Latest aggregate forecast says good riddance to 2020

By |  January 4, 2021

Finally, 2020 is over. 

We now have several vaccines to fight COVID-19, and the rapid distribution means life returns to normal sometime in 2021.   

The rapid increase in jobs and the exceptionally high savings rate will lead to strong GDP growth for most quarters in 2021. The states that have been locked down the most will recover the most, even though they will remain below 2019 levels until 2023.

All of this brings up an important question: When will people and businesses return to pre-COVID levels in major U.S. cities? Our estimate is that the cities that have the most severe shutdowns, the largest increases in crime and the highest living costs will take the longest to recover. New York, Chicago, Seattle, Portland, Minneapolis and other hard-hit areas will take many years to fully recover. In some cases, a decade may pass before they return to healthy conditions.

Other cities, mainly in the Sun Belt, will fully recover by mid-2021 because they’ve had less severe restrictions and lower crime. Migration patterns, which are already favorable for the Sun Belt, have become even more favorable for Sun Belt cities and states. This makes the 2021 to 2024 aggregate gains very patchy. Gains will be good for the Sun Belt yet modest for colder areas.

Aggregate demand for residential will increase by more than 12 percent between now and 2023. Aggregate for nonresidential will increase by 3 percent for the 2020-to-2023 period, with all of the gain in 2023. Aggregate demand for nonbuilding will be flat to down 1 percent between 2020 and 2023 because of state and local budget problems. We do not think any stimulus will have much infrastructure money in it.

Aggregate pricing strength will return by late 2021 in most areas.

David Chereb, Ph.D., is with David Chereb Group (DCG), which produces customized market forecasts by major segment of construction, from the county level up. Clients use DCG market intelligence reports for business planning and acquisition analyses in aggregate, ready-mixed concrete and cement. Visit for more information.

Featured image: P&Q Staff

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