CU economist: Road to recovery likely slow but steady
While the rollout of the COVID-19 vaccine provides hope for a robust economic comeback, one local economist is warning that a recovery could be a gradual process over the next year or so.
“We have a fairly long road back at this point,” Rich Wobbekind, associate dean and economist at the University of Colorado Boulder Leeds School of Business, said Tuesday during a keynote speech at BizWest’s virtual Economic Forecast.
Wobbekind predicted that it could take until the fourth quarter of 2021 to reach the pre-pandemic peak gross domestic product posted in the final quarter of 2019.
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Colorado business leaders appear to be thinking along the same lines. According to CU’s quarterly business confidence survey, leaders are bracing for a rocky Q1, followed by improvements during the second half of 2021.
While business owners may be starting to feel a bit more confident, consumers are still feeling quite wary, Wobbekind said.
“Seeing is believing,” he said about consumers waiting for vaccines to prove effective before returning to stores and restaurants.
Still, “there’s pent-up demand out there for when things get a little more normal,” he said, boosted by low rates of spending and high rates of saving during the pandemic.
Job growth is creeping upward and is expected to accelerate in late 2021 as the COVID-19 vaccine becomes more accessible, Wobbekind said.
Vaccine success is especially critical for recovery in the leisure and hospitality industry, which took a devastating hit from COVID-19 and its related restrictions.
“It’s been a tale of two different worlds in terms of the industries that have been impacted and those that have not,” he said. Hospitality certainly has felt the impact more than most sectors.
Wobbekind said he hopes the continued rollout of the 5-Star program, which allows certain establishments to increase capacity, will help businesses survive.
Fostering business survival is quite possibly the most pressing concern for economists, he said.
“Maintaining the business infrastructure is the single most important thing we can do,” Wobbekind said.
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