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Insights for What’s Ahead
- Near-term consumer spending is slowing down. Consumer spending growth may significantly slow down in the coming months due to the sharp rise in infection rates, new government restrictions on mobility, and fading fiscal stimulus absent a Phase 4 package.
- Vaccine and treatment availability are key to services’ rebound.Widely available vaccines and/or treatments likely will lead to a strong recovery among services industries that are more affected by the pandemic, perhaps by the second half of 2021.
- Spending on goods may remain elevated. Households that have not suffered job losses probably will still be able to maintain high spending on goods, especially leisure-related goods that are perceived as replacements for leisure-related services. Still, a lack of additional government stimulus may reduce spending overall. Manufacturers and importers of leisure-related goods should be prepared for elevated demand through most of 2021, which may decline once the pandemic subsides and consumers go back to spending on leisure-related services.
- Older consumers will be more cautious. Businesses that heavily rely on older consumers, such as travel and lodging, full-service restaurants, and repair and maintenance, should expect a slower recovery in spending from this demographic group.
February 12, 2021 | PUBLICATION
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