What You Need to Know
- 70% of respondents expect the number of employees working in offices will never return to its pre-COVID level.
- Over 80% expect a long-term impact on hotels and airlines and 86% favor vaccination mandates for air travel
- Supply chain issues are seen as transitory but wage pressures longer lasting.
The coronavirus pandemic will have a long-lasting impact on the U.S. economy, according to the latest economic forecast from the chief economists at 27 large, established financial firms compiled by the Securities Industry and Financial Markets Association.
According to SIFMA’s survey of economists conducted between Nov. 15 and Dec. 3, close to 70% of respondents expect employees will never return to their offices at levels that persisted pre-COVID due to a lack of child care or school closures, the choice to work from home, lingering health concerns and fears of contracting COVID.
Slightly less than half (44%) expect consumers will shy away from high-density activities after vaccinations are “distributed en masse” — the phrase isn’t defined, but to date 70% of Americans are fully vaccinated — and 44% expect they won’t.
In the travel arenda, ninety-two percent of respondents expect to see a lasting or permanent negative impact on hotels, and 83% expect the same for airlines, due to changed consumer behaviors.
What Your Peers Are Reading
Eighty-six percent of respondents favor a vaccination requirement for airline travel, return to offices, and at movies, plays and sporting events — all up from levels reported in SIFMA’s midyear survey.
“First and foremost the virus remains the key source of uncertainty, followed by extended inflation and of course supply chain disruptions,” according to the report’s introduction from Lindsey Piegza, Ph.D., chief economist and managing director at Stifel Financial and chair of SIFMA’s Economic Advisory Roundtable, whose members were surveyed.
Piegza noted that Stifel economists expect inflationary pressures due to supply chain issues will be transitory though wage pressures, which tend to be “stickier,” are not.
“Supply chain disruptions will ease when countries around the world are able to control the virus or feel comfortable with returning to ordinary life despite the virus,” said Piegza. But he lamented, “We are likely to be dealing with the virus for the next couple of years.”