In the wake of a devastating year, businesses everywhere desperately want reasons to be optimistic about 2021. According to a range of economic forecasts, there are multiple indications that such optimism is not just wishful thinking. The predictions are supported by hard data, persuasive evidence, intelligent innovation, and adaptable business models.
Primed for Growth
According to the Wall Street Journal, “The U.S. economy now is primed for recovery, growth, and continued adaptation to a new normal.” There are historic, record-breaking numbers of new business startups. Business that pivoted into e-commerce to survive 2020 are now well established and positioned to thrive in 2021. Many traditional businesses have also leveraged remote work and other technological solutions. Although those may have initially been implemented on an emergency basis, they have worked so well that companies continue using them to slash office overhead while maintaining productivity. Innovations like credit card surcharging are also dramatically lowering the daily cost of doing business, while technology makes businesses more streamlined and profitable.
A Healthier Outlook
In addition to multiple COVID-19 vaccines, rapid COVID-19 home testing kits are also coming to market to help meet and overcome pandemic challenges. As more people around the world become inoculated and it becomes easier to test from the convenience of home, virtually all sectors of the business economy can be revived. The Conference Board already upgraded its outlook for 2020 end-of-year GDP growth by more than half a percentage point. That change was based on stronger than anticipated economic data in November, during the vital holiday shopping season. Particularly convincing were the numbers related to purchasing management and consumer spending.
Conference Board Predictions
The highly respected and influential nonprofit Conference Board, comprised of more than 1,000 public and private companies, has offered its own positive forecast. The outlook that the Conference Board believes is most realistic and probable sees the economy expanding by more than 3.5 percent, with steady acceleration culminating in a return to pre-pandemic levels by mid-autumn, 2021. In their best-case scenario, however, the Conference Board sees potential for the economy to grow by more than six percent. That depends upon how quickly COVID-19 vaccination programs are completed and new infection rates decline, and how smoothly and effectively the political transition in Washington takes place.
Central Bank Support
To support the overall economy, the Federal Reserve says it intends to keep interest rates near zero, until the job market is back to normal. But if inflation gets too high and threatens to undermine the financial recovery, the Fed is also ready to take incremental steps to offset the impact without threatening the affordability and availability of business loans. Perhaps more importantly, the Fed reports that American households recently accumulated some $2 trillion in savings. That’s spendable income waiting on the sidelines that is equal to 10 percent of the nation’s GDP.
Time will tell, but multiple forecasts and economic indicators tend to agree that 2021 offers much for businesses and consumers to cheer about, at long last.