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Global Trade Undergoes a Strong, Yet Uneven, COVID Recovery

Source: World Trade Organization

Global merchandise trade volume is expected to grow 8% this year after declining 5.3% in 2020. However, by 2022, trade growth is expected to slow to 4.0%, according to the WTO, meaning “the effects of the pandemic will continue to be felt as this pace of expansion would still leave trade below its pre-pandemic trend.” 

The recovery of global trade has been strong — but uneven. In the second half of 2020, trade in electronics grew 12% from the demand of remote workers. Textile trade also grew, matching the need for medical masks. Travel and transport services, however, dropped 63% and 19%, respectively, due to travel restrictions. Trade in fuel and mining products was also low at 19% in the fourth quarter of 2020.

Trade volume this year will ultimately depend on the production and distribution of vaccines. Delays in vaccine distribution or a resurgence of the virus could hinder trade growth by nearly 2 percentage points. But if COVID-19 is contained, trade could return to pre-pandemic levels by the end of 2021.

CEO Confidence at Highest Level Since 1976

Source: Conference Board

The level of CEO confidence rose to 82 points in Q2 of 2021 — a 9-point increase from Q1. This is the highest level recorded since 1976, when The Conference Board started measuring CEO confidence. 

In the second quarter, 88% of CEOs believed that economic conditions would improve over the next six months, while 94% of CEOs said that conditions are better compared to six months ago. CEOs are also more hopeful about the state of their own industries, with a 21% increase in optimism in Q2. Over half of CEOs expect to grow their workforce over the next year — up from 47% in Q1. 

The demand to hire has led to difficulty in finding qualified workers. “For CEOs, the challenge is no longer staying afloat, but keeping pace — in particular, with a likely resurgence of the labor shortages experienced before the pandemic,” said vice chairman Roger W. Ferguson, Jr. of The Conference Board. Vaccine distribution is pushing the U.S. economy to pre-pandemic levels, but for businesses to succeed, they will need to consider new workforce demands

COVID-19 Challenges Consumer Trust in the Financial Sector

Source: Morning Consult

The majority of U.S. adults surveyed are less likely to trust financial services companies now compared to a year ago, while 13% say they trust finance more. Finance ranked second among the industries for which consumers say trust is crucial, after health care companies, according to the Morning Consult. 

Within finance, investment and wealth management companies saw the largest decline, with a 7-point drop in net trust. In contrast, banks are trusted the most by consumers at 61%. Almost 90% of respondents say data privacy and security are tied to earning their trust, and 66% would stop using a bank if it experienced a data breach.

During the height of the COVID-19 pandemic, financial institutions provided protection and stability by “waiving account fees, refunding insurance premiums or investing in underserved communities.” However, as this industry focuses more on a digital-first approach, the Morning Consult states that trust will be determined predominantly through “data stewardship, security and reliability” as opposed to personal relationships. 

7 US States At Risk of All Five Climate-Related Threats

Source: Safety.com survey of 1,220 American adults

Over 60% of U.S. adults believe that climate change is a threat, while 11.5% do not. Recent news coverage and documentaries are the two leading factors changing the way people respond to climate change. Americans are recycling (64.3%), picking up trash (48.7%) and reducing their use of plastic (38.9%), according to Safety.com. 

The survey looks at five factors resulting from climate change: extreme heat, droughts, wildfires, inland flooding and coastal flooding. Every state in the U.S. is at least at risk of extreme heat, which is the cause of death for hundreds of Americans each year. The other four factors vary depending on the region. California, Florida, Georgia, North Carolina, Oregon, Texas and Washington are at risk for all five threats.

To address these five climate-related threats, the report notes that states and nations need to take action. Last year marked a record-breaking year for climate disasters, costing around $95 billion in damages. Moving forward, states need to adapt plans to address this climate risk—only 26 states have already done so.

Fragile States Expect a Rise in Extreme Poverty

Source: World Data Lab projections

By 2030, 359 million people are expected to live in extreme poverty in fragile states, representing 63% of the world’s poor. The World Bank classifies fragile states as “countries with high levels of institutional and social fragility” and those “affected by violent conflict.” There are currently 39 such identified countries home to almost one billion people. 

Nigeria and the Democratic Republic of the Congo are expected to have the largest population living in extreme poverty in 2030, making up one-third of those living in extreme poverty. Children born in these fragile states have a 50% chance of growing up in poverty. For instance, half of Nigeria’s 90 million people in extreme poverty are children under age 15. 

Countries with rising poverty also see a parallel increase in longer-term risks, such as conflict relapse. Although researchers expect poverty to decline in other parts of the world, Brookings Institution states that the “success in ending poverty globally will largely depend on African fragile states.” To end extreme poverty, “social and economic exclusion” needs to be addressed, along with expanding access to basic services and securing investment from other countries.

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