CAMX 2020 concluded on Thursday, September 24 with Good Day, CAMX! and an address by keynote speaker Joel Whitehouse, Corporate Development Director of Hill & Smith Holdings. Mr. Whitehouse used his presentation to present attendees with a global outlook on the 2020 economy and what may lie ahead in 2021 and beyond.
“The global economic view…continues to develop on a daily basis,” Whitehouse said. “Coronavirus continues to dominate the economy and global financial markets,” he added. Even though it is likely to be a challenging two to three years for the global economy, 2021 will likely see less need for lockdowns and social distancing if progress continues to be made with a vaccine, he noted.
Whitehouse discussed that while second quarter gross domestic product (GDP) does show extensive declines, the monthly information since then shows a rapid pick up, and a “decent” third quarter is likely for most economies.
In looking at high level trends, Whitehouse said that according to economists, global GDP forecasts are 3.9% this year and +5.6% for 2021, with inflation rates normalizing. In positive news, Whitehouse shared that the SNP 500 and Nasdaq have both hit record highs within the past month.
In focusing on the U.S. economic view, Whitehouse commented that a strong rebound in activity levels over the third quarter is expected, equating to a 25% annualized GDP following the GDP collapse in the second quarter. “Economists have an expectation for third quarter GDP growth and for 2020 to forecast a contraction of -4.9% and GDP growth of +4.2% next year,” he said. Whitehouse also noted that the upcoming U.S election will have an impact on recovery, as there are clear differences in approach between the two parties.
When breaking down certain industrial sectors of the U.S economy, Whitehouse noted the COVID-19 pandemic negatively impacted growth rates of all the major end U.S. markets. The construction sector, specifically, is projected to be down 10-20% in 2020, but recovering its growth rate between 5-7% in 2021.
Expanding on the U.S. construction and infrastructure markets, Whitehouse commented that at the outset of COVID-19, many of these projects continued fairly well, noting that transportation has generally become easier due to decreased traffic volumes, and the fact that contractors and suppliers were deemed as essential businesses.
As the country deals with the pandemic longer, however, additional factors may have an impact. This includes reduced productivity rates and decreased state level funding for infrastructure projects that may hinder additional growth. “Nevertheless,” Whitehouse said, “U.S. infrastructure has high growth potential from the increasing need of people movement, replacing of aging structures and to provide resiliency to extreme weather events.”