Future of US markets -latest analysis – Q1 2024

 

The search results, the outlook for the US markets in 2024 is cautiously optimistic, with some potential challenges ahead: The US economy has shown resilience, with the labor market remaining strong and initial estimates for Q1 GDP growth expected to be solid.

However, there are signs of economic stress, such as rising credit card and auto loan default rates, as well as increasing commercial real estate delinquencies. This has created a dilemma for the S&P 500 gaining 25% in 2023Federal Reserve, as they try to balance fighting inflation while avoiding a recession.

The stock market has had a strong rally however, this has left stocks overvalued, and analysts believe 2024 is more likely to be an “average year for markets” rather than another double-digit winner.

Factors like high valuations, the potential for “sticky” inflation, and the Fed’s policy decisions could create risks for the market. Analysts are projecting modest earnings and revenue growth for S&P 500 companies in Q1 2024, but there is uncertainty around the outlook for the rest of the year.

Some sectors, like communication services, are viewed more favorably by analysts than others. Overall  a cautiously optimistic outlook for US markets in 2024, with the potential for volatility and challenges ahead as the economy and markets navigate the current environment.

 

US Real Estate Market

Home Prices

• Home prices are expected to continue rising, but at a slower pace than recent years. Estimates range from 1.4% annual growth (National Association of Realtors) to 4.1% (Mortgage Bankers Association).
• Price growth will vary significantly by region, with some markets like the Midwest and Northeast seeing double-digit gains, while others like Austin, St. Louis, and parts of Florida may see price declines.

Mortgage Rates

• Mortgage rates are predicted to decline from their 2023 peaks, with forecasts putting the 30-year fixed rate in the 6-7% range by the spring home buying season.
• The gradual decline in rates, combined with a small dip in home prices, should improve affordability compared to 2023.

Home Sales

• Home sales are expected to increase modestly in 2024, with the National Association of Realtors forecasting a 13% rise in existing-home sales
• However, inventory will likely remain constrained, keeping the market tilted in favor of sellers overall.24

Overall Outlook

• The 2024 housing market is expected to be challenging but improving compared to 2023, with affordability concerns still a major factor for many buyers.
• Regional variations will be significant, with some markets faring better than others based on factors like inventory levels, price trends, and mortgage rate changes.

Here are the key insights about the current state and outlook for the US rental market, both for personal and commercial properties:

 

US Rental Market

Residential Rental Market

• Rent price growth has slowed from the rapid increases seen during the pandemic, but rents are still up 3.5% year-over-year as of February 2024.
• Rental affordability remains a challenge, with the average renter needing to make $78,379 per year to afford the typical rent.2 Some of the least affordable markets are Miami, New York, and Los Angeles.
• However, there are signs of improvement, with rents declining or seeing very small increases in some major markets like Austin, San Antonio, and Portland.
• Multifamily rental inventory has been expanding, helping to ease some of the supply constraints, though single-family rental prices are still outpacing multifamily.2
• Rent control policies remain a controversial topic, with 37 states prohibiting rent control outright, while 182 cities and municipalities have some form of rent regulation.

Commercial Rental Market

• Commercial real estate prices have seen modest growth, rising 1.4% annually from 2019 to 2020.4
• However, the pandemic led to an increase in missed, late, or partial rent payments, with 54% of respondents reporting such issues.4
• Key commercial markets like New York City continue to have the most expensive retail rents globally.4
• Commercial construction activity has fluctuated, with $8.12 billion in the first half of 2019, compared to $6.2 billion in the first half of 2018.
• Overall, the commercial rental market appears to be normalizing after the disruptions of the pandemic, but faces ongoing challenges around occupancy and affordability in some sectors and regions.

In summary, the US rental market is showing signs of moderation from the rapid price growth of recent years, but affordability and supply constraints remain issues for both residential and commercial properties in many markets.

Global Infrastructure market:

Market Size and Growth

• The global Infrastructure Sector Market is expected to reach $2.72 trillion in 2024 and grow at a CAGR of 6.27% to reach $3.69 trillion by 2029.
• The Infrastructure Construction Market specifically was $4.4 trillion in 2022 and is forecast to grow at an AAGR of over 6% between 2023-2027.

Key Sectors

The infrastructure market is segmented into the following major sectors:

• Social Infrastructure (schools, hospitals, defense, etc.)
• Transportation Infrastructure (railways, roadways, airports, ports, etc.)
• Extraction Infrastructure (oil & gas, mining, etc.)
• Utilities Infrastructure (power, water, telecoms, etc.)
• Manufacturing Infrastructure (industrial parks, etc.)

Key Regions

The major regional markets for infrastructure are:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa

Key Players

Some of the major companies operating in the infrastructure sector include:

• ACS Group
• VINCI
• China State Construction Engineering Corporation
• Skanska
• Larsen & Toubro

Trends and Challenges

Key trends and challenges facing the infrastructure market include:

• Increasing investment requirements, especially in power grids and renewable energy
• Sustainability and environmental concerns driving infrastructure decisions
• Digitalization and technological advancements transforming the industry
• Supply chain disruptions and inflation impacting costs and timelines

Overall, the infrastructure market is expected to see robust growth globally, driven by continued investment in critical sectors like transportation, utilities, and social infrastructure, particularly in developing regions.

 

US Infrastructure Market 

Market Size and Growth

• The global Infrastructure Sector Market is expected to reach $2.72 trillion in 2024 and grow at a CAGR of 6.27% to reach $3.69 trillion by 2029.3
• The Infrastructure Construction Market specifically was $4.4 trillion in 2022 and is forecast to grow at an AAGR of over 6% between 2023-2027.

Key Sectors

The major infrastructure sectors include:

• Social Infrastructure (schools, hospitals, defense, etc.)
• Transportation Infrastructure (railways, roadways, airports, ports, etc.)
• Extraction Infrastructure (oil & gas, mining, etc.)
• Utilities Infrastructure (power, water, telecoms, etc.)
• Manufacturing Infrastructure (industrial parks, etc.)

Key Regions

The major regional markets for infrastructure are:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa

Key Trends and Challenges

• Increasing investment requirements, especially in power grids and renewable energy
• Sustainability and environmental concerns driving infrastructure decisions
• Digitalization and technological advancements transforming the industry
• Supply chain disruptions and inflation impacting costs and timelines
• Tight labor market and shortage of skilled workers
• Declining state and local government revenues limiting funding capacity
• Rising interest rates making debt financing more expensive

Key Players

Some of the major companies operating in the US infrastructure sector include:

• ACS Group
• VINCI
• China State Construction Engineering Corporation
• Skanska
• Larsen & Toubro

Overall, the US infrastructure market is expected to see robust growth, driven by continued investment in critical sectors like transportation, utilities, and social infrastructure. However, the industry faces a range of economic and operational challenges that will require strategic planning and execution to address.

 

US food market:

Market Size and Growth

• The US food market is projected to grow by 3.81% from 2024-2028, reaching a market volume of $1.17 trillion by 2028.
• The US packaged food market was estimated at $1.04 trillion in 2021 and is expected to reach $1.08 trillion in 2022.

Key Segments

• The food market is segmented into various categories including:

• • Beverages (17% market share) – includes carbonated soft drinks, fruit beverages, bottled water, etc.
  • Bakery and confectionery
  • Dairy products
  • Snacks and nutritional bars

• The supermarket/hypermarket channel dominates the packaged food market, accounting for over 68% of sales.
• The online/e-commerce channel is the fastest growing, expected to see a CAGR of 9.1% from 2022-2028.

Key Trends and Drivers

• Rising demand for healthy, natural, and functional food products
• Increasing preference for convenience and on-the-go options
• Expansion of e-commerce and online grocery shopping
• Product innovation and launch of new flavors/formulations
• Mergers and acquisitions among major grocery retailers

Key Players

Some of the major players in the US food market include:

• Nestlé
• The Coca-Cola Company
• PepsiCo
• Tyson Foods
• Mars
• Cargill
• The Kraft Heinz Company
• General Mills
• Conagra Brands
• Kellogg Co.

Overall, the US food market is a large and growing industry, driven by evolving consumer preferences, the rise of e-commerce, and continued product innovation across key segments like beverages, bakery, and snacks.

 

US Freight Market

Sea Freight Market

• The US West Coast ports are experiencing severe congestion, with 24 container ships currently at anchor waiting for berths in Los Angeles/Long Beach.
• Berth congestion is worsening, with ships waiting up to 7 shifts at anchorage.
• Blank sailings are continuing, primarily for schedule recovery purposes due to port congestion and delays.
• Standard container rates on transpacific routes are quadruple what they were a year ago, before equipment surcharges and premiums.
• The supply-demand balance remains strong, and capacity is not expected to increase much on these trade routes.

Air Freight Market

• Air cargo volumes on the major apparel route from Vietnam to Europe spiked 62% in the week ending January 14, 2024.
• This sharp rise in air freight demand is driven by companies trying to mitigate the delays and diversions caused by the Houthi rebel attacks in the Red Sea.
• Air freight rates have not risen as sharply as volumes yet, but they are likely to increase significantly if the Red Sea crisis continues.
• Flights are already 93% full from a cargo perspective, and further rate increases of more than 10% are possible.
• The air freight market is becoming more volatile as hopes fade for the return of belly hold capacity from passenger flights.

Overall Trends

• The supply chain disruptions and delays, particularly in the sea freight market, are driving a shift towards increased use of air freight to move time-sensitive cargo.
• This sudden spike in air freight demand is creating concerns about potential supply chain inflation and rate increases, similar to the pandemic period.
• Companies across various industries, including apparel, automotive, and home goods, are being impacted by the shipping challenges and are exploring alternative transportation options.

In summary, the US shipping market is facing significant congestion and delays in the sea freight segment, leading to a surge in air freight demand as companies seek to mitigate the impact on their supply chains.

 

The US fashion market:

Market Size and Growth

• The US fashion eCommerce market is predicted to reach $225,648 million by 2024, accounting for 21.2% of the total US eCommerce market.
• The US fast fashion market is expected to grow at a CAGR of 5.5%, reaching $59.85 billion by 2030.
• The overall US apparel market was estimated at $556.1 billion in 2022, with growth expected to slow in 2023 due to inflation.

Key Segments

• The fashion market is segmented into clothing, footwear, and accessories.3
• Within clothing, menswear is expected to outperform womenswear and childrenswear in the coming years.3
• The clothing, footwear, and accessories specialists channel dominates the US apparel market.3

Key Trends

• The rise of online/ecommerce channels, accelerated by the pandemic, is a major driver of growth.2
• Consumers are demanding more sustainable and ethically produced fashion options.2
• Fast fashion brands are focusing on quick response to trends and offering affordable, trendy clothing.2
• Resale and secondhand clothing is gaining popularity, with nearly a third of US consumers buying secondhand in 2022.

Key Players

• Major players in the US fashion market include Nike, Adidas, Shein, Old Navy, Target, and Lululemon.3
• Fast fashion brands like River Island, Mango, Bershka, Missguided, and Fashion Nova are also key players.2

Overall, the US fashion market remains a large and dynamic industry, with ecommerce, fast fashion, and sustainability emerging as key trends shaping the market’s future growth and evolution.

US Food Chain Market

Market Overview

• The US food industry boasts a large and impressive array of major food chains that have become household names across the nation.1
• These food chains have managed to establish themselves as dominant players in the market due to their widespread presence, consistent quality, and effective branding strategies.1

Top Food Chains

Some of the largest and most prominent food chains in the US include:

• McDonald’s
• Starbucks
• Subway
• Taco Bell
• Burger King

Key Characteristics

• These food chains cater to diverse consumer tastes and preferences, offering a wide range of menu options from fast-food classics to healthier alternatives.
• Their extensive networks of locations across the country allow them to reach customers in various regions, ensuring convenience and accessibility.
• The food chains have invested heavily in marketing and advertising to build strong brand identities that resonate with consumers.

Market Dominance

• The success of these large food chains can be attributed to their ability to meet consumer demands, adapt to changing trends, and provide a consistent dining experience.1
• Their continued growth and expansion highlights their significant influence and position as key players in the overall US food industry.

In summary, the US food chain market is dominated by a handful of major players that have become ubiquitous nationwide through their scale, branding, and ability to cater to evolving consumer preferences.

US Defense Market:

Market Size and Growth

• The US defense market size is estimated at $309.77 billion in 2024 and is expected to reach $367.30 billion by 2029, growing at a CAGR of 3.58% during this period.
• This growth is driven by factors like geopolitical tensions, technological advancements, and strategic military modernization.

Key Segments

The US defense market is segmented into the following major categories:

• Armed Forces (Army, Navy, Air Force)
• Product Types (Fixed-wing Aircraft, Rotorcraft, Ground Vehicles, Naval Vessels, C4ISR, Weapons and Ammunition, Protection and Training Equipment, Unmanned Systems)

Key Trends and Drivers

• Increasing focus on cyber defense solutions and AI integration to boost ISR (Intelligence, Surveillance, and Reconnaissance) missions
• Surge in advanced defense equipment production, alongside sustainable military practices
• Favorable government incentives and programs supporting the market’s growth

Key Players

Some of the major players in the US defense market include:

• Lockheed Martin Corporation
• The Boeing Company
• RTX Corporation
• General Dynamics Corporation
• Northrop Grumman Corporation
• L3Harris Technologies Inc.
• BAE Systems PLC

Defense Innovation Marketplace

The Defense Innovation Marketplace is a centralized resource for the Department of Defense’s Acquisition and Science and Technology professionals to connect with industry, small businesses, and other organizations for research and development opportunities.3Overall, the US defense market is on an upward trajectory, driven by various factors and supported by a robust competitive landscape of major players and government initiatives to foster innovation and modernization.

US government job market:

Market Size and Growth

• The federal government employs over 2% of the total national workforce in the US, both domestically and overseas.
• The federal government recruits several hundred thousand new hires annually, making it a significant employer.
• Wage and salary employment in the federal government is projected to increase incrementally in the coming years.

Key Trends and Drivers

• Demand will be especially strong for specialized workers in areas like public health, information security, scientific research, law enforcement, and financial services.
• As the population ages, there will be increased demand for healthcare workers like registered nurses and physicians in federal hospitals and facilities.
• Cybersecurity is an increasingly important aspect of national defense, driving rapid growth in IT specialist roles like computer and information research scientists.
• Increased scrutiny of financial and business transactions will lead to more compliance officers, claims adjusters, and investigators being hired.
• Population growth and national security priorities will drive demand for more law enforcement officers like detectives and criminal investigators.

Job Prospects

• Job prospects in the federal government are expected to vary by occupation, with favorable prospects in occupations facing high retirement rates.
• However, jobseekers may face competition for positions in occupations with fewer retirements or popular jobs that attract many applicants.
• Competition for federal positions can increase during times of economic uncertainty, as workers seek the stability of government employment.

Overall, the US government job market is expected to see steady, if modest, growth in the coming years, with strong demand in specialized fields like healthcare, cybersecurity, and law enforcement.