By Patrick Burnson, Executive Editor ·
June 4, 2020
San Francisco –– Global supply chain managers should plan for “a grudging” demand recovery, caution IHS Markit economists.
In an updated U.S. economic forecast 2020 GDP growth has been revised.
While a phased re-opening of the economy is underway, and some activities curtailed by social distancing began recovering in mid-April, IHS Markit says details in its most recent GDP report suggest the economy is contracting at a 43% annual rate during the second quarter — worse than it had previously expected.
Accordingly, they revised down their projection of GDP growth for 2020 to -8.8%, below the current consensus. Unemployment claims also suggest total job losses topped 30 million by May, pushing the unemployment rate to 19%.”
“An effective vaccine may not be widely available until late 2021,” says Joel Prakken, chief U.S. economist and co-head US economics, IHS Markit
Until then, consumers and businesses will be cautious about resuming pre-COVID-19 activities, especially if secondary waves of infection develop.”
In addition, some businesses and their supply chain providers will “shutter” permanently, and other capital will be rendered obsolete by the pandemic, he adds.
“We expect a grudging recovery, with GDP growing 4.6% next year, not surpassing the previous peak until mid-2022, and the economy not regaining full employment until late 2024.”
June 4, 2020
About the Author
Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]
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