Page 15 - BusinessWest January 6, 2021

ECONOMIC OUTLOOK 2021 >>
“What we could have is a W-shaped recovery,” said Nakosteen, offering another possibility, noting that, in this scenario, the economy would move back down again, hopefully not as bad as it did when it cratered last March, but eventually climb back up.
“With these vaccines coming online, once peo- ple get them, and they have confidence that other people have done the same thing, then you’ll likely see a pretty robust recovery, starting slowly and then
recent $900 billion package approved by Congress will help, but it won’t be enough. When asked if the federal government could keep on printing money, in essence, he said he didn’t see why it couldn’t. “One of the things that happens during an economic cri- sis is that the government will provide temporary support until the economy heals itself. This is not permanent; this is temporary, and it’s a bridge to the future. And right now, we need a bridge.”
While making hard projections is difficult, Nako- steen said he could offer what he considers to be a best-case scenario:
“By early summer, enough of the country is vac- cinated and enough of the state is vaccinated, and, almost as importantly, people have confidence in the vaccine and the percentage of the population that’s been vaccinated, and then you see people start to re-engage. The industries that have been hurt have all been face-to-face industries — accommodations, retail, other services, the arts, and recreation. These face-to-face services start to bounce back quickly because people have a great hunger to get back out. If things go well, you’re going to see them get back out in the summer, and that’s when you’ll start to see the beginning of a serious rebound.”
Again, that’s the best-case scenario.
The worst case? An insufficient percentage of the population receives the vaccine, supply-chain issues “gum things out,” news of new strains of the virus spreads fear, people lose confidence in a recovery, and things drag on into the fall and perhaps longer, he said, adding, again, that myriad factors will deter- mine which scenario — possibly one in between those two — becomes reality.
Summing things up, Nakosteen noted that, in some respects, we know what’s coming next — the administering of vaccines to millions of people over the next several months. What we don’t know is how all that is going to play out.
As he said, normally you can look to the past to see the future. But not in this case. u
“With these vaccines coming online, once
• The election of a new president. “That generally seems to perk things up — there’s generally a first-adminis- tration bounce — but in these unprec-
people get them, and they have confidence that edented times, who knows?”
• To what extent new habits might
other people have done the same thing, then become permanent. These include you’ll likely see a pretty robust recovery, starting everything from not dining out or trav-
slowly and then accelerating. But, then again, we’re in completely uncharted territory.”
eling to doing most shopping online, to working remotely. “I would like to get back to going out more, but my guess is that my life has changed, and we’ll never really go back to the way it was before the pandemic.”
• How many of the jobs that have been lost are regained. Employment is
accelerating,” he told BusinessWest, adding that the bounce-back might also take the more dramatic Nike swoosh shape. “But, then again, we’re in com- pletely uncharted territory.”
When asked about the factors that will dictate the eventual shape of the recovery, Nakosteen said there are almost too many to count. They include:
• How much more stimulus money will be inject- ed into the economy. Like most, Nakosteen said the
always a key to any recovery, and there is conjecture that many jobs will be lost permanently due in part to those changes in behavior; and
• Whether this region can somehow benefit from these changes in behavior and attitude. Some have suggested that, now that people can successfully work remotely, they may choose to do so in a setting like Western Mass., which provides space and a lower cost of living than Boston or other major cities.
Howard Cheney, CPA, MST | Kris Drzal Houghton, CPA, MST | Jim Krupienski, CPA | Kristi Reale, CPA, CVA | Rudy D’Agostino, CPA
MOVING FORWARD TOGETHER.
At MBK, we’re committed to remaining optimistic in uncertain times.
We look forward to leading our clients through a prosperous and positive new year.
413-536-8510 | mbkcpa.com
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ECONOMIC OUTLOOK 2021
JANUARY 6, 2021 15