IHS Markit Economic Forecast Contains Cautionary News for Supply Chain Managers

San Francisco -- Global supply chain managers should plan for “a grudging” demand recovery, caution IHS Markit economists.
In an updated U.S. economic forecast 2020 GDP growth has been revised.

While a phased re-opening of the economy is underway, and some activities curtailed by social distancing began recovering in mid-April, IHS Markit says details in its most recent GDP report suggest the economy is contracting at a 43% annual rate during the second quarter — worse than it had previously expected.

Accordingly, they revised down their projection of GDP growth for 2020 to -8.8%, below the current consensus. Unemployment claims also suggest total job losses topped 30 million by May, pushing the unemployment rate to 19%.”

“An effective vaccine may not be widely available until late 2021,” says Joel Prakken, chief U.S. economist and co-head US economics, IHS Markit

Until then, consumers and businesses will be cautious about resuming pre-COVID-19 activities, especially if secondary waves of infection develop.”

In addition, some businesses and their supply chain providers will “shutter” permanently, and other capital will be rendered obsolete by the pandemic, he adds.

“We expect a grudging recovery, with GDP growing 4.6% next year, not surpassing the previous peak until mid-2022, and the economy not regaining full employment until late 2024.”

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