Among other factors, the white-hot construction market is caused by housing needs, and the manufacturing industry’s growth is caused by a desire to shorten supply chains. Business Intelligence Since business leaders face serious challenges frommany different factors, it makes it easy to see which possible risks could derail the economy by putting these challenges into a risk matrix, where the x-axis measures the economic severity of a potential shock and the y-axis measures the likelihood of that shock. One important risk has to do with U.S. global supply chain stress. Moody’s Analytics did a chart defining “pre-pandemic normal” as 2019 Q4 = 100. Then they looked at the years 2009 through part of 2021. During the first part of 2021, supply chain stress caused high inflation. Another chart, based on information from BLS and Moody’s Analytics, showed the pandemic recession in 2020 and inflation in 2021. The chart also shows the Federal Reserve forecast. The Federal Reserve appears confident that raising interest rates will reduce inflation within a year or slightly longer. Federal fiscal support for those affected by the pandemic has been unprecedented. During 2020 and 2021, the federal fiscal response totaled 24.6% of the gross domestic product. Those numbers come from the Congressional Budget Office and the National Bureau of Economic Research. Guidelines make important decisions easier. The following guiding principles might help leaders make the best possible decisions. The first is practicing warm-heartedness. Arthur Brooks once asked the Dalai Lama what to do when he felt contempt, and that was the Dalai Lama’s answer. The second recommendation is from Jon Meacham, author and historian, who said discernible reality does exist. Although there might be disagreement about causes and solutions, you can find common ground with facts, respect the facts and then rely on wisdom to move on. The third recommendation, finding balance, was prompted by the current president of the University of Utah, Taylor Randall. During an earlier part of the pandemic, he commented that people who focus on one problem lose perspective. Strategies to Succeed Phil Dean, a senior research fellow at the Gardner Institute, suggested four strategies. The first is to prepare for economic re-sorting. The pandemic brought demographic changes; for example, we now have Zoom towns and employees who get their checks from out of state. The pandemic also accelerated other technological trends such as online school, telehealth and remote sales. Behavioral change has come from a new preference for working from home. Remote work is here to stay: Moody’s Analytics did a graphic of net out-migration from 10 major urban core locations, 2007-2021. It shows a sharp increase in out-migration, starting mid-2020. Second, take care of yourself and others. Before the pandemic, the State of Utah Department of Human Services published a 2017 Prevention Needs Assessment Survey about Utah Youth that examined statistics from 2013, 2015 and 2017. The percentage of youth with problems increased for each of the years considered. Third, take care of those who are left behind. We have good reasons for being worried about the pandemic causing students, Utah’s future workforce, to be left behind academically. The Utah State Board of Education and the National Center for Improvement of Education Assessment examined English language arts and math skills for grades 5-8. They found that learning disruptions had had a definite negative impact on these subjects. Finally, it’s important to invest in institutions. People need society’s institutions to shape their social lives, connect with others and be replenished. But many people have lost trust, respect, faith and confidence in these institutions, and society has suffered as a direct consequence. We need to repair the damage. 3 Q: What are the economic effects on the economy as the boomer generation moves into retirement? A: Utah differs from the rest of the country because the state has more millennials than boomers. However, the pandemic has accelerated the economic impact of boomer retirements. There will be a rippling effect as boomers move out of decision-making roles. Q: Are there areas with housing surpluses instead of shortages? A: Although some rural communities have housing surpluses, northern Utah, southwestern Utah and urban Utah all have housing shortages. Other states have some different housing dynamics. There are supply and labor constraints for housing, and the nation is still growing, which means the current housing market is an owner’s or seller’s market. Q: What do you think about the inland port, the airport and the prison? A: Everyone on Capitol Hill is very mindful of what they call generational investments. As a result, really solid things are happening financially in our state. Current state investments include the Point of the Mountain, the prison, the inland port and the 2030 Olympic winter games. The Point of the Mountain is on its way. Our state doesn’t just from our conversation with Natalie Gochnour Furthe r insight continued on page 30 29
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