US allies and companies may sustain investments in re-shoring, but to ensure long-term economic resilience, a stand-off with China may not be viable.
How is your organization preparing for the impacts of US fiscal support on the growth of key industries such as semiconductors, clean energy, infrastructure, and electric vehicles (EVs)?
Frost & Sullivan’s latest analysis, “United States Macroeconomic Growth Opportunities, 2024–2030,” provides a comprehensive in-depth assessment of the United States from economic, social, and political perspectives. This also includes GDP forecasts based on scenario analysis, where we assume that increased labor productivity and optimal policy efficacy are the top two drivers of accelerated growth relative to the baseline. Click here to access the analysis.
“Diversification of supply is crucial in the critical raw materials space. Projects in the US and Europe indicate a trend towards sourcing domestically by re-opening old mines or extracting resources from mine tailings and geothermal reserves.”
Leonardo Sampieri
Growth Expert & Industry Analyst
Frost & Sullivan
