is perhaps more optimistic than many economists seem to be on the future of productivity and GDP growth, but for them too, it is clear that there will remain staffing shortages which could continue to pressure costs and inflation expectations"In all, about 15% of full-time workers are expected to be fully remote in future, and just under a third to work in a “hybrid” fashion—a dramatic change from before the pandemic, when just 5% of people laboured at home.
Whereas data from 2020 sent an ambiguous message about migration trends, figures for 2021 show clear outflows from high-cost places, like California.
Catherine Mann of the Bank of England worried that business investment might prove insufficient, held back by uncertainty about growth prospects and uncompetitive markets. Though investment was strong in 2021, recent surveys show diminished appetite for capital spending, she noted, compared with share buybacks and mergers.
The upshot of the conference often seemed to be that although economies have done better during the pandemic than many people dared hope, they are likely to disappoint in its aftermath. But as participants from around the globe zoomed seamlessly from session to session, without having to visit an airport or queue up for coffee, one had to wonder whether such conclusions were not a touch too pessimistic."
But there are constraints ahead ... "Staffing shortages in America are a glimpse into its future... the odds are that the job market will be a little calmer by the end of the year, thanks to a combination of slower economic growth, a fading pandemic and more prime-age Americans resuming work. But the extreme tightness today will have offered a glimpse into the future as ageing depletes the pool of potential workers. Ms Wanamaker describes the prospect as a “perpetual labour shortage”. Getting by with less help will be the new normal."
Comments