2022 Economic Forecast (CONT’D FROM PAGE 1 )
business,” says Tom Palisin, Executive Director of The Manufacturers’ Association, a York, Pennsylvania, based regional employers’ group with more than 370 member companies ( mascpa.org ). “Many have actually gone into hiring mode.” With its diverse membership in food processing, de- fense, fabrication, and machinery building, Palisin’s as- sociation is something of a proxy for American industry. “Our members are optimistic and expect current levels of demand to continue well into 2022,” says Palisin. “They’re expecting to continue to hire, as well. Our annual wage and salary survey usually projects between 400 and 500 job openings for the coming 12 months. Now, though, the number is more than a thousand. So we’re looking at a doubling of the usual hiring activity.” Aggressive hiring is improving the nation’s employ- ment level, a key driver of the consumer sentiment so vital to the nation’s overall business health. “Unemployment has been declining pretty steadily,” says Scott Hoyt, Senior Director of Consumer Economics for Moody’s Analytics ( economy.com ). “Jobs are being added at a rate that prior to the pandemic would be viewed as astoundingly good.” Unemployment is expected to be as low as 4.5 percent- when 2021 figures are finally tallied, and should decline to 3.4 percent by the end of 2022, a level not far from the “full employment” conditions of the pre-pandemic econ- omy.
resents a hefty advance over the difficult comparisons of 2021, when profits spiked 35 percent. Clearly, business owners are glad to bid adieu to the pandemic-battered 2020, when their profits declined three percent. Headwinds, of course, are inevitable. And 2022 will have its own troubling mix: The peekaboo pandemic. La- bor shortages. Crippled supply chains. China tariffs. Na- scent inflation. An unsettled consumer. Yet economists do not expect negatives to prevail. “While the Delta variant is continuing to do some damage, we expect this wave of the pandemic to soon subside and for any future waves to be successively less disruptive,” says Yaros. “Labor and goods shortages will ease as the domestic and global economies increasingly learn how to live in a new pan- demic normal.” Furthermore, heftier earnings should help companies weather the coming year’s array of challenges. “Corpo- rate profit margins have been running somewhat above their five-year average of 11.1 percent,” notes Yaros. “That should provide some ability to absorb price pressures that have developed from rising commodity prices and global supply chain issues.” Sales Recover Business owners tend to confirm the economists’ sunny reports. “Most of our members have seen a healthy return of revenues and are doing about 90% of their pre-COVID
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22 October 18, 2021
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