Economist Predicts When We Will Hit a Post-COVID EconomyFebruary 23rd, 2021 by Tara Taffera
What will the other side of COVID-19 look like and how will we know when we get there? This is one of the questions keynote speaker Chris Kuehl of Armada Corporate Intelligence attempted to tackle today when he addressed members of the Fenestration Glazing Industry Alliance (FGIA).
“The big question is whether the stimulus will be an opportunity for the economy to roar back,” he said.
“When the consumer is given the opportunity to spend again it [spending] will be on fire.” Whether or not the stimulus plan accelerates that is yet to be seen, he said. But one thing is certain: employees who kept their jobs saved money at a record pace.
“Our savings rates are at a pace we haven’t seen in 30 years,” he said. “We used to save 2-3% and we have been up 10-12%. That money can cascade out to the economy in a hurry.”
When that crescendo will happen however is still uncertain, as vaccines roll out slowly, and we still are unsure when COVID-19 protocols will be lifted. “We may get to some sort of herd immunity by mid-summer [July or August], but we won’t be completely out of the woods until next year.”
That being said, studies show that people’s worries about COVID-19 have declined a little—but have been overtaken by concerns for inflation.
Kuehl was certain about one thing: The pandemic economy is not permanent.
“Changes in work patterns are more permanent,” he said, “as more people will continue to work from home.”
Construction spending is predicted to be solid—even commercial. “Residential is considered a reliable sector,” he said. “The bigger threat is mortgage rates, due to the potential for inflation. If they keep going up the one driver for housing has been low mortgage rates. If mortgage rates also go up that will throttle that growth in a hurry. The banks know that housing has been driving the economy.”
One attendee asked Kuehl how the labor shortage will affect the recovery. “It’s gonna hurt,” he answered. “The vast majority of people who lost their jobs were in the service sector so they can’t fill those manufacturing jobs. We have to work to get people into training programs, and let them know this is a legitimate high-skilled career.”
The FGIA virtual annual conference takes place through Thursday.