What CEOs talked about in Q4/2022: Interest rates, the labor market and reshoring
In short In Q4/2022, three themes noticeably gained traction (i.e., interest rates, the labor market, and reshoring). Some of the smaller technology topics that are rising in importance include open source and no-code. References to chip shortages, supply chain disruptions, and energy prices decreased in the last quarter. Why it matters The prioritization of specific topics by CEOs will likely lead to further investment in these areas. Overview Key upcoming themes In their earnings calls in Q4/2022, 36% of CEOs focused on interest rates , as central banks around the globe tried to curb inflation (+24% growth in keyword mentions compared to Q3/2022). The labor market was another priority issue that CEOs discussed (3.2% discussed layoffs [+35% compared to Q3/2022] and 4.8% discussed salary [+10% from Q3/2022]). Moreover, reshoring discussions grew by 122% in Q4/2022, as many enterprises plan to shift production to their home countries or closer regions. Three other topics that gained increased attention in Q4/2022 (vs. Q3/2022) included FTX , the World Cup , and the U.S. midterm elections . For the first time since IoT Analytics started tracking Q4/2020 earnings calls, there have not been notable global breakout topics , such as the vaccination effort in Q1/2021, the Russian invasion of Ukraine in Q2/2022, and inflation in Q3/2021. Conversely, changes in Q4/2022 were more gradual. Declining themes As supply chains slowly improved and supply shortages eased, the discussions around chip shortages and supply chain disruptions decreased strongly in Q4/2022 (mentions of both keywords fell 24% compared to Q3). Energy prices (e.g., the keywords oil and gas) also declined in importance. Unfortunately, besides major weather events in the last quarter, the keywords sustainability and climate also lessened. | About the analysis The analysis highlighted in this article, presents the results of IoT Analytics’ research involving the Q4/2022 earnings calls of ~3,000 US-listed companies. The resulting visualization is an indication of the digital and digital-related topics that CEOs prioritized in Q4/2022. The chart visualizes keyword importance and growth. X-axis: Keyword importance (i.e., how many companies mentioned the keyword in earnings calls in Q2). The further out the keyword falls on the x-axis the more often the topic was mentioned. Y-axis: Keyword growth (i.e., the increase or decrease in mentions from Q3/2022 to Q4/2022, indexed to 100). A number >100 on the y-axis indicated that the topic had gained importance, while a number <100 indicated a decreased importance. Read our Q3/2022 analysis here . Three themes of interest are highlighted in this article in greater depth: Interest rates, the labor market, and reshoring. #1 Interest rates In Q4/2022, 36% of CEOs discussed interest rates and their resulting effects on business, which constitutes an increase of 24% compared to Q3/2022. Two years ago, in Q2/2020, only 6.5% of companies discussed the keyword inflation. However, in 2022, when inflation rates reached heights not seen in decades, the topic became a centerpiece of discussion. Policy reaction followed quickly. Many central banks kept increasing interest rates to fight inflation in the last months. The US Federal Reserve increased the federal funds’ target rate from 0.125% at the beginning of 2022 to 4.375% by the end of 2022. To fight inflation, other central banks followed suit (e.g., the European Central Bank [0%–2%) and the Bank of England [0.1%–3.5%]). Higher interest rates have multiple effects, as they increase the cost of borrowing capital and company margins and put pressure on future cash flow, which leads to pressure on stock markets , Of course, housing loans grow more expensive . Therefore, many CEOs are discussing potential side effects. However, some companies benefit unexpectedly. For example, platforms like eBay and Expedia, where consumers can monetize unused assets to gain extra income, realize upside potential. Key CEO quotes on interest rates “ As consumers in our major markets face persistent inflation, higher interest rates and rising home energy costs, they are increasingly turning to eBay for better value. This is leading to growth in GMV of used and refurbished goods .“ Jamie Iannone, CEO, Ebay 3 November 2022 Expedia: “ I wish we had a quick enough twitch muscle to tell you that interest rates are driving homeowners to us. […] So, I think we’re in a great place for homeowners who want to monetize their assets to come, assuming it’s in places that are interesting to us and where we can drive business. […] And presumably, people are maybe a little less flush with the cost of capital and may want to monetize that .” Peter [...]
