The Real Economy: February 2024

The changing landscape of global trade: From offshoring to friendshoring

For decades, the patterns of international trade seemed to go in one direction, as goods were increasingly sourced in China and other low-cost producers. But then came the trade war starting in 2017, followed by the pandemic and, now, geopolitical tension.

In place of those patterns has come a new paradigm, as countries look to source their products in countries with friendlier trade policies or nations that are closer by. It’s called friendshoring, or nearshoring. But whatever the name, it marks a profound change for middle market businesses.

In the February issue of The Real Economy, RSM’s chief economist, Joseph Brusuelas, examines this changing landscape of trade and how it is affecting middle market businesses. A good example of the disruption to trade patterns is the attacks on Red Sea shipping, which are forcing many carriers to ship their goods around Africa, at higher cost. 

The global slowdown in trade was spurred in part by two years of monetary tightening, but there is more to the story with China, which is experiencing a realignment of the global supply chain.
Joe Brusuelas, Chief Economist

Also in this issue, Brusuelas offers his outlook for interest rates and the rising appetite for risk. Middle market businesses can look for rate cuts by midyear, he writes. Finally, RSM's Kendra Blacksher offers guidance for manufacturers as they seek to expand in an increasingly complex regulatory landscape.

We look at these topics and more in this issue of The Real Economy.

Inside the February issue

Industry Spotlight

Article
Manufacturers navigate tighter environmental regulation
Manufacturers navigate tighter environmental regulation, and those tapping tax credits must understand environmental requirements.

RSM contributors

The Real Economy Livestream series

Middle market outlook: Gearing up for 2024

Join RSM US Chief Economist Joe Brusuelas and U.S. Chamber of Commerce Executive Vice President Neil Bradley as they discuss the economic outlook and what middle market companies should anticipate in the coming months.

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Special report

2023 RSM US Middle Market Business Index Special Report: Funding

Rising real interest rates are pushing up the cost of commercial and industrial loans, making it harder for
middle market firms to meet payroll and finance their expansion, according to findings in the third-quarter
RSM US Middle Market Business Index survey.

Find out how businesses are coping with the higher cost of capital in our special report.

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Monthly economic analysis report for the US middle market

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The Real Economy Blog was developed to provide timely economic insights about the middle market economy. It is offered as a complement to RSM’s macroeconomic thought leadership, including The Real Economy monthly publication and the proprietary RSM US Middle Market Business Index (MMBI).

The voice of the middle market

Middle market organizations, which make up the “real economy,” are too big to be small and too small to be big. They have distinct challenges and opportunities around resources, labor, technology, innovation, regulation and more.