Three problems for companies in 2021

Companies in OECD countries are likely to face three key problems in 2021. 1. There will be a shift in the sectoral structure of the economy; demand in some sectors will remain permanently weakened, in others it will be strengthened. Some companies will therefore have to adjust their employment and investment downwards, while others will have to adjust them upwards. 2. Corporate balance sheets will deteriorate, due to the loss of equity caused by falling earnings and rising debt. Companies will therefore have to increase their equity and reduce their debt, which may lead to changes in investment strategy, the location of production and the nature of financing. 3. OECD governments and public opinion will put strong pressure on companies to spe e d up their energy transition, raise low wages and reshore, which will run counter to the determination to improve balance sheets and profitability.