Stay buckled up, folks! The often-mercurial economic adventure continues. November’s Industrial Heating Equipment Association’s (IHEA) Executive Economic Summary addresses the crossroad and the economic forecasts that are trending. The summary begins, “The economy seems to be sitting at another crossroads, and thus far this year there have certainly been many of them. There are basically three forecasts in circulation as far as the coming year is concerned.”
The report defines the three outlooks — the “V,” the “swoosh,” and the “W”– and analyzes which model seems most realistic right now based on real time data, although we know that can change at any moment. The preferred “V”outlook “holds that there will be a rapid rebound in the next quarter or two and this will yield a rebound nearly as quick as the decline. To be honest, the time for the ‘V’ option has largely passed by. We would have had to see some truly dramatic numbers appear by now.”
So, if the “V” is an unlikely option, the summary states the “swoosh” might be the best option: “It asserts that there will be continued real growth in the first quarter of 2021 but tempered a little by continued consumer trepidation and the impact of the continued shutdown. This means that there is not a rapid rebound, but a drawn-out version that starts to look real by the start of Q2.”
The report continues, “The remaining option is the ‘W’ or the double dip recession and that is nobody’s preference. This would be the result of another hard and comprehensive lockdown. It is not likely the entire country would be subject to such a shutdown, but certain states will be affected more than others.”
There is growth, however. As we look specifically at the November indices, all but three of the eleven measured are trending in a positive direction. The summary states, “There are several near universal factors that are driving all of the index readings at this point. The first is a growing level of confidence regarding the performance of the economy in 2021. . . . The second factor stems from the first. That surge of activity will strain capacity in many sectors. . . . and the third is the state of the global economy.”
Stayed tuned! The end of 2020 and beginning of 2021 promises to be full of excitement.
Check out the full report to see specific index growth and analysis which is available to IHEA member companies. For membership information, and a full copy of the 12-page report, contact Anne Goyer, executive director of the Industrial Heating Equipment Association (IHEA). Email Anne by clicking here.
