Despite a supply chain slowdown and uncertainty in the labor market, business leaders expect economic growth to continue.
“When I think about 2022, again, it’s a year where I think the U.S. economy experiences strong growth, particularly in the first half of the year,” Marci McGregor, a senior investment strategist at Bank of America Merrill Lynch, said. “I do think we’re going to continue to see a moderation in economic growth, again on that sugar high of Covid relief. But when I take a step back and look beyond next year, I do think that our economy can stay above (the) historic trend growth, as we look ahead to 2023 and beyond.”
Ms. McGregor was the keynote speaker for the fourth annual Market Watch Business Summit, presented by the Daytona Beach Regional Chamber of Commerce and Team Volusia Economic Development Corp. at the Hard Rock Hotel Dec. 2.
Also speaking at the summit were panelists Mana Shahsavari, a business services representative for CareerSource Flagler/Volusia; Lenny Sanclemente, a corporate purchaser and operations manager for ICI Homes; and Robert Utsey a senior manager for business development at Gilbane Building Co.
Covid-19, lockdowns, the workforce’s new interpretation of work-life balance, supply-chain issues, and a hopeful 2022 economic outlook were themes they weaved throughout their presentations.
The Covid-era economy hit women particularly hard, “shecession,” a word the New York Times had never printed until May 2020, has become part of the economist’s lingo.
“Shecession refers to so many working women who were forced out or opted out of the workforce due to either loss of work or limited family resources and choices.” Ms. Shahsavari explained.
Also, workers have begun to place a higher value on the YOLO concept (You Only Live Once) leading to the Great Resignation and a good deal of early retirements.
Those who resign are not necessarily dropping out of the job market. Many are using the YOLO concept and opting for relocation to areas of the country that have a better climate or better quality of life. Florida is often the choice they make to relocate.
The migration to Florida was happening pre-pandemic. The virus and more people working remotely motivated an even larger number of people to call Florida home. Recent estimates range between700 and 900 people per day move to Florida. Move.org stated Florida was the number one state Americans moved to in 2020.
Long-time residents know Volusia County has welcomed its fair share of the relocators. Volusia’s population growth rate for 2021 is at 1.28% while the state’s growth rate was 1.08%.
The virus hastened the relocation and created a group of people who are unable to work. Ms. Shahsavari capsulized why the Bureau of Labor Statistics reported 3.8 million people as unable to work in October.
“They cannot go back to their work because either their offices are closed, or the business was shut down due to the pandemic,” she said.
When a worker does find new employment typical concerns, such as higher pay, career progression and well-being provisions, are combining with diversity, sustainability, philanthropy, social impact and authenticity to drive their decision to join a firm.
Looking towards 2022, what can a business do to attract workers? Ms. Shahsavari suggests.
•Write updated job descriptions that includes culture, mission and vision
•Hire and recruit with diversity as a top priority
•Make the employees experience top of mind for a healthy work-life balance
•Use social media to attract new talent
Mr. Sanclemente picked up on the hiring theme by mentioning the aging out of construction workers and offered that people look to construction as a career path.
The supply chain problems that have left consumers searching either for the product they love or a reasonable alternative, also hit construction.
Fysh Bar and Grill in Port Orange has experienced construction delays. The soon to be Riverwalk restaurant had to reschedule its December opening to either February or March. Developer Villa Nova 8.0 could not commit to housing prices for their proposed Port Orange townhouses partly due to the backed-up supply chain.
ICI Homes is no exception, Mr. Sanclemente said.
“In the summer of last year, is kind of when we started seeing the issues with supply chain, lead times starting to extend,” he said.
For instance, ICI Homes has waited nine weeks for window deliveries that typically were delivered in four weeks. At times, they have waited 20 weeks for appliances, 24 weeks for windows and 34 weeks for sliding glass doors.
Mr. Sanclemente offered a way for businesses to solve this issue. The hiring of a supply chain agent. “I see it on the want ads all the time now. You’re seeing supply chain analysts,” he said. “Just somebody whose sole job is to try to find something.”
Freight costs have gone up 300 to 400%. In nearly every case, those additional costs get passed on to consumers.
Still, the migration has been beneficial to developers. ICI has experienced an increase in construction work and will begin the second phase of Woodhaven in Port Orange.
As the panel detailed, it is a gloomy exercise to review economic performance for the past two years. However, they have a hopeful outlook for 2022 and beyond.
ICI is hopeful for next year as they expect about 22% more closings and even bigger success in closings for 2023.
On the commercial side of construction, Mr. Utsey expressed how busy Gilbane has been, highlighting a corridor from Jacksonville through Daytona and on into Tampa. This translates to good news because construction only happens when business and residential investors trust they can sell or rent that new house or commercial space. In other words, they project a strong economy and view people as ready to spend.
Ms. McGregor highlighted this optimism by noting the “U.S. economy is almost experiencing this mini reopening, this mini springboard of growth.”
She expects 6% GDP growth in the fourth quarter. By comparison, it was 4% in the fourth quarter of 2020.
“I think 2022 is the year where the U.S. economy is going to lead the global economy, in terms of strength, in terms of growth,” she said.
She does not believe the Omicron variant will weigh heavy on the economy as each Covid wave has had a lesser impact. She referred to the increasing resiliency of Americans in the face of these variant waves as a plus that will help mitigate Omicron.
