US Economy Forecast: Key Insights from Bank of America Global Research
Bank of America Global Research has unveiled a comprehensive report titled “State of the World,” spotlighting projected changes in the global economy over the next five years and their potential impacts on the United States by 2030. This February 2025 report delves into various significant topics including artificial intelligence, clean energy, and trade dynamics. Here are five critical takeaways that may shape the US economy in the years to come.
1. AI and Robots Will Boost Productivity, But Jobs Will Evolve
The advent of artificial intelligence and robotics is set to reshape numerous industries, ranging from manufacturing to healthcare. The report mentions the concept of “agentic AI”—fully autonomous agents and robotic fleets that are likely to revolutionize sectors heavily dependent on human resources. This change is anticipated to spur a corporate efficiency revolution that could fundamentally transform the global economic landscape.
However, with technological advancement comes a shift in the labor market. While some traditional roles may become obsolete, new opportunities will emerge, particularly in tech and science-related fields. Workers willing to adapt and upskill could see higher wages and new career paths as industries adapt to these changes.
2. Energy and Material Shortages Could Drive Up Prices
The expansion of AI systems and data centers requires significant amounts of energy and raw materials. Bank of America highlights that as demand surges, we may experience supply shortages for critical resources such as water and commodities, subsequently driving up prices. This scenario suggests that while consumer inflation may stabilize, specific natural resource costs could remain elevated.
Additionally, companies involved in energy production, mining, and semiconductor manufacturing, like NVIDIA, are likely to benefit significantly as they strive to meet this rising demand. This potential supply-demand imbalance can shape investment opportunities across various sectors.
3. A Massive Boom in Clean Energy and Infrastructure
According to Oxford Economics, the world will need around $94 trillion in new infrastructure by 2040 to support growth ranging from transportation networks to energy systems. By 2030, this translates to an estimated additional $500 billion in annual spending, primarily driven by government investments.
A central theme in this infrastructure boom is the focus on clean energy. Since 2021, over $1 trillion has already been allocated to projects related to renewable energy, electric vehicles, and semiconductor plants. While this growth is poised to spur job creation in the construction, engineering, and tech sectors, it may also lead to an increased national debt as the US seeks to finance these ambitious projects.
4. Nations Will Compete Harder Over Technology
The report underscores that global competition in advanced technologies will intensify. As nations adopt “country-first” policies—such as “Europe First” or “China First”—the free flow of goods and capital, which characterized the globalization period of the late 20th century, could be disrupted. This competition may lead to increased prices and push countries to build independent supply chains to secure their technological futures.
While this dynamic could hamper global trade, it may also stimulate domestic manufacturing and innovation in the US, potentially reshaping the landscape of competition among nations.
5. Cybercrime Will Get Much Worse
Cybersecurity threats are anticipated to escalate dramatically, with estimates suggesting that cybercrime could cost the global economy about $10.5 trillion by 2025. The report cites that advanced AI technologies could make scams and digital fraud more deceptive and widespread, putting both individuals and businesses at increased risk.
In response, there could be a surge in investments in cybersecurity across various sectors, particularly in banking, defense, and infrastructure. The necessity for robust protection against these emerging threats may elevate cybersecurity to one of the most critical sectors in the coming years.
FAQs
How will AI and robots impact jobs?
AI and robots are expected to enhance efficiency, but this will also lead to changes in job availability. Workers who invest in upskilling will find better opportunities in tech and science.
Why could energy and material costs rise?
The growing demand from AI systems and data centers will require vast amounts of energy and materials, which could result in higher prices for essential resources as supply struggles to keep up.
Each of these insights presents a unique aspect of the expected economic landscape in the United States, offering a glimpse into the transformative changes on the horizon. Understanding these dynamics will be essential for workers, investors, and policymakers as they navigate the evolving economic terrain leading up to 2030.
