Counterpoint Macro Index Caps off 2022 with Another Quarterly Drop; But Forecast is Raised for 2023

  • The Counterpoint Macro Index reading of 77.56 for December 2022 marks another quarterly drop and only the second month-on-month rise in the index during 2022.
  • Geopolitical tensions, inflation and slumping business sentiment pose the biggest strains on the tech sector.
  • However, our new forecast for 2023 has been raised significantly, thanks to the surprise reopening in China and ensuing economic growth, as well as a calmer geopolitical environment and inflation trajectory.

 London, Boston, Toronto, New Delhi, Hong Kong, Beijing, Taipei, Seoul – January 30, 2022

The Counterpoint Macro Index, which tracks the environment and sentiment for the global technology industry, closed at 77.56 in December 2022. This is a small drop of 1.67 points from September.

December’s reading was only the second month-on-month rise in the index during 2022, after dropping to a post-pandemic low of 75.08 in November.

Unsurprisingly, the biggest headwinds for the index in Q4 were yet again the Ukraine war and inflation. Both issues weighed on the index throughout the year, as the war continues with no end in sight, while structural issues in the global economy, including rising interest rates, energy crisis and slumping consumer confidence, are unlikely to be resolved quickly.

Counterpoint Macro Index, Q4 2022 vs Q3 2022

The technology sector, which held up resiliently during the post-pandemic ‘boom’, was the latest domino chip to fall during the quarter. In Q4, we saw a slew of disappointing revenue forecasts (Samsung, Amazon, Alphabet, Meta, Tesla), capex cuts (TSMC, Intel, SK Hynix, Micron) and, more recently, layoff plans (Amazon, Meta, Microsoft, Salesforce). We see no let-up in the current earnings season. The supply chain sub-segment, in which Counterpoint covers a broad range of tech manufacturing metrics such as foundry capacity, pricing and inventory levels for key components and semiconductor equipment purchases, also deteriorated in the quarter. This is mainly due to the rapid turn in the semiconductor super-cycle where the demand-supply balance has tilted swiftly to a supply glut. Key chipset, memory and component manufacturers face rapidly retreating demand, inventory and pricing pressures, but at the same time cannot afford to cut spending and capacity for fear of another supply chain snarl-up.

On the other hand, a big rebound in politics and policy-related metrics was seen in Q4. Most prominently, the withdrawal of COVID-Zero restrictions by China, as well as the end of the crackdown on tech and real estate sectors in China helped end a precipitous slide in consumer and business sentiments in the country. Furthermore, a softening of China’s diplomatic tone may usher in a period of better relations with the developed world, and reduce the likelihood of military confrontation in the near future. The economic reopening and potential pent-up trade in China will be the biggest reason for optimism in 2023. In the US, anticipated political turmoil from contentious mid-term elections failed to materialize, as the Republicans underperformed while Democrats held onto the majority in the Senate. Support for Biden’s presidency also staged a small rebound after many months of consecutive declines as inflation peaked, with the Federal Reserve on the cusp of drawing back many months of rate hikes. Further afield, there were also important wins on the ESG front, as COP27 reached a historic agreement on providing financial assistance to developing countries for losses and damage caused by the climate crisis, while landmark policies were signed in the US and Europe to fund renewable energy and cut carbon emissions.

Risk-Impact Map, Q4 2022

Risk-Impact Map, Q4 2022

We expect the same risks that cast a shadow over the global tech scene in 2022 to continue to exert a negative influence in 2023. However, looking toward 2023, we have revised our 12-month forecast significantly from 81.07 to 93.44 points (100 is the baseline). We believe the worst of the macro headwinds may have already passed, while an uplift can be expected from economic normalization in China and the end of the rate hike cycle in most of the developed world, which can both reduce the risk and impact of a recession. The war in Ukraine, however, will continue to be the biggest cause for caution in 2023 as there appears to be no end in sight, and there may be renewed troubles regarding food and energy supplies.

Counterpoint Research’s market-leading Macro Index is a monthly report that aims to capture the environment and sentiment for the global technology industry. We look at issues and measures in macroeconomics, domestic and international politics, supply chains, industry performance and outlook, and regulatory events and outlook. The index captures more than 130 data points every month. Below are some of the key data points that we track:

The service is available for subscribing clients.

 Feel free to contact us at for questions regarding our in-depth research and insights.


Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

 Analyst Contacts:

Yang Wang


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Top 10 Macro Risks For Tech World in 2023

  • Counterpoint analysts say economic recession will be the biggest macro risk affecting the tech world in 2023.
  • Economic recession is followed by the ‘US vs China rivalry’ and ‘energy crisis’ risks.
  • There is a sense that the tech industry is at the whim of factors it cannot control, as most of the issues do not relate to tech itself.
  • China-related issues feature prominently on the ranking, appearing three times.

 London, Boston, Toronto, New Delhi, Hong Kong, Beijing, Taipei, Seoul – January 24, 2023

Counterpoint Research has released its latest list and analyses of the top 10 macro risks that are most likely to impact the tech industry in 2023. In the list, which is a result of a survey conducted among Counterpoint analysts, the potential of economic recession ranks as the highest, by a large margin, followed by ongoing US and China tensions, and the energy crisis, which mainly stemmed from the Russia-Ukraine war.

Average Score of Top 10 Risks Rated by Counterpoint Analysts

average score of top 10 risks rated by counterpoint analysts

The risk of economic recession continues to impact almost all industries, and tech has not been spared, despite the post-pandemic boom. The concerns about recession driving other macro risks resonate throughout our analysts’ primary concerns, such as in expected emerging markets’ pain, tech earnings retreat, and China’s recovery path. As we wrap up the report, there is a sense that the worst of the economic headwinds in the developed world may have passed, but there are still question marks over how much of the damage has already been inflicted, or how fast the economic rebound will be in the coming year.

In 2022, we also saw an escalation of tensions in the United States vs China rivalry. Most prominently, sanctions by US authorities against China’s fledging semiconductor industry are likely to hold back growth in this strategically important sector, with deep and long-lasting ramifications in China and beyond. Elsewhere, the two countries still hold many grudges, the most significant being the status of Taiwan, stance over the war in Ukraine, and trade tensions. Any of these have the potential to plunge the countries into deeper conflicts, but from our point of view, the fragmentation of the global system into potentially ‘two standards’ is the most serious threat for the tech industry, as innovation will slow while costs go up.

Inflation reached the highest levels in decades in the West in 2022. One of the key drivers of this inflation was, and remains, the energy crisis. The cost of energy spiked in 2022 as a consequence of Russia’s invasion of Ukraine, especially for European nations, as well as those in emerging markets. As we foresee no conclusive end to the war, energy will continue to be an unstable platform for the global economy in 2023, particularly as a large increase in energy demand is expected due to China’s reopening. There are positive signals on the renewable energy front, such as the EU and US passing landmark clean energy packages that are expected to increase investments and reduce emissions much more quickly than initially anticipated. But still, the world is many years and perhaps decades away from stopping its reliance on hydrocarbons as the main source of energy.

BONUS PODCAST: Key Macro Risks For Tech Industry in 2023

Here is a snapshot of the rest of the top 10 risks:

  1. Emerging markets pain: The post-pandemic boom is absent in emerging markets, resulting in a notable drop in living standards. A strong US dollar, lack of inward investments, deteriorating fiscal and monetary positions, and continued volatility in energy and food supplies will hamper emerging markets’ growth potential.
  2. Tech earnings retreat: Big Tech hired too many workers and took on too many poorly thought-out projects. Now, the withdrawal of ‘easy’ money is harshly exposing the less robust companies. Sectors exposed to geopolitical tensions, regulatory scrutiny, and business models accused of brewing social ills will be most under pressure.
  3. China’s disorganized withdrawal from COVID-Zero: A sudden withdrawal from COVID-Zero has taken most of the population by surprise, leading to a massive infection wave and excessive deaths. An economic rebound is expected in 2023 with the release of pent-up demand, but the healthcare damage could linger on in the economy and society.
  4. China’s long-term economic stagnation: China saw three ‘lost’ years during the pandemic when economic growth was put on the back burner. It will be a test to see if the country can rediscover its economic growth mojo, while tackling a range of structural issues including population decline, high debt levels and a fracturing real estate sector.
  5. Cybersecurity: The pandemic and the war in Ukraine ushered in a period of persistent and high-profile cyberattacks, which will continue to pose grave risks to businesses and institutions in the coming years. There is a sense that defenders struggle to catch up with the attackers, who are richly resourced and operate nimbly, with some backed by malevolent state actors.
  6. Supply chain ‘reshoring’ not living up to expectations: Talk of building a domestic and ‘resilient’ supply chain continues to gain traction, but the global recessionary environment, the nature of economic principles, and logistical realities pose daunting challenges for those looking to move established supply chains home.
  7. Climate change: 2022 was the warmest year on record. Extreme weather caused significant human life and economic losses. Some progress has been made by the world’s most important actors, but it falls short of key climate goals. Companies are starting to modify their business practices to take a more responsible stance toward the environment, but sometimes this appears to be more of a marketing spin than real action.

Despite our gloomy tone, we would emphasize that the reason why negative shocks hit the tech industry hard in 2022 was that many were unprepared for the extent and concentration of the risks. In 2023, many of the risks we identified will become well known, and the nimblest companies will institute mitigating mechanisms to navigate the uncertain near-term future. Nevertheless, it is critical for all industry participants to be wary of potential risks and plan for potential opportunities, instead of being overwhelmed by short-term adversity.

Counterpoint subscribers can access the full report here.

We welcome questions, feedback and discussion with clients over the risks we set out here as well as the ones that didn’t make the cut.

Counterpoint Research’s market-leading Market Monitor, Market Pulse and Model Sales services for mobile handsets are available for subscribing clients.

Feel free to contact us at for questions regarding our in-depth research and insights.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, USA, China and India.


Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Yang Wang


Follow Counterpoint Research

Definite Fault Lines in China’s 2018 Car Sales: A Reason for Concern?

China, the world’s largest and fastest growing car market, is showing signs of losing steam; it recorded negative growth for the first time in 20 years.

For the sixth straight month in a row, China car sales fell. The rate of decline was 13% in December versus the year earlier, bringing the full year 2018 sales to 28.1 million. This was a decline of 2.8% from 2017; at the outset of 2018, the China automotive market was projected to grow by 3%. While the first half of the year started off steadily, the story began to unravel soon after. Signs of a moderating economy are apparent, with fault lines appearing from a combined impact of government credit-tightening measures, and the anxiety of a prolonged trade war with the US.

What Ails China Automotive Sales?

A number of concurrent and compounding factors pulled automotive sales down in 2018. Significant among them are:

Vehicle Purchase Tax Changes:  In 2015, the government introduced policy incentives to stimulate car purchases. From October 2015 to Dec 2016, vehicle purchase tax for low-emission cars (≤1.6L engines) was lowered from 10% to 5%, stimulating an aggressive YoY growth of 15% in passenger car sales during the period.  In 2017, vehicle purchase tax was raised to 7.5%, resulting in car sales growth moderating to 1.4%. In the beginning of 2018, addressing growing environmental concerns, the purchase tax was moved back to 10%, slowing sales noticeably. Towards the end of the year, most car buyers considered postponing purchases, in anticipation of tax cuts being reinstated in early 2019, to jump-start the industry.

US-China Trade Tension:  In July, import duty on U.S. vehicles was raised by China to 40%, a result of the two countries raising tariffs on $50 billion worth of trade goods from each other. The initial round of tariffs has dramatically impacted the automobile industry, with uncertainty to China’s manufacturers and traders on their export businesses. Ford was the worst hit among global car makers in China last year, with its sales shrinking 37% percent. Tesla dropped prices of its Model X and Model S models in China between 12 and 26%, absorbing a significant part of the tariff, to ensure their cars remain competitive, with sales of locally produced new-energy vehicles (NEVs) rising fast.

Currently, China has eased-back, announcing a suspension of additional tariffs on US vehicles and auto parts for three months, starting January 1, 2019. However, should tensions flare-up again, China can be expected to hit back at US automotive manufacturers, with another round of tariffs.

Increasing Household Debt Ratio: Based on research by Renmin University, the average household leverage ratio in China (household debt/household income) reached 111% at the end of 2017, higher than the U.S., which was at 108%. The ratio is significantly higher for tier one and tier two cities, with relatively higher property prices, constraining discretionary spending, especially for car purchasing.

Moderating Economy: The Chinese economy is being estimated to have grown around 6.6% in 2018 – the weakest since 1990. Expectations are that a target between 6 to 6.5% is being planned for 2019. The slowdown may have a number of underlying reasons including the Yuan weakening, Chinese stocks losing value, consumers agonizing over China’s deepening trade dispute with the U.S, tightening of consumer financing and a flattening demand for smartphones.

With decreased household incomes, especially in tier three and four towns, consumers are holding back non-essential purchasing, influenced by a conservative outlook. These consumers have been a primary target for budget cars and have been the contributors for market growth in recent years.

2019 Outlook

China Association of Automobile Manufacturers (CAAM) expects weakness to persist and has forecast flat sales of 28.1 million vehicles for 2019, while other government and industry bodies see 0% to 2% growth. China is already in dialogue aiming to resolve trade tensions with the US, confirming suspending reciprocal tariff increase temporarily, on automobiles and parts imported from America.

In terms of stimulus interventions, tax breaks have been the most popular mechanism used in the past, especially for new energy vehicles (NEV), which also contribute to a greener economy. Encouragingly, NEV sales jumped 61.7 percent in 2018, to 1.3 million units for the year.

Chinese authorities have also been trying to rein-in the country’s rising debt, with China’s state-owned banks told in April to stop lending to local governments. As the economy shows sign of softening, China appears to be using investments to boost the economy again. The National Development and Reform Commission, a top Chinese economic regulator, has already announced promoting infrastructure investments earlier last year, with specific reference to bullet trains and public transportation.

China’s central bank has also stated it will reduce the ratio of cash to loans that domestic lenders need to hold on their balance sheets, a move that is expected to add $220 billion to the nation’s financial system, as officials attempt to re-ignite growth.

NEVs to the Rescue?

A positive signal for the automobile market in China is sales of NEVs. While traditional passenger cars are seeing a continuous decline, sales of NEVs in 2018 reached close to 1.3 million from January to November 2018, up nearly 62% compared to last year. NEVs are expected to emerge as the new upgrade catalyst for the market.  CAAM sees NEV sales hitting 1.6 million this year. Electric-car sales, accounting for 4% of 2018 total, are expected to be on track to hit the government’s 2025 projection of 20%, especially with regulations previously announced, mandating all automakers to start producing EVs in 2019. Tesla has already broken ground for a new factory in Shanghai,  aiming to start production by the end of the year, while GM, Volkswagen, and others are readying a flurry of EV launches.

Growth of EVs in China is attributed to supportive government policy, including public procurement programs, financial incentives, subsidies to EVs’ purchase prices, tighter fuel-economy standards, stringent emission regulations, low/zero emission vehicle mandates and a variety of local measures, i.e. restrictions on vehicle usage based on emission performance.

However, despite these governmental interventions and growing absolute numbers, EV penetration remains low. Considerable work still needs to be done, i.e. technological upgrades for battery range, further investments in accessible charging infrastructure and vehicle development for products that Chinese customers really want, before EV’s can compensate for the shortfalls in conventional fuel vehicles.


The Chinese auto market is possibly nearing maturity, with penetration of automobiles in the country’s major tier one, two and three cities reaching a point of inflection. The year’s weaker auto sales may also just be a result of a combination of adverse economic factors. In any case, China’s industry’s performance in 2018 is giving global automakers and industry observers pause for reflection, and concern.

Analyst Contacts:

Vinay Piparsania



James Yan



Rick Cui


Flora Tang



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