the nation benefits from steady growth in goods and services. Tail winds include a decline in unemployment numbers, rising wages, a booming housing sector, fat corporate profits, aggres- sive capital investment, federal initiatives on infrastructure, and generally easy capital sourcing. “We are in the midst of an early economic recovery after the


“C


body blow of COVID-19,” says Bernard Yaros Jr., assistant direc- tor and economist at Moody’s Analytics. “Though growth will decelerate in 2022 due to fading effects from business re-open- ings and past fiscal stimulus, the economy will remain robust.” The numbers tell the tale. Moody’s Analytics expects Real


GDP (Gross Domestic Product) to grow at a healthy 4.3 per- cent in 2022. While that is a bit less aggressive than the 5.8 percent of the past 12 months, it remains decidedly sunnier than the 3.4 percent pandemic-fueled decline of 2020. GDP, the total of the nation’s goods and services, is the most com- monly accepted measure of economic growth. “Real” GDP adjusts for inflation.


Profits Grow Businesses tend to benefit


from a healthy economy, and


Moody’s Analytics expects corporate profits to increase by some four percent in 2022. While that figure might seem unre- markable in isolation, it represents a hefty advance over the difficult comparisons of 2021, when profits spiked 36 percent. Clearly, business owners are glad to bid adieu to the pandemic- battered 2020, when their profits declined three percent. Headwinds, of course, are inevitable. And 2022 will have its own troubling mix: the peekaboo pandemic. Labor shortages.


FIRST QUARTER 2022


learing skies with a chance of showers.” The eco- nomic forecast for 2022 promises a largely favorable operating environment for businesses of all sizes as


Crippled supply chains. China tariffs. Nascent inflation. An unset- tled consumer. Yet economists do not expect negatives to prevail. “While the Delta variant is continuing to do some damage, we expect this wave of the pandemic to soon subside and for any future waves to be successively less disruptive,” says Yaros. “Labor and goods shortages will ease as the domestic and global econo- mies increasingly learn how to live in a new pandemic normal.”


Businesses tend to benefit from a healthy economy, and Moody’s Analytics expects corporate profits to increase by some four percent in 2022.


Furthermore, heftier earnings should help companies weather


the coming year’s array of challenges. “Corporate profit margins have been running somewhat above their five-year average of 11.1 percent,” notes Yaros. “That should provide some ability to absorb price pressures that have developed from rising commodity prices and global supply chain issues.”


Sales Recover Business owners tend to confirm the economists’ sunny reports.


“Most of our members have seen a healthy return of revenues and are doing about 90 percent of their pre-COVID business,” says Tom Palisin, executive director of The Manufacturers’ Association, a York, Pa.-based regional employers’ group with more than 370 member companies. “Many have actually gone into hiring mode.” With its diverse membership in food processing, defense, fab-


rication, and machinery building, Palisin’s association is something of a proxy for American industry. “Our members are optimistic and expect current levels of demand to continue well into 2022,” says Palisin. “They’re expecting to continue to hire, as well. Our annual


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