Managers are challenged in mid 2022 by inflation, changes in logistics, and market upheavals. EkaLore has been releasing analysis and contexts regarding these challenges. They affect management decisions, talent, and marketspaces. This release is directed to the managers caught in the middle — responsible for delivering results — while larger economic, market, and technology issues pressure the enterprise.
Pressures on middle managers’ budget and resources occur even when results are good. Escalating inflation pressures sales to get ‘that much more’ to make up for inflation’s effects on costs. Global changes in currency values means managers can ‘make their numbers’ in local metrics and fail to deliver on an adjusted global target (as the Euro, Yuan, Yen, and Dollar change relative value). Local market effects on labor (inflating costs in some, deflating value in others) affect the ability to get and keep talent. A middle manager needs to drive for local performance while keeping an eye out for larger enterprise trends.
Energy is a key pressure driving costs for all enterprises. Brent Crude has risen dramatically. It was USD $59/ in 2019 [Source US Energy Information Administration [https://bit.ly/3PaSOOS ] and almost doubled USD$90/Brent in 2022. Energy exporters in the Middle East and Russia have no incentives to replan production or force markets to lower prices for crude. (Reference the breakeven points listed below to see why) USA investments are lagging in energy infrastructure and exploration as enterprises are wary of Federal government policy, not to mention high finance costs destroying profits over an investment term.
European, East Asian, and other developed markets dependent on imports will see their enterprises facing higher costs for energy, feedstocks, logistics, and domestic consumption. Direct inflationary effects measured by governments in the USA and EU are relatively small where larger impacts (including conflicts) create amplified effects. Energy (and feedstock) costs assumptions will continue to rise for the next series of financial periods.
(From IIF.COM)
“Qatar fiscal breakeven is $44/b in 2022
Bahrain’s fiscal breakeven is $76/b in 2022
Saudi Arabia, fiscal breakeven is $67/b in 2022
UAE’s breakeven is $64/b in 2022
Kuwait will see its fiscal breakeven projected to be $61/b in 2022
Oman $67/b in 2022
The next Post, “What’s a Middle Manager to do” will be posted at this LinkedIn feed or at www.ekalore.com/ARS
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