Portable Sanitation Association International

Association Insight February 3, 2021

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ASSOCIATIONINSIGHT Portable Sanitation Association International News BIWEEKLY EDITION FEBRUARY 3, 2021 Page 2 2021 Economic Outlook for Portable Sanitation…continued from page 1 Continued on page 10 One month into 2021, we have a new administration in Washington, vaccines rolling out in most countries around the world, new infectious variants of the virus gaining a toe hold, supply chain issues, and Wall Street shenanigans all playing a role in the outlook for the year ahead. What does it all mean? No one knows for sure, but we can make some educated guesses. This article has been prepared based on information from many sources, with an eye to the implications for the portable sanitation industry. Every market and company is different. We hope that you will take what is shared here and consider how it applies to your unique situation. A Year in Two Parts 2021 is going to be a year divided into two distinct parts. How the economy works and how your business works will be different before everyone in your area is vaccinated (and/or before "herd immunity" is achieved) and afterward. Economic experts are offering several scenarios for the economy in 2021. Generally, they use a "base scenario," which is the middle ground outlook they consider most likely, an upside optimistic scenario, and a downside more pessimistic scenario. We reviewed projections from several sources. Overall, they vary in their economic growth predictions for the year, with Goldman Sachs optimistically projecting a 5.3 percent increase on the high end and Deloitte projecting a modest 2 percent on the low end. The average seems to be around 3.8 percent growth overall in 2021, with timing of the uptick being a major point of discussion. The chart shown above was prepared by the Conference Board (CB), a nonprofit business research group which is forecasting overall economic growth of about 4.1 percent this year. The CB is predicting that economic activity could return to normal around April in a best-case scenario. Since the vaccine roll out has been slower in the US than predicted at the time the CB created the forecast, the best case is becoming more unlikely each day. The nonpartisan Congressional Budget Office (CBO) projected on Monday, February 1, 2021 that the US economy would return to its pre-pandemic economic activity by July 2021, ahead of the CB's base scenario for things to attain the "new normal" around October 2021. While other forecasters differ slightly in the timing of their predictions, these examples from the CB and CBO provide a good middle-of-the-road depiction of what experts believe will happen—a return to pre-pandemic economic activity sometime in Q3. If a variant of the virus that is impervious to the vaccine takes hold, if people don't get back to work as projected, or if some other unforeseen economic wrinkle occurs, the return to peak will not occur until 2022.

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