4/21 Blog Topic: Vaccinated and ready for “action”
April, 2021
| As you have no doubt heard, the US economy is back to its booming self. The most recent report of 6.4% gross domestic product (GDP) growth for the first quarter exceeded economists predictions and on an annualized basis would represent the fastest rate of growth since 1984. We know that vaccines, reopenings, huge federal stimulus, and pent-up spending are fueling the recovery at this faster rate. It is yet another example of how consumers drive the U.S. economy, and why I stated on KTVU news that Marin County’s recovery would be highly dependent on a “resumption of consumption.” So here we are . . . and this is where we think the action for Marin businesses will be. GDP growth is being led by spending in durable goods, and while many categories experienced an uptick during the pandemic, recent increases in consumption are due to federal stimulus and re-employment for many individuals. Goods categories with the most demand include, but are not limited to: cars (+15% over 2019 peaks), household goods (+17%), and recreational goods (+26%). Cities in Marin that are home to these types of retailers, especially San Rafael, Corte Madera, and Novato, have been experiencing an uptick in action. It’s important to note that customers of these goods don’t just reside in Marin, many are from surrounding Bay Area counties, or even other states purchasing online (more on this later). Besides retailers, much of the Marin economy is composed of in-person services companies, which were hardest hit by government shut-downs, and responsible for most of the job losses that occurred. MEF researched the in-person services categories nationally to identify trends or predictions. Some of the most useful data comes from a recent report by Cardify, which surveyed credit card holders on future spending in services categories. The charts below are a great barometer of where consumers are planning to spend money on services.    All tables produced by Cardify AI (www.cardify.ai) Given the high rate of vaccination in Marin County, MEF expects spending in these categories to be robust, giving further confidence in an expedited recovery. But the restoration of spending at local businesses is only part of the “action” we are talking about here. The other action we hope to see is our policymakers and business leaders learning from the pandemic and purposefully planning the Marin economy in way that allows us to be less dependent on our local consumers and better oriented towards future growth sectors that not only proved resilient through the pandemic in terms of growth and job gains/retention, but also will shape future consumption patterns (think about the proliferation of grocery and food delivery in Marin). Trends like remote/distributed workforces, digitally shifting services like banking and healthcare, and more direct-to-consumer business models are both and opportunity and a threat to the Marin economy. “Action” from the MEF perspective doesn’t just mean more shopping, which our local businesses do need us to do and we will. Action also means proactively developing an approach towards strategic growth, more middle and high skill job opportunities, and a resilient economy that can potentially insulate from future economic shocks. |
Mike Blakeley, CEO
Marin Economic Forum
Tags: blog
