Mark Charlton, Head of Research & Forecasting at Colliers International, comments: “As we enter 2013 the general mood of investors is more risk-averse than it once was. A year ago, investors were more optimistic about the European economy and not so preoccupied with the American fiscal cliff. Yet, despite this mood swing, we believe that there is much to be positive about in the coming year. I have outlined our five key predictions for 2013 below”
1. ICEE Industries Will Drive First World Economic Growth
Intellectual Capital, Energy and Education (ICEE) industries will drive economic growth in the developed world. Technological growth will continue to lead FIRE (Finance, Insurance and Real Estate) demand in markets like Tel Aviv, Dublin and London.
2. Capital Will Seek Safety in London
EMEA investors will seek liquid and transparent markets with a quality stock of investment properties. Paris, Germany’s core cities and London in particular are seen as safe havens by these investors. As a result of London being outside the eurozone, it is especially attractive in these times of euro uncertainty. We believe that investors will be more willing to trade relative security for lower yields in 2013.
3. European Elections Will Not Threaten the Eurozone
While upcoming elections in Germany and Italy will prolong uncertainty and potentially introduce volatility in investment markets, they do not pose a true threat. Germany’s support of the eurozone will continue post-election. The risk that Italy’s April elections will fail to produce a government willing to continue on the reform path is also low.
4. Labour Disputes Will Cause Trade Disruptions
Disagreements between management and labour, for a variety of causes, will affect economic growth in the coming year. Europe can expect labour flare ups in struggling Spain and Greece. In France new austerity measures could also spark public sector strikes.
5. European Divergence: Euro Area Will See a Further North/South Split
Northern countries in the eurozone will continue to see stronger economic growth than their southern and peripheral counterparts, which will remain weak with local recessions. The eurozone as a whole will post marginal 0.25 per cent GDP growth in 2013, with business investment and occupier demand to gain traction in the second half of the year.
Please click here to see the full list of Global predictions for 2013.