A Real Economy publication

2023 energy industry outlook

Aug 11, 2023

Energy industry outlook: Key takeaways

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Tech infrastructure, data strategy are key in future of industrial automation.

Manufacturing building

Middle market organizations must understand changes in the energy landscape.

Middle market leaders need to understand the impacts of the energy crisis.

Energy sector trend #1: IoT risk management

Amid rising production costs and supply chain challenges, industrial organizations are driven to enhance efficiency and productivity through technology, particularly operational technology (OT) and industrial Internet of Things (IIoT) capabilities, which offer new opportunities but also pose risks. The remainder of 2023 and beyond will see enhanced data access and utilization playing a crucial role in achieving organizational success.

Energy sector trend #2: Growth in energy transition

For the first time, energy transition investment is on the brink of overtaking fossil fuel investment. Looking ahead to the next 12 months, rising energy demand, expanding policy aid and healthy balance sheets will incentivize the industry to continue aggressively investing in the energy transition. This shift will reshape the way organizations power their businesses.

Energy sector trend #3: Energy supply scramble

The prevailing economic conditions with sustained elevated commodity prices, geopolitical tensions, and increasing demand for energy indicate a prolonged period of higher energy prices. This energy landscape impacts manufacturers on multiple fronts, affecting strategies, margins, supply chains, and ESG considerations. Volatile energy prices disrupt manufacturing value chains, leading to increased costs, energy consumption, and transportation expenses. 

RSM contributors

Q3 2023 Middle Market Business Index (MMBI)

Middle market economic sentiment remains elevated as companies adjust to higher pricing levels

Key findings:

  • Seventy percent of those surveyed expect revenue to rise over the next six months.
  • Recession probability appears to be ebbing as organizations adjust to higher pricing levels.