More than 1,000 tri-state business and non-profit professionals attended an exclusive virtual event as Institute for Trend Research (ITR) Economics Principal and President Dr. Alan Beaulieu presented his annual economic update and forecast. The record-breaking session, co-sponsored by Huntington Bank and Frost Brown Todd, provided insights for navigating the road ahead in 2022, as well as the long view for the decade.
Pinpoint Accuracy in Economic Forecasting
Dr. Beaulieu is legendary for providing economic forecasts that help companies improve their performance and profits, and his 94.7% accuracy rate shows he’s one of the most informed and insightful economists in the country. In addition to his role at ITR Economics, he’s the Senior Economic Advisor to the National Association of Wholesalers, Chief Economist for numerous international trade associations, and a noted author and speaker.
The event is now available on-demand, along with a download of the presentation slides, in our On-Demand Events.
Dr. Beaulieu forecasted in his presentation that the economy will continue to prosper in the near future, and noted it’s important to recognize that the growth experienced in the previous year, caused primarily by government stimulus and pent-up demand from the COVID-19 pandemic and the 2020 shutdown, is not sustainable. Growth is expected to continue through most of this decade – but Beaulieu expects a slowdown in 2023 and a brief recession in 2026; all other years during the 2020s are expected to be excellent from an economic growth perspective.
Supply Chain and Labor Shortage Outlook
Dr. Beaulieu addressed the supply chain issues and labor shortages affecting just about all sectors of the economy. He stated that the supply chain issues were caused primarily by excessive demand fueled by stimulus and shutdown recovery. Beaulieu expects the supply chain issues to slow as the recent non-sustainable economic growth eases.
Unlike supply chain issues, Dr. Beaulieu does not see an end to labor shortages. He recommended that businesses invest heavily in technology (especially given the current interest rate environment) that can be used to keep the need for labor counts low. He also recommended the adoption of programs to attract and retain talent and stated wages will continue to increase in order to remain competitive with other businesses and industries.
Dr. Beaulieu also stated that inflation has historically fluctuated in the same manner as government deficit spending. With government deficit spending expected to continue, inflation is certain to increase as we move into and through 2022. This will likely result in increases to interest rates by the Fed beginning at some point in 2022.
Dr. Beaulieu addressed the outlook for automobile manufacturing in light of chip shortages caused primarily by poor order forecasting for these chips prior to COVID-19 and the production shutdown during 2020. He expects the recovery from this chip shortage to be somewhat slow; it may be early 2023 before the automobile backlog related to the chip shortage reverts to 2019 levels, but automobile production will prosper through this period and beyond.
Want to talk about Dr. Beaulieu’s forecast, have a question about how to prepare for the road ahead, or are interested in determining if Dr. Beaulieu’s forecasting tools present opportunities for your business? Contact us – we’re here to help.