By Philip T. Powell, Indiana University Kelley School of Business associate dean of academic programs in Indianapolis and clinical associate professor of business economics and public policy
When fighter pilots bank their jet for a steep climb, gravity exerted upon the human body suddenly multiplies. “Feeling the G’s” causes disorientation. This best describes what the 2021 economic rebound will feel like to business owners as they navigate through a period of accelerated growth and high demand in the coming months.
Business owners and managers must be proactive instead of reactive. In spite of continued lockdowns and social distancing, leaders must plan in 2021 to quickly accommodate this rapid growth and the higher expenses and constrained capacity that it generates.
Demand will suddenly return with unexpected strength. The Conference Board forecasts real GDP growth of 4.7% in Q2, 6.4% in Q3, and 4.8% in Q4 of 2021. This rate of expansion doubles and nearly triples the 2.2% growth experienced in 2019. Since recovery began in Q3 of 2020, actual growth has consistently beat predictions. Companies need to prepare for a tsunami-like return of business.
Powell’s opinion piece about a 2021 economic rebound is available on the Kelley School of Business blog.