Economic Outlook 2021
Boom, Doom, or Gloom
An Interview with ITR Economics’ Alan Beaulieu
WHAT TO EXPECT
This year has been packed full of unpredictable events, including widespread social unrest, a raucous election season, a massive economic crisis, and, of course, a pandemic. With all the unforeseeable things that have happened this year, you might be thinking: “How could anyone possibly see what is coming next?”
If that sounds like you, you will be thrilled to hear from Alan Beaulieu of ITR Economics. With a 94.7% accuracy rate over the past 35 years, you won’t want to miss his insights into 2021. How long will it take until the economy and job markets recover? Which sectors will prosper, which businesses are already recovering, and which industries are still heading for a hard landing? All this and more on today’s episode!
SEGMENT #1 – Alan Beaulieu
It feels like everything is changing too fast to track, but Alan Beaulieu of ITR Economics has some good news: It’s all working as it should. He uses models and data to cut through the noise and predict economic trends. Instead of getting caught up in sensationalized headlines, we can take comfort knowing that the economy is still working.
Alan starts with a reflection on 2020, then dives into some predictions for 2021. And with a 94.7% accuracy rate over the past 35 years, these predictions are safe bets. Even though many sectors have taken a beating, like commercial real estate, other industries are already bouncing back. Distribution and logistics, manufacturing, and healthcare are all good industries to look for a job–and they are hiring!
SEGMENT #2 – AHEAD OF THE CURVE with Special Guest Mike Spremulli
On Ahead of the Curve: Normal 2.0, Michael Spremulli joins the show to talk about how to be seen and heard on video calls. Don’t overlook your AV equipment in this digital age, it can make or break your calls!
LISTEN, WATCH, SUBSCRIBE
[6:35] “The headlines are one thing, the reality is another.”
[7:03] “Our job is to show them [people] reality so they can prepare properly.”
[9:13] “One of the biggest mis-truths in our country is that we can’t compete.”
[13:18] “Recessions cause bankruptcies, bankruptcies don’t cause recessions.”
[24:23] “There are really good-paying jobs out there. You can have a good lifelong career beginning two months ago.”
[27:15] “It’s all working as it should. The economy is a machine producing what it should produce: opportunity and growth.”
Looking Back on 2020 [6:25]
When reflecting on 2020, Alan makes sure to cut through the noise and look at what really matters. Headlines are one thing, but businesses must be able to cut through the noise and see what is really happening by looking at markets, numbers, trends, and things that actually indicate the economy.
Many businesses this year were faced with a brief period of slowdown or closure, only to quickly be faced with a new world full of uncertainty. This year, Alan has focused on helping businesses see reality, which means spending money and getting ready for a good 2021.
Part of looking at reality is looking at numbers and data. For instance, it is widely believed that the US has a hard time competing in manufacturing. However, the data shows that this country has a strong cost index and a thriving market, which makes it a great home for investments. Even though headlines might tell a different story, the numbers don’t lie.
Industries Landing in 2021 [11:45]
Some industries will have a hard landing in 2021, meaning they will struggle at least in the first two quarters, and others will have soft landings, meaning they will start to rebound. The forecast here is just about what is to be expected: hospitality, malls, tourism, travel, and all the industries directly impacted by COVID restrictions will continue to see hard times.
In addition to these obvious industries, other sectors like office space and commercial construction will likely take a hit. This is not only a result of distributed work and a slower economy, but also because many spaces are now vacant, reducing the need for new construction.
But people looking to make plans for 2021 need to beware of a common misconception. Many people fear the amount of bankruptcies that next year is sure to bring because they will lead to a recession. However, Alan notes that it’s actually the other way around: recessions cause bankruptcies.
Bankruptcies are actually a good part of a growing economy because they create opportunities. When there is a bankruptcy and recovery, either another competitor will buy up the business and succeed even faster, or the market will open up to create space for small businesses and entrepreneurs.
The Rise of Distribution Centers [17:18]
As the trend of people leaving cities for more open spaces continues, supported by technology and distributed work models, Ira identifies distribution centers as a huge potential growth area in the coming months and years.
Alan forecasts that distribution centers have been and will remain being good business. However, even their strength will only dull the decline, not turn it into recovery.
Preparing to Respond in the Future [18:20]
Joyce believes that the future of work will depend on the ability of companies to ramp up and ramp down frequently and seamlessly. Even though Alan believes that he won’t see another pandemic in his working career, he believes it makes sense to be prepared nonetheless because that’s the world we live in now.
Alan also does not believe that the future necessarily holds more volatility than we have been experiencing. Cyber-attacks and terrorism are nothing new, and we have been living in a volatile world for quite some time. Even though there has been a lot of uncertainty recently because of the pandemic, long-term fear of increased volatility is not borne out by economic models.
Growth and Recovery [23:04]
Over the near term, mean term, and long term, the demand for healthcare is going to increase. The thing that will change is how it is paid for: a single-payer system, increasing copays, increasing insurance payments, or some other way.
Other industries are recovering quickly as well. Manufacturing and construction are both growing quickly, as well as distribution and logistics. There are plenty of good-paying jobs in these fields with varying levels of qualification and training required, but there is plenty of opportunity to create a career.
The unemployment rate is currently at 6.4%, and the Federal Reserve predicts it will stay around 6% to kick off next year. Alan predicts the unemployment will continue to go down, jobs will increase, and the economy will continue to function as normal. In fact, Alan also predicts a growing need for increased immigration as the number of open jobs not being filled by Americans continues to rise.
Ahead of the Curve: Normal 2.0 [35:30]
Michael Spremulli joins the show today to talk about how to thrive in virtual meetings. Video calls can sometimes feel like a seance: Hello? Are you there? We can’t see you!
Here are two principles to keep video calls comfortable and effective: Be seen and be heard. Being seen starts with getting the right webcam–and no, your laptop’s built in camera is not good enough! Mike recommends the Logitech C920, which is a tried and true, relatively inexpensive choice.
Being heard means getting a good external microphone. Once again, the built in mic will work, but it won’t give you the good quality you need! Mike uses the Sennheiser PC-8 USB microphone, but for a little more money, the Audio Technica AT2020 is a workhorse microphone to meet all your needs.
Finally, one thing that might slip many folks’ minds is lighting. But you don’t need to break the bank with four lights like Mike does. To jump in, it’s easy to get started with a ring light like this one from Neewer. The next level is a studio lighting setup like the GVM Studio Light Kit that pairs with an app to help dial in custom lighting.
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