U.S. & QC economies in midst of transformation

The U.S. and regional economy are moving to a post-pandemic recovery and are poised to be the strongest ever.

During the Quad Cities Chamber’s 2022 Economic Forecast, presented by IMEG Corp. and Mediacom Business, RSM Chief Economist Kevin Depew encouraged regional leaders to take a long-term view of the economy. While we are living amid a pandemic, experiencing rising inflation and supply chain disruptions right now, the U.S. economy is in the middle of a transformation, the most significant transformation since the Industrial Revolution.

“What I see are the structural conditions of an economy poised to be the best it has been in its lifetime,” he said. That foundation was built during the past 20 years, a period in which the country experienced 9-11, the dot.com crash, a debt bubble and financial crisis, a polarized election and now a pandemic.

“It is completely understanding if your perception of the economy isn’t great right now. The flip side of that is to consider all the things that have happened in the last 20 years. My perception isn’t that our institutions are weak, prone to failure and on the brink of disaster, but instead, look how robust they are to withstand those things,” he said.

Here are some predictions Depew offered during the forecast:

• GDP will experience robust growth, far beyond the pre-pandemic period. RSM forecasts 4.2 percent growth next year, and 2.5 percent in 2023. In contrast, the average GDP growth rate from 1945 to present was 1.8 percent.
• Inflation will continue to recede and likely drop to 2.9 percent by the end of 2022.
• Employment growth is solid. Wages are rising for the bottom two quintiles of earners who have been left out of any type of wage gain for the last 30 years.
• There will be a business awakening as capital expenditures catch up to where they were expected to be prior to the pandemic.
• Infrastructure investment is closing the urban vs rural divide, which was mending prior to the pandemic, but now, even more so. Capital expenditures will provide the needed services businesses need to open, expand and relocate to new areas.
• A transformation is taking place in business and industry, fueled by the lower cost of automation and robotics, which will eliminate many jobs. The federal government must make this a policy consideration and put tools in place.

Watch this video to get a quick recap from Anna Kyer, RSM Audit Partner.