Counterpoint Macro Index: April 2023

Published Date: 24th May 2023

Highlights:

    • The Counterpoint Macro Index increased again in April with 77.87 from 77.02 in March. This uptick is impartial to the resilience of the consumers and the risk measures taken by businesses globally.
    • Inflation remains a hot topic overall. However, there are mixed readings of economic health and outlook. The US is facing a congress stalemate with the debt ceiling issue. Inflation eased in the US as rate hikes affected consumer purchase behavior and urging businesses to reassess costs and forecasts, resulting in demand decline on both ends.
    • Europe keeps its eyes on the Ukraine-Russia war as tensions arise rather than dwindle. Inflation eased along with its US counterpart, but multiple nations saw its people take to the streets to protest high costs. The banking crisis adds pressure as cash withdrawals increase.
    • China hits a bump due to deflation fears, contrary to the other two markets. The government is formulating a package to stimulate its economy, a step that goes against the initial positive outlook after relaxation of pandemic restrictions.
    • Counterpoint forecasts China to manage alleviating its economic concerns and maintain an upward trajectory. The US is expected to be hurt by the current debt ceiling issue and the noise of presidential candidacies. Europe is under stress as the Ukraine-Russia war escalates again but could see its economy bettering late 2024 yet surpassed by US.

Source: Counterpoint Macro Index – April 2023

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Counterpoint Macro Index 2023

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
76.91 76.25 77.02 77.87 – – – – – – – –

*Macro Index report pertaining to the prior month will be updated and made available on the 24th of the current month.

Counterpoint Macro Index 2022

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
106.17 98.90 94.49 87.04 86.01 82.86 86.42 84.66 79.23 75.16 75.08 76.26

Counterpoint Macro Index 2021

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
110.48 111.46 114.04 111.24 110.89 111.10 112.11 107.01 109.83 112.27 113.11 108.96

Counterpoint Macro Index 2020

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
106.61 97.35 71.40 69.87 73.20 83.13 88.28 92.78 94.54 101.36 102.37 109.90

What is the Counterpoint Macro Index?

The Counterpoint Macro Index 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.

Our analysts consider quantitative and qualitative data, in both public and private domains, as well as Counterpoint’s proprietary datasets to measure the health and outlook of the global tech industry. Our Macro team comprises experienced analysts across Counterpoint’s geographical coverage and sector disciplines.

We expect the Index to assist participants in the tech industry to understand the current global macro environment, particularly in the short to medium term. In particular, we have in mind personnel responsible for business planning, forecasting, and strategic decisions at tech companies.

What we are tracking?

The Index captures more than 130 data points every month. The following are some of the key data points that we track (with weightings):

  • Macroeconomics (35%) – GDP growth rate and forecast, composite PMI, major stock market performances, consumer confidence and sentiment, consumer and producer price changes, job creation and unemployment rates, retail sales growth, Counterpoint monthly smartphone sales data
  • Domestic, International Politics, Regulation & ESG (30%) – Presidential approval ratings, central bank/fiscal policy updates, key policies and events, regulatory policies and events, ESG events and updates
  • Corporate & Supply Chain (35%)
    • Key company announcements, performances and updates
    • Smartphone shipment forecast
    • Investor and business sentiment
    • Price changes in global energy (oil and gas), global logistics (air and container freight), key raw materials for the manufacturing of electronic components (general electronics, display, electric vehicles and batteries)
    • Key leading indicators for the semiconductor industry, including smartphone shipment forecast, semis billings, revenue, IC capacity, inventory level and inventory days, wafer pricing, key component pricing (memory and display), and smart device ODM/EMS outlook

These areas eventually culminate in the Macro Index. Each data point is weighted, depending on our interpretation of its impact on the global tech environment. Each of the above three areas (highlighted) account for between 30-35% towards the Macro Index weighting. We do not intend to change the weighting significantly over a period of time but may choose to do so if issues warrant extra attention.

How to read the Index?

For each data point or event, analysts consider the likely short- to medium-term impact on the global tech industry, based on the following principles:

  • The smooth running and a certain level of predictability in the global tech market: Hindrances or additional costs to businesses generally are evaluated negatively.
  • A healthy market for consumer tech products: A positive score reflects customers’ reasonable expectation to pay a fair price for new and meaningfully upgraded tech products, with an abundance of choice.
  • A predictable operating environment for tech companies: A positive score would mean senior managers and investors in the tech industry can expect to operate smoothly, with predictability, and expect reasonable financial returns in the short- to medium-term.

We further break the Macro Index down into four ‘constituent indices’:

  • Consumer sentiment – which is separated into 4 segments – US, China, Europe & Developed Markets and Emerging Markets. We analyze each region’s headline GDP growth rates, consumer confidence & sentiment indices, consumer pricing trends, retail sales trends, unemployment numbers and devices markets’ sales numbers.
  • General business sentiment – which is separated into 5 segments – US, China, Europe & Developed Markets, Emerging Markets and Transport & Manufacturing. We analyze each region’s GDP forecast numbers, purchasing manager indices, producer pricing trends, investor and business confidence surveys, and stock market movements. We also look at global energy pricing trends, and transport prices include air freight, container shipping and raw materials shipping.
  • Tech business sentiment – which is separated into 5 segments – Tech Outlook, Semiconductor Outlook, Tech Commodities, Supply Chain and Smartphone Outlook. We analyze key events and developments for tech companies, the pricing, inventory, capacity, equipment billing and sales numbers for semiconductor and tech manufacturers, memory and display panel pricing trends, ODM/EMS outlook for PC and smartphone sectors, and prices of key raw materials for the manufacturing of electronic components.
  • Policy, world market and global environment – Which is separated into 5 segments – US, China, Europe & Developed Markets, International, Regulation and ESG. We analyze domestic political events, fiscal and monetary policy agendas of the three regions, international politics events, and key updates by global and regional regulatory regimes, and the latest developments in ESG areas.

Our analysis strives to be company and country agnostic. Our conclusions will take a neutral position, and consider the interests of the global market, consumers and market participants.

The Counterpoint Macro Index and the constituent indices all have a baseline of 100. Any number above 100 reflects our interpretation of an optimistic/benevolent environment in the global tech landscape; any number below 100 reflects the opposite.

We also provide forecasts for three months after the month of issue, and a forecast for the 12th month after the month of issue.

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