When Mark Killion with Oxford Economics uses the word boom repeatedly during an economic outlook webinar, there is reason for excitement. That’s exactly what happened during AMT – The Association for Manufacturing Technology’s recent industry economic webinar.
From vaccine success to housing demand, there are plenty of reasons to celebrate right now. Or just exhale. After more than a year of shutdowns, shortages, and slumps, a little good news is long overdue. Here goes.
Happy Days: Take 2 Starting in the third quarter of 2021 and extending through 2022, Oxford Economics predicts the strongest gross domestic product (GDP) growth since the early-1950s. Happy Days are, as they say, here again. Thanks largely to the dramatically improving health situation, the economy is growing and what started as a gradual “spring bloom” is expected to take off into a “summer boom,” according to Killion.
Stimulus at work The COVID Relief Bill, Healthcare Enhancement Act, CARES Act, and other stimulus efforts that have been released since February 2020 have helped prop up a struggling economy. Now, as the COVID case counts decline and vaccinations increase, stimulus funds are flowing freely through the economy and boosting industries.
The plan is more jobs. Congress is still debating President Biden’s American Jobs Plan, another proposed stimulus package, which includes $2.7 trillion in infrastructure, manufacturing, and health care spending, as well as tax credits for housing and green energy investments. The proposed plan would further boost GDP. The plan focuses largely on increased spending on infrastructure and investments in both research and development and manufacturing. The largest single impact from the plan would be in the construction sector, which could see growth numbers of roughly double digits. Oxford Economics estimates that this plan would boost real GDP growth by 0.8 points in 2022 and 0.9 points in 2023. However, they acknowledge that in the short term, the impact of the plan would be tempered by higher taxes on corporations.
April job sluggishness brings summer growth. The April jobs report was decidedly underwhelming. However, Killion see this as an anomaly and not an emerging trend. He expects job growth to continue to show impressive gains through the summer and fall.
Purchasing is strong; supply chain continues to lag. It has become a broken (pun intended) record. The supply chain is overwhelmed, disjointed, and convoluted. And it is still a major concern, according to Oxford Economics. Near-term supply chain issues are a major threat to growth in several sectors, including electronics, electrical equipment, and automobiles. However, purchasing managers remain optimistic, explaining growth in new orders and production throughout the spring.