Shortage of skilled labor, inflation deemed biggest problems plaguing economy

ISTANBUL

The global business world considers the shortage of skilled labor and inflation to be the biggest problems for businesses, according to the results of a recent survey.

The “Chamber Pulse: Global Markets, Local Landscapes 2024” survey, released by the International Chamber of Commerce (ICC) World Chambers Foundation (WCC) on Tuesday, compiled responses from representatives of 96 countries that account for 90% of the global gross domestic product (GDP) to identify the main constraints on businesses and the issues curbing economic growth.

The results of this survey were showcased at the WCF Europe and Asia Summit, held in Istanbul on Wednesday and Thursday, hosted by the Turkish Union of Chambers and Commodity Exchanges (TOBB) with the participation of around 800 businesspeople from 62 countries.

71% expect moderate price increases, 66% see AI as a threat

According to the findings, 71% of the global business community expects prices to increase moderately over the next 12 months. Meanwhile, 14% expect prices to rise more rapidly, 13% believe price hikes will remain the same, and a mere 3% think prices will decline moderately.

In terms of regions, North America’s most noted constraints are “inflation, shortage of skilled labor, taxation, financial problems, and unclear or unstable domestic politics.”

Meanwhile, the biggest hurdles to growth in Europe and Central Asia, in addition to the shortage of skilled labor, are “geopolitical tensions, inflation, taxation, and unclear or unstable domestic politics.”

Geopolitical tensions, inflation dominate regional business concerns

A similar trend is observed in the Middle East and North Africa region, though geopolitical tensions, with a 62% prominence in responses, rank much higher, along with financial problems.

The situation in East Asia and the Pacific mirrors that of the Middle East and North Africa, except for inflation, which ranks significantly higher at 75% compared to 37%.

At the same time, Latin America and the Caribbean suffer from insecurity and exchange rate constraints, in addition to the usual challenges: “unclear or unstable domestic politics, financial problems, and taxation.”

Sub-Saharan Africa’s main issues include “taxation, financial problems, competitive imports, inflation, and exchange rate,” while South Asia faces challenges from the “lack of new technological developments and insecurity,” alongside issues related to domestic politics, financial problems, and taxation.

The survey highlights that artificial intelligence (AI) is viewed as “both a risk and an opportunity” for businesses, with 66% perceiving it as a risk and 23% seeing it as an opportunity.

Meanwhile, economic uncertainty stands out as a major concern for both developing and underdeveloped nations when it comes to financial inclusion. Access to credit, hindered by inflation, is a widespread problem across almost all regions.

In terms of responses from chamber of commerce representatives, the survey found that the general outlook is positive.

Approximately 50% of chamber respondents said they expect their sales revenues to increase within a year, while 30% foresee no change.

The survey findings generally suggest that rapidly increasing inflation, driving up costs and disrupting supply chains, is the major factor affecting businesses globally.

*Writing by Emir Yildirim