Economic Insights

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Economic Insights

Following are details on U.S. economic growth projections for the next 5 years; expert opinions on how politics and the U.S. presidential election may impact the economy; how COVID has impacted companies approach to corporate social responsibility; consumer trends that have come about as a result of the pandemic; growth data for the hotel, senior care, and auto manufacturing industries; and news related to several companies of interest within those business sectors.

Although there is an extensive amount of data included, a few highlights include 2021 GDP growth is expected to be the highest of the next 5 years; many experts believe the outcome of the election will have little impact on the economy, although a contested election or other political crisis could have a large impact on the markets; consumer have expectations that businesses will help resolve social issues (such as the pandemic) even if they did not cause it or are not directly involved; and both the hotel and auto manufacturing industries in the U.S. are not expected to reach pre-pandemic levels till at least 2023.

U.S. Recovery Growth Projections

One Year (2021)

  • After being projected to shrink by 5.9% in 2020, the Congressional Budget Office (CBO) forecasts that the GDP will grow 4.8% in 2021.
  • The Conference Board predicts that DGP will shrink by 7.0% in 2020, and will increase by 1.0% in 2021.
  • Trading Economics predicts GDP growth of 1.7% in 2021.
  • The Federal Open Market Committee (FOMC) predicts GDP growth of 5.0% in 2021.
  • S&P Global predicts 2021 GDP growth in the U.S. to be 5.2%.
  • PwC predicts GDP growth of 4.2% in 2021.
  • The World Bank predicts U.S. GDP growth in 2021 to be 4%.
  • To give an idea of the overall view of the economy in 2021, the average of the above projections can be calculated. Here and for the following years, this is done by adding the projections and dividing by the number of projections.
  • The average 2021 growth projection based on the seven projections above is 3.7%.

Three Year (2023)

  • The CBO forecasts GDP growth will be 2.2% in 2023.
  • Although specific years after 2022 are not specified, the FOMC's latest economic projections peg longer term GDP growth in the U.S. at 1.8%.
  • S&P Global predicts 2023 GDP growth in the U.S. to be 2.8%.
  • PwC predicts GDP growth of 1.8% in 2023.
  • Deloitte published data on three possible scenarios for the U.S. recovery, but they consider the base projections to be most likely, with 70% certainty of occurring. Therefore, those numbers are used here. Their projection is that GDP growth in 2023 may be in the 7-8% range, so we will use 7.5% for our average calculation.
  • The average 2023 growth projection based on the five projections above is 3.22%. Of note, Deloitte's projection is an outlier compared to the other forecasts, and if it is excluded, the average is significantly lower, coming in at 2.15%.

Five Year (2025)

  • The CBO forecasts GDP growth will be 2.1% in 2025.
  • Although specific years after 2022 are not specified, the FOMC's latest economic projections peg longer term GDP growth in the U.S. at 1.8%.
  • PwC predicts GDP growth of 1.8% in 2025.
  • Fitch puts 5-year U.S. GDP growth at 1.4%.
  • The average 2025 GDP growth projection for the U.S. based on the four projections above is 1.775%.

Predicted Impacts of U.S. Election on the Economy

Election Outcome Has Minor Impact on Economy

  • According to detailed research by BBVA Research, "economic conditions that prevailed over the past decade to [will] remain largely the same regardless of who wins in November." The report can be downloaded in its entirety here, and data used in this report has been included in the attached Google document.
  • The primary reason for this is that it is very difficult for administrations to enact bipartisan legislation without a unified government (page 6-7).
  • Even if the democrats win the White House and Senate, and maintain control of the House, it is unlikely they will obtain a supermajority in the Senate, which means legislation will still be difficult to pass (page 6-7).
  • BBVA Research has been around since 1932 (formerly known as Research Service). They are "a benchmark for research and economic analysis in different countries in the Americas, Europe and Asia. Its team of over 100 analysts produces reports and forecasts in over 10 countries." The report was produced by all six members of their U.S. team

Possible Political Crisis

  • Tina Fordham writes in The Financial Times that although "there is some evidence that equity markets prefer Republican victories," her discussions with business leaders shows that there are bigger concerns around a democratic crisis, perhaps Trump refusing to step down if he loses, or a contested election result. Either of these scenarios could have a large impact on the markets.
  • According to an article in Reuters, some financial experts predict that there could be a large sell-off in the markets in the case of a contested election. Investors are showing signs of nervousness, with one example being some "have rolled out their hedges to the end of the year in part because of concerns about the election process."
  • Tina Fordham has extensive experience in the area of geopolitics and markets, and was a chief global political analyst at Citigroup from 2003 to 2020. April Joyner, a contributor to the Reuters article, is a markets correspondent for Reuters, and has extensive experience researching and writing about financial markets.

Political Uncertainty

  • A study published in 2019 looked at how uncertainty around presidential elections in the U.S. manifest in the options market.
  • The authors reported they "estimate a significant average increase in price and tail risk as well as the expected return across firms, regardless of their political features, in the narrow period prior to the presidential election, relative to a carefully defined benchmark period. In particular, the annualized implied volatility of at-the-money options exhibits an average increase of approximately 5.5%."
  • It was also found that uncertainty continues for a brief period after the election, when the president-elect's policies and priorities have not yet been clarified. Although the increases are smaller than those prior to the election, they are still statistically significant.
  • The results of the study are consistent with previous studies that demonstrate "the increase in stock return volatility in election years."
  • Alexandros Kostakis is a professor of finance at the University of Liverpool and his research has been published in several scientific journals. Konstantinos Gkionis is a research associate at Alliance Manchester Business School and is also a PhD student at Queen Mary University of London. Konstantinos Stathopoulos is a professor of accounting and finance at Alliance Manchester Business School and also has extensive research credentials.

Short Term Volatility

  • Dr. Shane Oliver of AMP Capital published an article stating that there could be increased market volatility leading up to the presidential election in the U.S. Specifically, he expects that volatility to increase if it looks likely that Biden will win and/or Trump acts to increase tensions with China.
  • Oliver also states that the economy is unlikely to be weaker in a Biden presidency, and that data shows shares typically "have performed better under Democrat than Republican presidents."
  • Data shared in the article also shows that the only time incumbents have lost reelection in the U.S. is when there had been a recession in the prior two years. The chart shows that of the six times a recession has occurred, the incumbent was only reelected once.
  • Dr. Oliver is the head of investment strategy and a chief economist at AMP Capital in Australia, and he has been with the company for 19 years.

Business Approach to Social Issues

Consumer Expectations

  • The China Europe International Business School (CEIBS) conducted a survey of 1,021 Americans to determine what their expectations were for businesses in light of the COVID-19 pandemic.
  • The survey found 94.1% of respondents agreed that "businesses have an ethical responsibility to help combat the coronavirus epidemic."
  • Also of note to firms looking how to respond, 58% of respondents believed companies should put the "interests of the communities battling the epidemic" first, followed by employees' interests (32%), and business owners' interests (10%).
  • The survey also looked at how firm's responses would impact consumers purchasing their products.
  • A ranking of American businesses on how they responded to the pandemic in terms of corporate social responsibility found Verizon at the top of the list, followed by Target, AT&T, Walmart, and T-Mobile.

Community Services and Relief

  • JUST Capital has been tracking how the largest employers in the U.S. have been responding to the COVID-19 pandemic since March, and, as of June, they were tracking over 300 companies. They found that 52% of the companies have offered some type of community services related to the pandemic, and 51% have created or contributed to community relief funds.
  • One example of community services are stores offering special shopping hours for senior citizens and/or first responders. Companies that did this include BJs, Costco, Giant Eagle, Meijer, and Publix.
  • Other examples of community services offered include Kroger "temporarily waiving the check-cashing fee for government-issued checks;" Starbucks working with Operation Gratitude to send care packages to first responders; and Comcast offering free Internet Essentials to new customers for 60 days, along with increasing the speed of the service for all customers.
  • In terms of community relief, examples include Ford announcing a donation match program for up to $500,000; Amazon donating $10 million in PPE supplies; and Citi providing over $65 million in grants and charitable contributions.

Free Logistics Support

  • While 54% of the largest companies tracked by JUST Capital offered production, distribution, or logistical support during the pandemic, many smaller companies are also offering free logistics services to help those struggling to meet supply chain challenges.
  • Symphony RetailAI created a portal that contains "data-driven insights cover consumer behavior trends, merchandising challenges and implications of the pandemic on global supply chains." The portal is free to access and can help retailers make decisions moving forward.
  • Fit to Pass made their "commercial driver’s license (CDL) driver support hotline" available for free for 6 months. The service provides access to professional mental health coaches and could be crucial to drivers dealing with increased stress and workloads due to the pandemic.
  • Additionally, retailers have made adjustments to change the way deliveries are made, with "a 20% increase in consumer preference for contactless delivery."

COVID-19 Consumer Trends

  • All the trends included below were chosen because they represented a change in consumer behavior from pre- to post-pandemic. Most of the data is based on consumer surveys, but expert opinion was also considered when determining which trends to include.


  • Ipsos conducted a survey on behalf of Generali Global Assistance and found several trends related to consumer travel.
  • One finding is that as a result of COVID, Americans are traveling more domestically to destinations that are within driving distance.
  • The survey also found that there is a greater preference for private rental (33%) as compared to last year (17%). However, hotels were still the most popular accommodation, with 46% of Americans saying they would stay at a hotel this summer.

Mindful Shopping

  • According to survey data published by McKinsey, 40% of Americans are "becoming more mindful of where I spend my money," 31% are "changing to less expensive products to save money," and 21% are "researching brand and product choices before buying. All of these numbers represent the percentage of respondents who are taking these actions more since the pandemic.
  • The survey found only three areas where Americans planned on spending more post-pandemic than they did pre-pandemic. These were groceries, household supplies, and home entertainment.
  • The areas that American consumers expected to pull back spending the most were restaurants, jewelry, accessories, furnishings, appliances, consumer electronics, vehicle purchases, international flights, hotel/resort stays, and domestic flights.

Car Sales

  • Online sales of vehicles for one U.S. retailer, Group 1 Automotive, tripled to 7.3% in April 2020, compared to 2.5% prior to the pandemic. Group 1 has more than 100 dealerships in 15 states.
  • One smaller dealer with four dealerships in the south, found that 80% of sales are now starting online. However, less than 25% of American consumers are willing to conduct a car purchase entirely online.
  • Although the majority of this article in the Wall Street Journal is behind a paywall, the part that is visible reports that used car sales dropped 38% in April, but then "rose 17% above the pre-pandemic forecasts."
  • From July 2019 to July 2020, new car sales were down 9.5%.
  • Data from Deloitte indicates that 47% of U.S. consumers plan on pushing out their next vehicle purchase.

Jump in Online Sales

  • Since the beginning of March, which was used as a baseline, online purchases of general merchandise have increased about 30% as of the end of July. In the same period, in-store purchases declined about 8%. These numbers were read from the Shopping Activity Changes and are not exact.
  • Digital Commerce 360 reports that online sales grew by 76% in June 2020 as compared to June 2019. With the lock downs across the country as well as many consumers choosing to stay home, it is easy to see why online sales are booming.

Virtual Entertainment

  • Vulture has been updating a list of live entertainment that has been canceled or postponed due to COVID-19 and the list is extensive.
  • It was reported in the Hollywood Reporter that the global entertainment industry will lose an estimated $160 billion due to COVID-19 over the next 5 years. It is easy to see why companies are looking for ways to bring entertainment to consumers virtually. Pollstar estimated that the music industry alone could lose an estimated $8.9 billion this year if live concerts are not allowed to take place through the end of 2020.
  • Grand View Research published a market report in July 2020, which includes the impact of COVID, which predicts that the virtual events' industry will grow at an annual rate of 23.2% through 2027.
  • Many artists stayed engaged with their fans by streaming performances online. Artists that did this include Miley Cyrus, Diplo, The Roots, Garth Brooks, and H.E.R.
  • The pandemic has given a major boost to the Stageit platform, which made $884,000 during 2 weeks in March/April 2020 as compared to $500,000 in all of 2019.

Hotel Industry


  • Revenue per Available Room (RevPAR) is a commonly used metric used in the hotel industry to measure hotel performance.
  • STR projects that RevPAR for the hotel industry in the U.S. will decline 50.6% in 2020, and will increase 40.6% in 2021. These figures are year-over-year. Additional relevant figures from 2019 through 2021 can be seen in the following chart.

Need for Outside Consultants

  • The South Dakota Department of Health published a checklist of what hotels will need to consider in order to get back to business post-pandemic. In reality, this list is relevant to hotels outside of South Dakota.
  • The categories are broad but include managing employee health, cleaning & sanitizing, administrative controls, work practices, and social distancing. It is unlikely that hotels will have all the expertise they need in house to correctly and efficiently implement the new policies needed, and this could provide opportunities for outside consultants.
  • Social distancing consulting is already thriving and companies from a wide swath of industries are making a mark in the space. Companies and people from the restaurant design, architecture, moving, marketing, and technology industries have pivoted to provide social distance consulting, and it is likely these services will be in high demand.

Senior Care Industry


  • Data Bridge Market Research forecasts that the global compound annual growth rate (CAGR) for the elder care market will be 7.0% through 2027, reaching a total of $1,944,028.05 million. The market size and growth rate for the U.S. alone was behind a paywall.
  • By using a reverse CAGR calculator, we can estimate that the 2019 global market size for the elder care industry was $1,131,442.02 million.
  • An article in Entrepreneur India stated that the Indian senior care market was about $7 billion, or 1% of the U.S. market size. From that data, the U.S. market size is estimated to be $700 billion ($7 billion x 100). Although no year was given for the data, we are assuming it was from 2018-2019, as the article was published in May 2020.
  • Therefore, in 2019, the U.S. was estimated to account for 62% ($700 billion/$1,131,442.02 million) of the global elder care market. With such a large share of the market, it is likely that the 7% global growth rate is close to the growth rate for the U.S.

Need for Outside Consultants

  • Although no direct reporting was found on the need for outside consultants in the senior care industry post pandemic, there was a significant amount of reporting on how nursing homes were disproportionately impacted by COVID. The New York Times reported in May that one-third of coronavirus deaths in the U.S. were residents or workers at nursing homes.
  • The BBC reported in July 25% of U.S. deaths happened in nursing homes. The "Foundation for Research on Equal Opportunity found 45% of US Covid-19 deaths came from nursing homes." This is especially shocking since nursing homes only account for 0.6% of the U.S. population.
  • While trying to control outbreaks, facilities are spending more money. For example, in New Jersey, expenses were about 20% higher per month in nursing homes, while revenue was down about 20%.
  • As described in this article on Just Care, nursing home care will likely be changing as a result of the pandemic, and the facilities will need experts to implement the changes that will be most effective and cost-efficient.

Automotive Manufacturing Industry


Need for Outside Consultants

  • As with the hotel and senior care industry, no direct reporting was found on the need for outside consultants in the auto manufacturing industry post-pandemic.
  • However, while many production lines are back in operation, plants are dealing with high absenteeism either due to employees not showing up to work or an increase in the number of COVID cases. It is possible that outside consultants will be needed in order to convince employees that it is safe to return and/or implement policies and procedures that actually keep employees safe.
  • According to PwC, the industry could also face supply chain challenges. Agility and planning are key to ensuring there are no negative impacts from supply chain impacts. This is another area where consultants may be needed.

Specific Business Growth

  • For the specific businesses here, we searched news reports, annual reports, and market studies to find any mentions of projected U.S. growth for each business, post-pandemic. In most cases, projections were not available. In those cases, general statistics on growth during the pandemic, as well as news stories related to the pandemic, are provided as an alternative.


  • In the first quarter of 2020, Marriott's North American RevPAR declined 19.5%. This compared to an international decline of 30.4%.
  • Although the majority of this article is behind a paywall, the headline and summary does indicate that the U.S. occupancy rate for Marriott's open hotels in the U.S. exceeded 20% by the end of May.
  • Marriott made a statement at the end of May where they indicated that they do not expect business to return to pre-pandemic levels till at least 2022. In the statement they said, "The Covid-19 pandemic is having a more severe and sustained financial impact on Marriott’s business than 9/11 and the 2008 financial crisis, combined.

Choice Hotels

  • In April 2020, Choice Hotels extended stay portfolio had a 69% occupancy rate, while the average for the U.S. hotel industry for the month was 42%. Additionally, the brand plans on focusing on brand conversions to grow post-pandemic, due to a lack of construction lending. According to the company CEO, "Since we serve mainly domestic travelers, we’re insulated from the precipitous drop in international travel."
  • The company is planning on expanding their footprint by 7,200 rooms through 2023, with 55 of the 57 planned projects happening in North America.
  • Choice Hotels outperformed other hotel brands in the U.S. with a RevPar decline of 14% in March (compared to an industry average of 52%) and 29% in April (compared to an industry average of 80%).
  • A stock analysis on GuruFocus projected that "Choice will be one of the first hotel companies to recover from the downturn due to its strong balance sheet and high leisure exposure." The company has high exposure in the drive-to hotel markets, which are expected to recover quickly.

Extended Stay America

  • Extended Stay America (ESA) did not shut down any locations during the pandemic (as of early May), and had an average occupancy rate in April of 61%. The average occupancy rate for the U.S. hotel industry overall in April was 24.5%.
  • ESA announced in early June that Mark Williams was appointed as the Managing Director for Franchise Development. On his new role in the extended stay segment, Williams said, "It is a segment that will grow and is ready for everybody to jump on board; I wouldn’t say it is recession-proof, but it has more legs than any other segment in the industry. We have a great opportunity. We are in 41 states. We are looking to expand that to make sure we are represented in every state in the U.S. This is strictly an American brand, and we are going to use every opportunity we can to expand the franchise relationship. I have been doing this for a number of years and I believe we have a great opportunity. We have a great pipeline, and granted, 2020 is a weird year, it is going to be tough, but we are excited.
  • The company has used a strategy of flexible and agile pricing to target the segments that were traveling. The brand positions themselves against hotels and apartments to ensure they are staying competitive. The company has found itself well-positioned during the pandemic.


  • Hilton announced they would release 2nd quarter earnings on August 6, 2020, so those results have not yet been made public.
  • As of March 31, Hilton had 405,000 rooms in the development pipeline, with 182,000 (405,000-223,000) of those rooms in the U.S.
  • Hilton introduced their EventReady with CleanStay program in July, which is designed to meet the needs of consumers planning gatherings, whether that be corporate planners, sports teams, or families. The program includes cleanliness protocols, added flexibility, and safe and socially responsible solutions.

Sunrise Senior Living

  • Sunrise Senior Living did not have any recent new stories on their website. The most recent was from February 2020 and was an announcement of a new community in Huntington, NY. Sunrise is a privately owned company, and is not required to publicize their financials. This is likely why limited information was found. Therefore, the articles included here are not related to growth or finance, but rather are just instances of Sunrise being in the news.
  • The CEO of Sunrise, Chris Winkle, started a letter-writing campaign to get federal funding for assisted living facilities during the crisis. In an interview, Chandra Sterling, vice president of Sunrise Senior Living, said, "When you speak of nursing homes and funding, assisted living should be part of that conversation," and "It's been extremely difficult. We just feel as if assisted living maybe has gone unnoticed and we'd really like to be seen. We take care of the same vulnerable populations that nursing homes do."
  • It was reported in April that a Sunrise facility in McLean, Virginia had several COVID-19 deaths. However, the company refused to reveal the number of deaths or the number of cases. The company does have a Resumption of Operations Plan on their website that outlines what to expect, but it does not detail all the requirements for moving into a less restrictive phase.

BMW North America

  • According to BMW's 2nd quarter investor report, deliveries in the Americas were down 30.5% for the first half of 2020. The U.S. was slightly less at 29.5%. BMW has set several long-term financial goals including and R&D ratio (R&D expenditure divided by group revenue) of 5-5.5%; a Capex ratio of below 5%; and a free cash flow balance greater than €3 billion.
  • While not disclosing specific numbers, BMW North America announced that motorcycle sales in May 2020 far exceeded those of May 2019.
  • Although not specific to the North America region, BMW did announce that they expect to make an overall profit in 2020.

BMW Spartanburg Plant

  • In 2019, the Spartanburg plant produced 411,620 units. No data was found on 2020 production. A company spokesperson said, "Clearly, with the changing global market, we will need to adjust our production goals for 2020. However, we cannot provide specific numbers at this time."
  • The Spartanburg plant closed in March and reopened in early May. Although most of this article is behind a paywall, what is visible indicated that only one shift of work was recalled initially.
  • In mid-June, the company confirmed that there were 14 active COVID-19 cases at the plant. However, this does not seem to have impacted the reopening, as it was announced in late July that the company was hiring.

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