While there are many stories of doom and gloom, especially around the economy, there are glimmers of hope. One in particular came from Keith Prather, a market intelligence expert for the business management consulting firm Pioneer IQ. They developed something called the “Fear and Recovery Curve” model to indicate when the crisis would end and what the recovery would look like. And the future, Prather says, is rosy.
In a webinar last week he told attendees that the economy would come back “sooner rather than later” and downplayed economists’ predictions that the recession would turn into a full-blown depression.
According to their model, the economy will start to come back in May and society will soon return to normal.
“That’s where the fear starts to come down and optimism builds,” he said.
Even so, Prather said, he believes the crisis is still “in the third inning” with several hurdles on the horizon until it peaks, most notably shortages of equipment and staff in hospitals in hot zones like New York City, Chicago and Miami.
“That creates additional fear,” he said. “We’ve still probably got at least two more weeks before we can call it a crisis peak.”
“We are strongly suggesting companies dig into data to understand how to tailor the Fear Curve for their geographic market and for the industries they’ve been serving,” said Ables. “You’ve got to start to make some decisions for what you believe is a general timeline for your markets.”
In addition, the coronavirus has led to major supply chain disruptions, especially of goods from China, and Prather said he thinks American businesses will be hesitant to resume orders from this part of the world.
“How we source projects has a lot of weaknesses,” he said. “We believe that going forward there will be a lot of reshoring back in the U.S. where we’ll see an increase in our manufacturing ability here as well as heading into Mexico.”
This in turn will create a surge of new manufacturing- and supply chain-related construction projects such as factories and warehouses, he added.
In addition, pent-up demand from the current construction shutdowns will lead to a “construction tsunami” beginning in the third quarter, driven by historically low interest rates and a “tremendous amount of liquidity being pumped back into the market,” Prather said.
In other words, if you can wait out the bad stuff, get ready for the big time.