Had we written this Blog a week ago, it would have been obsolete by the time it was posted. In fact, the Blog was mostly written but then on January 8, 2021, the Bureau of Labor Statistics released December’s employment data and many of the predictions we had included flew out the window.
In December, America lost 140,000 jobs net. What does this mean? According to Anirban Basu, President & CEO of Sage Policy Group, Chief Economist for the Associated Builders and Contractors (ABC), and Keynote Speaker at CURT’s upcoming Virtual National Conference, the “nation has officially lost the economic momentum it had been generating since May, with retail sales, employment, and many other indicators moving in the wrong direction.”
According to a January 8th e-blast from Basu (subscribe here), the area that was hardest hit in the employment category in December should come as no surprise – leisure and hospitality. The sector lost almost 500,000 jobs during the month, due to COVID-19 restrictions.
Somewhat offsetting the losses were gains in computer design and associated services (20,300 jobs), motor vehicle and parts dealers (15,000 jobs), and construction, which added a net gain of 51,000 jobs. According to CNBC, the “broad industry is still down 226,000 compared with its February [2020] level, but specific construction worker subgroups, including residential builders, have effectively gained back the jobs lost in March and April.”
This is good news, but don’t jump for joy just yet. According to a January 8th press release from Associated General Contractors (AGC), “few construction firms expect the industry to recover to pre-pandemic levels anytime soon.” AGC’s 2021 Construction Outlook National Survey Results indicate pessimism is prevalent among contractors when it comes to the volume of work that will be available in 2021.
Ken Simonson, AGC’s Chief Economist, echoed this, noting, “December’s employment gains likely reflect milder weather than usual for the month rather than sustained demand for projects. In fact, our survey found contractors expect the volume of work is likely to decline for nearly all non-residential project types, and most firms have experienced project cancellations or postponements.”
Also noted in the press release is that non-residential construction has taken a bigger hit than residential, with residential building and specialty contractors recouping all of their employment losses, while non-residential building, specialty trades, and heavy and civil engineering construction, was 241,000 lower in December 2020, than it was in February of the same year.
Reasons to Celebrate?
Looking to the future, investment bank Morgan Stanley forecasts strong global GDP growth of 6.4 percent for 2021. While rising COVID-19 cases make this hard to envision, the numbers do show that the global economy has been quite resilient. In a December 1, 2020, post named 2021 Global Economic Outlook: The Next Phase of the V, experts at Morgan Stanley note that the V-shaped recovery that they forecasted in their 2020 midyear outlook is now coming to fruition.
Chief Economist Chetan Ahya, says, “We maintain that consumers have driven the recovery, and investment growth – a reflection of the private corporate sector’s risk tolerance and a key feature of any self-sustaining recovery – is bouncing back as well.”
Possibly telling is that in the United States, the U.S. economy has stayed resilient during the pandemic and in fact, despite that weak jobs data on Friday, January 8th, stocks set record highs that same afternoon.
Real Facts in Real-Time
Is it possible to predict what’s to come? On the last day of 2020, Basu shared, “21 Predictions for 2021.” We invite you to read his full report and then make sure to attend the Virtual 2021 CURT National Conference to see how his predictions are performing. Basu will speak Monday, February 8th, at 1:20 pm. Within the conference app, you’ll be able to ask him questions about his forecasts, what has changed since making them, and other topics you’d like to discuss!
Representatives from member companies Aon, Southern Company, Google, P&G, Pfizer, ExxonMobil…and so many more, have already signed up! Have you?
Now – back to Basu. Here are five interesting predictions from his December 31, 2020 report, in his own words:
- The second half of 2021 will be the most dynamic period of economic growth most of us will have experienced in our lifetimes.
- America will finally put together and begin to implement a sensible infrastructure rebuilding plan.
- Recreational travel volumes will come back with a vengeance (book your vacations now).
- Many firms will seek to relocate from expensive city office buildings to modernized Class B space in the suburbs.
- The wedding industry will surge (this is more of a vow than a prediction).
(Of course, when it comes to Basu, we need to end on a fun note – did you notice his pun in point five?).
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