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Grading my Predictions for 2021
On December 31, 2020, I posted “21 Predictions for 2021.” A year later, it’s time to grade them. One should be held accountable. Also, this will give you some sense of how much weight to give my predictions for 2022 (which are coming later this week).
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Now, on to the grades (predictions are indented and by category):
The second half of 2021 will be the most dynamic period of economic growth most of us will have experienced in our lifetimes.
Even as the economy recovers, U.S. equity markets give back some of their gains as inflation, deficit, and interest rate concerns mount.
Stupid delta variant. Through June, it looked like the prediction regarding the second half of 2021 would be spot on (GDP expanded at a 6.7% annual clip in Q2, payroll employment was up 2 million+ in June and July, etc.). But Delta interrupted momentum and sent global supply chains back into a tizzy. Financial markets performed better than I thought given all the disruptions and inflationary pressures. Who could have predicted that? But note, lots of year-end volatility and the market suffering some major down days.
Bankruptcies among retailers, department stores, and REITs continue in large numbers as the year progresses.
Commercial construction will be challenging, particularly with respect to building of new structures.
We will spend less than ever on the construction of churches.
Construction input prices will increase by >2% this year.
America will finally put together and begin to implement a sensible infrastructure rebuilding plan.
I thought there would be a few more bankruptcies in 2021, but retail activity frankly blew my expectations away. Commercial real estate owners that found themselves in financial straits were able to sell properties in an extremely liquid market. Commercial construction was challenging. Spending on religious construction continues to slump. Input prices screamed higher. We passed infrastructure.
The supply of homes for sale will remain below March 2020 levels.
Suburban home prices will continue to rise in the context of continued outmigration from cities.
Housing starts will reach levels not observed since the mid-2000s.
There will be an immense amount of design work seeking to position vacant retail space for adaptive reuse.
Nailed it. The housing market remained red hot in 2021 as inventory plummeted and mortgage rates remained low (since March 2020, active listings are down 45% and home prices are up roughly 20%). Good job, me.
Recreational travel volumes will come back with a vengeance (book your vacations now).
Business travel will not, at least not to the same extent.
Total nailage. A tale of two worlds in travel. People released pent-up demand for Florida and other destinations, but a lot of business continues to transpire on Zoom. For the week ending 12/19/2021, TSA throughput was up 127.5% from 2020 but still down about 17.7% from 2019.
Many firms will seek to relocate from expensive city office buildings to modernized Class B space in the suburbs.
Many workers will demand the opportunity to work from home several days a week.
Many employers will accede to such demands; but will also hold back raises to preserve cashflow.
Yeah, these were good but not perfect. I expected to a see a bit more outmigration from city office buildings, but many firms continue to maintain their leases and are waiting for expiration, which is years away in some instances. I nailed the labor force though, with about two-thirds of workers indicating they prefer to work remotely.
Consumption, etc. (A+)
Surviving apparel retailers will enjoy substantial sales volume growth.
There will be a significant number of nurses who leave the workforce.
The wedding industry will surge (this is more of a vow than a prediction).
Sales of electric vehicles will skyrocket.
Many kids will begin hoping for fewer snow days.
Yep, got it again. Nothing wrong here. Retail sales at clothing stores are up 17% since the start of the pandemic. Year-to-date EV sales through 2021’s third quarter were up 88% over 2020, according to Kelley Blue Book. Remarkably, some nurses left the workforce because of vaccine mandates. Not sure I saw that coming, but still nailed the prediction. Full marks for me.
I’ll have my 2022 predictions out sometime before the end of the year, for better or worse.
My 2022 presentation is called No Time to Buy, and yes, the theme is James Bond. If you want to book a presentation (in person or virtual), please contact my assistant Julia (email@example.com).
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