The Commodities Boom Will Continue in 2023
Despite the economic slowdown, prices are expected to stay high for everything from oil to copper to wheat. Plus a selection of the writer’s favorite columns.
On the up and up.
Photographer: Newsday LLC/Newsday RMWhat to Expect in 2023:
The global economy is hard-pressed to satisfy its own commodity needs. Despite the past year of sky-high prices, the natural resources industry isn’t rushing to invest in more capacity to alleviate supply shortages. Without an investment boom, the only way to rebalance the market in the new year is through lowering demand.
Indeed, an economic slowdown is already on its way. The US Federal Reserve, the Bank of England and the European Central Bank are all firmly pushing the brakes via higher interest rates. The British economy is already in recession, and Europe is edging toward a cliff. The US is oscillating between a soft and a hard landing. But even if macroeconomic forces ease some commodity cost pressures, microeconomic factors, such as low inventories and limited spare capacity, will keep prices higher than during past recessions in 2023.