Global Supply Chain Managers Should Brace for GDP Surge, Says IHS Markit

The March U.S. economic forecast from IHS Markit indicates a brightening picture for supply chain managers.

“The imminent enactment of a nearly $1.9 trillion pandemic relief measure—coming against the backdrop of falling COVID-19 infection rates, some relaxation of states’ containment measures, and an acceleration of the national inoculation campaign—encouraged us to maintain our forecast of GDP growth for 2021 at 5.7%, and for 2022 at 4.1%,” says Joel Prakken, chief US economist and co-head US economics, IHS Markit

Chris Varvares, co-head US economics, IHS Markit, concurs, noting that he expects this growth to push GDP past its previous peak by the middle of this year and eliminate the output gap in 2022.

“The previous peak of employment will be regained in late 2022 and the unemployment rate is expected to decline to 3.5% by 2024,”  he says.

“The improved economic outlook has coincided with a notable firming in term yields, halting the depreciation of the dollar. We now expect the dollar to appreciate modestly rather than depreciate further. This will put downward pressure on core inflation in 2022, but nevertheless by mid-2024 inflation will surpass 2%, justifying our call for Fed “lift-off” then,” he concludes.

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