Despite being faced with contradictory rules and policies related to COVID-19, the U.S. economy is gaining positive economic momentum. Some states remain under wide-ranging restrictions from severe lockdown to near completely open and a return to full economic activity. Stimulus spending by the federal government ($5.7 trillion since the advent of the pandemic) has provided consumers and businesses some financial respite, along with a large dose of financial cronyism, from the economic lockdown:
- The Federal Reserve has maintained low-interest rates and is providing significant liquidity.
- Existing home sales and working remotely are helping to fuel vigorous residential remodeling spending.
- New home construction remains close to traditional levels, and along with manufacturing, is providing drive to the overall economy.
- Employment is growing, as is consumer spending.
- COVID-19 vaccinations are increasing, driving the U.S. closer to herd immunity, which will help further open portions of the U.S. economy that are closed or restricted (travel, hospitality, etc.), further boosting economic activity.
- Energy costs are rising but remain manageable.
- Government spending in the near-term will be a boost to growth.
The following issues will restrain economic growth in the U.S. and pose a threat to the recovery continuing:
- COVID-19, or its variants, could spiral out of control, creating a major pandemic, triggering supply chain disruptions, unemployment, renewed restrictions, and a worldwide recession.
- Corporate profits are weak due to China tariff costs and a weakened U.S. economy.
- Tariff negotiations could devolve into a major trade war.
- Wrong-headed energy policies could threaten energy costs and the electric power grid.
- Consumer debt share of disposable personal income and federal debt are rising.
- The huge U.S. government deficit could have unintended consequences that threaten U.S. economic stability, interest rates, and the U.S. dollar.
Comparing the U.S. FLOOReport – 2021 Edition flooring forecast dollar value consumption percent change with the calculated full-year 2020 results indicates that all U.S. flooring type sales are performing as forecasted, except for ceramic tile, which is declining faster than expected. Ceramic tile may be struggling with the logistical disruption caused by Chinese supply being cut-off due to tariff infractions.
Santo Torcivia is president of Market Insights LLC in Reading, Pennsylvania. He can be reached at 610.927.2299 or email@example.com.
This is a summary of the March 2021 Quarterly Market Monitor Report published by Market Insights LLC. NWFA members have exclusive access to the full report, which provides forecasts and analysis of economic, market, and industry conditions and trends affecting the North American flooring market. The report includes a historical and forecasted volume of dollar sales of total wood flooring (at mill sell price) per metro area and state. Separate reports are available for the United States and for Canada. The availability of the reports on a quarterly basis will provide NWFA members with current data that can help them develop business plans, prioritize inventory, and react to market conditions in a timely manner. NWFA members may download the full report by visiting nwfa.org.