Senior Economist for ITR Economics, Connor Lokar, presented the 2021 Economic Forecast with an overall positive message at our latest CEO to CEO live-stream. Lokar opened the talk with quips about his young appearance which highlights the fresh and unique perspective that Lokar, as a millennial, brings to economic forecasting. ITR Economics is a privately held, apolitical economic forecasting firm focusing on the private market.
The main takeaway that Lokar emphasizes is the positive outlook for 2021. While the next 90 days of economic activity will be heavily influenced by local politics, the data points and indicators are all pointing towards positive economic recovery in 2021. In the short-term, the latest stimulus is projected to inject more spending into the economy and current levels of retail sales indicate that consumers are spending and ready to continue spending at levels that rival the pre-pandemic 2019 levels.
Lokar also specified that while most industries appear to be making a comeback, certain industries such as tourism, hospitality, restaurants, etc are far more vulnerable to covid-19 effects and will take longer to recover in comparison to other aspects of the economy. Looking at the overall picture, business owners need to be preparing for an economic rebound and position themselves for a surge in demand in everything, from hiring, raw materials, and machinery. This upcoming surge in the economy will also cause an uptick in pricing for things such as capital, labor, and mortgage rates.
Preparing for the future can seem impossible in the unstable times that we have experienced over the past year. It can seem even more unlikely to prepare for a time of growth and economic recovery. However, looking at historical trends of your business during other times of economic hardship can be a strong indicator of how your business will perform. Lokar suggested revisiting 2010 and the era after the great recession. Is there anything you wish you had done in 2010 that you didn't do? This next economic recovery period could be your next chance. Lokar emphasized five steps for your business to take heading into 2021.
- Prepare for growth operationally and mentally.
- Prioritize workforce development.
- Ask yourself where your bottlenecks will be
- Leverage the current low costs: capitalize on opportunities to update and optimize systems.
- Develop your own rates of change, timing is everything.
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