Economic Growth Metrics

Capital on the Move: From London to Southern Europe We’re witnessing one of the most important capital shifts in recent memory: money is moving out of the U.K. property market and flowing into Spain, Portugal, Dubai, and Cyprus. Why? In Prime Central London, prices are not just soft—they’re down as much as 40% if you hit the bid. Liquidity has vanished. Mortgages are resetting higher, owners face a liquidity crisis, and foreclosure pipelines are quietly building. The market feels stuck: sellers anchored to yesterday’s valuations, buyers demanding deep discounts, and the debt layer tightening with every passing quarter. Meanwhile, international capital is hunting for yield, lifestyle, and resilience. Across southern Europe and the Gulf, assets are cheaper, financing often more flexible, and the long-term structural demand story is intact—especially when compared to a U.K. market frozen by tax policy, political risk, and affordability collapse. But not every sector is worth chasing. The ultra-prime is overbought, the speculative holiday home markets over-supplied. The only part of the market that offers sensible, scalable opportunity is the squeezed middle: • People who don’t qualify for social housing, • Can’t afford prime or luxury, • Yet need good quality rental and ownership options. This middle segment is underbuilt in every market—from London to Lisbon to Limassol. It’s where demand is permanent, and where institutional capital can find sustainable strategies rather than speculative trades. Capital is flowing. The question is whether investors will chase the headlines—or build in the middle, where the long-term value truly lies. #CapitalFlows #RealEstateInvestment #UKProperty #SouthernEurope #SpainProperty #PortugalProperty #DubaiRealEstate #CyprusProperty #HousingCrisis #SqueezedMiddle #InstitutionalCapital #PropertyInvestment

Where is money flowing in India? Is the trend about to reverse? 2025 has been a reality check for investors. After blockbuster returns in previous years, equity mutual funds have delivered just 4–6% average returns in the last 12 months; several categories even posted negative 1-year rolling returns for the first time since 2018. Small-cap and mid-cap schemes, once the hot favourites, have seen a sharp drop in inflows. What’s happening behind the numbers? 1. Caution is back: Equity fund inflows dipped 9% in September alone, and investor appetite for lump-sum bets is down. 2. Institutions rotate and diversify: While retail investors are pausing, institutions (MFs, FIIs, FPIs) have shifted assets into debt, gold, and new NFOs. Foreign investors pulled out ~$17B from India this year. 3. Sector rotation in play: Banking, auto, and silver ETFs outperformed equities, and new flows are concentrated in niche sector/thematic products, crowding risk is rising, with 25% of all inflows in just six stocks. Are we about to see a reversal? a. Mean reversion likely: Analysts expect large-cap earnings recovery and moderation in valuations could set up a better 2026, with 5–10% upgrades to FY27 earnings estimates. b. Selective alpha: With markets rangebound, stock-picking and sector allocation matter more than ever. Only 35% of stocks are above their peak 2024 levels; being selective will drive results. c. Broader asset flow: Gold, silver, and some debt funds have outpaced equity. Passive funds (ETF index, sectoral) continue to gain traction, but broad participation remains subdued. After a flat year for equities, flows into risk assets are slowing and reallocating; caution, discipline, and selectivity are trending. What’s your view? Are you sticking with equities or diversifying for 2026?

The US is getting for less GDP for each dollar borrowed. I saw this unassuming graph from BofA on my LinkedIn feed last week. I re-ran the data, but with quarterly numbers. It depicts a six-decade journey of the US economy, but unlike the upward trajectories that are often posted, this one slopes downward and dramatically so. There is an unsettling message here: the bang for each borrowed buck is dwindling and fast. It is a clear visual representation of America's fiscal challenge. The borrowed dollar is not as potent as before. The diminishing returns on national debt should be cause for concern. Once a potent catalyst for growth, with each borrowed dollar in the 1960s generating over $6 in GDP, US debt's efficacy has waned dramatically. Today, that same dollar yields a mere $0.58 in economic expansion. Surely this questions the sustainability of the US fiscal trajectory. The country has accumulated debt at a breakneck pace – roughly $1 trillion every 100 days – the burden of interest payments looms large, threatening to eclipse even defence spending. Somehow the US government will need to create a path that enhances productivity and leverages debt more judiciously. If it fails, the country might find itself trapped in a cycle of borrowing with ever-diminishing returns. Any thoughts here? #macroeconomics #USdebt

India budget preview FY27 • FY26 was driven by both fiscal and monetary stimulus when external headwinds had been mounting. On the fiscal front, both income and GST stimulus totaled 0.9% of GDP • This has had an impact on tax collections even as private demand has picked up. Hence, to achieve fiscal deficit of 4.4% in FY26, cutback on spending is inevitable to meet fiscal target • On a low base and rising demand, revenue collection outlook for FY27 is much more buoyant when non-tax revenues are expected to remain elevated. This gives government room to keep capex at 3.1% of GDP while continuing on the path of consolidation • The focus of the Budget should be on Ease of Doing Business and Deregulation (aligning customs) along with incentives to crowd-in private investment, in particular manufacturing • With change in anchor to debt to GDP, pace of fiscal consolidation is expected to be much more gradual. From 56.2% of GDP in Mar 2026, debt is projected at 50% (+/-1%) in Mar 2031 • This implies a fiscal deficit of 4.2% of GDP in FY27 which can potentially compress to 3.5% of GDP for achieving debt to GDP of ~50% by Mar 2031 (nominal growth of 10%) • However, rising repayments going forward (INR 5.4tn in FY27) would put upward pressure on gross borrowing (INR 16.5tn in FY27) and thus yields unless net borrowing (INR 11.6tn in FY27) is brought down or switches are conducted to change the duration of outstanding debt

Forget the tired "manufacturing is dying" narrative. Advanced manufacturing — Chemicals (NAICS 325), Machinery (333), Computer & electronic products (334), and Transportation equipment (336), where 41% of workers hold a bachelor's degree or higher — is ripping higher, with the index up nearly 4 points in just the last 12 months, more than the entire gain of the prior decade combined. These four subsectors are 44% of manufacturing value added and explain essentially all of the net growth the sector has produced since 2022. The rest of manufacturing — where only 24% of workers hold a bachelor's — tells the opposite story: down 6% over the decade and still falling. Two manufacturing economies, moving in opposite directions, and the gap is widening fast. Methodology. Monthly seasonally-adjusted industrial production indexes come from the Fed. The two aggregate lines are Törnqvist chain indexes built directly from the Fed's published Relative Importance Weights, so "Advanced" and "Rest" recombine to the Fed's own total manufacturing IP up to rounding. Both are rebased to Jan 2016 = 100 and shown as trailing 12-month moving averages. What's driving the boom. This is what industrial policy plus a capex supercycle looks like when they hit the same industries at the same time. CHIPS, IRA, and the Infrastructure Act directed hundreds of billions into semiconductors, batteries, clean energy capital equipment, pharmaceuticals, and defense. Then the AI capex boom landed on top, pulling massive demand for semiconductors, electrical equipment, and power gear. Rising defense budgets are layering in aerospace demand. The future of American manufacturing is being built by the high-IP, high-skill end of the sector, and the gap with everything else is only going to keep widening. #manufacturing #AI

According to the Manufacturing ISM Report on Business, the overall economy continued in contraction for a third month after one month of weak expansion preceded by nine months of contraction and a 30-month period of expansion before that. 𝐃𝐞𝐜𝐞𝐦𝐛𝐞𝐫 𝐃𝐚𝐭𝐚: • 𝐌𝐚𝐧𝐮𝐟𝐚𝐜𝐭𝐮𝐫𝐢𝐧𝐠 𝐏𝐌𝐈®: Rose slightly to 47.4% from November's 46.7%, indicating ongoing economic contraction. • 𝐍𝐞𝐰 𝐎𝐫𝐝𝐞𝐫𝐬 & 𝐏𝐫𝐨𝐝𝐮𝐜𝐭𝐢𝐨𝐧: New Orders continued to shrink, while Production showed a slight increase. • 𝐄𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭 & 𝐏𝐫𝐢𝐜𝐞𝐬: Employment index improved, but the Prices Index fell, suggesting lower energy market prices. • 𝐒𝐮𝐩𝐩𝐥𝐢𝐞𝐫 𝐃𝐞𝐥𝐢𝐯𝐞𝐫𝐢𝐞𝐬 & 𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐢𝐞𝐬: Faster deliveries and decreasing inventories, hinting at readiness for future demand. • 𝐄𝐱𝐩𝐨𝐫𝐭𝐬 & 𝐈𝐦𝐩𝐨𝐫𝐭𝐬: Exports remained nearly flat, and imports continued their contraction. • 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞: Primary Metals was the only industry reporting growth; significant contractions were observed in key sectors like Machinery and Petroleum & Coal Products. 𝐄𝐦𝐞𝐫𝐠𝐢𝐧𝐠 𝐓𝐫𝐞𝐧𝐝𝐬: • 𝐒𝐭𝐚𝐛𝐢𝐥𝐢𝐳𝐢𝐧𝐠 𝐏𝐫𝐨𝐝𝐮𝐜𝐭𝐢𝐨𝐧: Despite overall contraction, there are signs of stabilization in production and employment. • 𝐀𝐝𝐣𝐮𝐬𝐭𝐢𝐧𝐠 𝐎𝐮𝐭𝐩𝐮𝐭𝐬: Companies are effectively managing outputs in response to fluctuating demand. • 𝐂𝐚𝐩𝐚𝐜𝐢𝐭𝐲 𝐟𝐨𝐫 𝐆𝐫𝐨𝐰𝐭𝐡: The industry shows readiness to accommodate future demand growth. • 𝐒𝐞𝐜𝐭𝐨𝐫𝐚𝐥 𝐒𝐡𝐢𝐟𝐭𝐬: The report indicates a shift in sector performances, with some industries like Primary Metals showing resilience. • 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐈𝐧𝐝𝐢𝐜𝐚𝐭𝐨𝐫𝐬: The data suggest cautious optimism for future economic activity, with decreasing supplier lead times and price adjustments.   𝐖𝐡𝐞𝐫𝐞 𝐚𝐫𝐞 𝐌𝐚𝐧𝐮𝐟𝐚𝐜𝐭𝐮𝐫𝐞𝐫𝐬 𝐞𝐱𝐩𝐞𝐫𝐢𝐞𝐧𝐜𝐢𝐧𝐠 𝐭𝐡𝐞 𝐡𝐢𝐠𝐡𝐞𝐬𝐭 𝐑𝐎𝐈 𝐨𝐧 𝐭𝐞𝐜𝐡 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭? Rockwell Automation’s 8th Annual State of Smart Manufacturing Report identified the top areas where technology has had the biggest ROI over the past 12 months.  This was then compared to the most popular technology investments.  𝐏𝐫𝐨𝐜𝐞𝐬𝐬 𝐀𝐮𝐭𝐨𝐦𝐚𝐭𝐢𝐨𝐧 comes out ahead with the most respondents indicating the biggest ROI. What other areas do you see as quick wins with high ROI? 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐒𝐭𝐚𝐭𝐢𝐬𝐭𝐢𝐜𝐬: https://lnkd.in/eeEDg7BY 𝐑𝐨𝐜𝐤𝐰𝐞𝐥𝐥 𝐑𝐞𝐩𝐨𝐫𝐭: https://lnkd.in/eWYPHinJ ******************************************** • Follow #JeffWinterInsights to stay current on Industry 4.0 and other cool tech trends • Ring the 🔔 for notifications!

Despite claims that the freight recession is over, those of you who follow the public less-than-truckload (LTL) carriers note that most LTL outfits have been reporting declining year-over-year volumes for October and November (e.g., https://lnkd.in/gJ9Cf-VF). Continued soft volumes in the LTL space stem mostly from ongoing weakness in the industrial economy (e.g., manufacturing). In that regard, I wanted to share one industrial production series, focusing specifically on production of goods made by machine shops, turned products, and screws/nuts/bolts (https://lnkd.in/gnYJjMD8) that does a good job of capturing inflections in freight market cycles. One chart. Thoughts: •These industrial production data show seasonally adjusted physical unit output for this 4-digit industry. Crucially, the BEA estimates only 15% of the consumption of goods belonging to this industry are imported, suggesting an ongoing important role for domestic manufacturing (accounting for ~$70 billion in shipments each year: https://lnkd.in/g4tp2fr8). •As can be seen, during normal freight cycles, upticks of production in this sector correspond quite closely to the onset of bull market pricing cycles in late 2013/early 2014 and mid-2017. Equally, downturns in production correspond to bearish conditions. •The fact production didn’t start dropping till late Q3 2023 (about a year after the freight recession started) can be easily explained by the rampant raw material and labor shortages in 2021 and 2022 creating very large increases in order backlogs (https://lnkd.in/gB4iMH2j) that supported production even after new orders had cooled down. Implication: production by machine shops in the USA merits close monitoring as we move into 2025. An uptick of production would be another indicator that we are exiting the current limbo of flat freight volumes. As it appears this series has finally found its nadir, it will likely take a few more months for production to rise significantly (e.g., late Q1 2025). #supplychain #supplychainmanagement #freight #trucking #manufacturing 

Why Alternatives, and Why Now? Markets shift, cycles turn, and investors ask the same question: How will alternatives hold up when the tide changes? We’ve run the numbers, mapped out the scenarios, and here’s the takeaway: Alternatives remain relevant across bull, bear, and base cases—but how you allocate matters. 🔴 Bear Case: Market Disruption Recession, geopolitical risk, and tighter liquidity? Equity markets struggle, defaults rise, and risk tolerance fades. • Private Equity: Distressed buyouts gain traction as secondary markets pick up bargains. • Macro Hedge Funds: A bright spot—volatility creates opportunities in FX and rates. • Private Credit: Defaults climb, but high-quality credit holds steady. • Infrastructure: Defensive assets like utilities and essential services remain resilient. ⚪ Base Case: Stabilization & Modest Growth Rates stabilize, inflation stays in check, and markets tread water. • Private Equity: Mid-market buyouts and secondaries thrive, while defensive sectors like healthcare attract capital. • Macro Hedge Funds: Systematic strategies benefit from macro trends. • Private Credit: Direct lending remains a steady performer. • Infrastructure: ESG and sustainability-linked projects attract capital. 🔵 Bull Case: Accelerated Growth Global expansion, rate cuts, and rising optimism fuel risk-taking. • Private Equity: Tech, AI, and healthcare see surging valuations. • Macro Hedge Funds: Trend-following strategies ride the market wave. • Private Credit: Yield-seeking investors move into structured financing. • Infrastructure: Capital floods into renewable energy and transport projects. My Take? The case for alternatives isn’t binary—it’s about resilience, flexibility, and knowing where to lean in. When equity beta wobbles, alternatives offer a playbook for every market regime. As Howard Marks put it: “You can’t predict. You can prepare.” Are you positioned for what’s next? #Investing #Alternatives #Markets #PrivateEquity #MacroHedgeFunds #PrivateCredit #Infrastructure

𝐌𝐨𝐧𝐞𝐲 𝐢𝐬 𝐜𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐢𝐭𝐬 𝐚𝐝𝐝𝐫𝐞𝐬𝐬. Not where it invests- where it lives. Over the past year, 𝐃𝐮𝐛𝐚𝐢 𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐂𝐞𝐧𝐭𝐫𝐞 reported nearly  𝟒𝟎% 𝐠𝐫𝐨𝐰𝐭𝐡 𝐢𝐧 𝐧𝐞𝐰 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 𝐫𝐞𝐠𝐢𝐬𝐭𝐫𝐚𝐭𝐢𝐨𝐧𝐬, crossing 𝟓,𝟓𝟎𝟎+ 𝐚𝐜𝐭𝐢𝐯𝐞 𝐟𝐢𝐫𝐦𝐬, including hedge funds, PE players, and family offices. This isn’t incremental inflow. It’s relocation. For decades, capital stayed anchored in 𝐍𝐞𝐰 𝐘𝐨𝐫𝐤, 𝐋𝐨𝐧𝐝𝐨𝐧, 𝐇𝐨𝐧𝐠 𝐊𝐨𝐧𝐠. It travelled globally, but its base didn’t change. Today, that anchor is shifting. 𝐓𝐡𝐞 𝐔𝐀𝐄 is not just attracting capital - it is attracting 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐨𝐫𝐬. That distinction is structural. Because when the decision-makers move, capital follows by default. And the drivers are clear: –Zero/low tax environments –Faster regulatory approvals (often weeks, not months) –Strategic access across 𝟑 𝐜𝐨𝐧𝐭𝐢𝐧𝐞𝐧𝐭𝐬 𝐟𝐫𝐨𝐦 𝐚 𝐬𝐢𝐧𝐠𝐥𝐞 𝐛𝐚𝐬𝐞 But the deeper shift is this: Where capital sits now determines how it moves later. In a fragmented global environment - tightening regulations in the West, uncertainty in Asia - capital is optimising for flexibility, neutrality, and speed. That’s jurisdiction arbitrage at scale. And it changes how investors and founders should think about positioning: –Capital is no longer just something you raise - it’s something you locate –Geography isn’t fading in importance - it’s becoming a competitive edge –Access to capital is shifting toward access to 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 𝐞𝐜𝐨𝐬𝐲𝐬𝐭𝐞𝐦𝐬 Which makes this less about markets- and more about control. Because the advantage today is not just deploying capital well - it’s being close to where capital decisions are made. So the real question is: Are you building where opportunity exists… or where capital is choosing to base itself? #UAE #GlobalCapital #PrivateMarkets #CapitalAllocation #Geopolitics #InvestorStrategy

Stunning figure from a new paper by Jonathan Berk and Jules van Binsbergen showing that, while government debt-to-GDP ratios are on a clear upward trend and reaching historically high levels (top figure), other plausible indicators of government indebtedness paint a very different picture (bottom figure): 🔹interest expense-to-GDP ratio (orange) 🔹debt-to-equity ratio (blue) Data are from 19 large countries: Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, France, Germany, Greece, Italy, Japan, Mexico, Netherlands, Russia, Spain, Sweden, United Kingdom, and the United States. Read the full paper here: Jonathan B. Berk and Jules H. van Binsbergen (2026), Why Care About Debt-to-GDP?, National Bureau of Economic Research Working Paper No. 34629: https://lnkd.in/euM5Xjca This is the Abstract: "We construct an international panel data set comprising three distinct yet plausible measures of government indebtedness: the debt-to-GDP, the interest-to-GDP, and the debt-to-equity ratios. Our analysis reveals that these measures yield differing conclusions about recent trends in government indebtedness. While the debt-to-GDP ratio has reached historically high levels, the other two indicators show either no clear trend or a declining pattern over recent decades. We argue for the development of stronger theoretical foundations for the measures employed in the literature, suggesting that, without such grounding, assertions about debt (un)sustainability may be premature."