The U.S. economy won’t be getting back to “normal” anytime soon, strategic forecaster David Pearce Snyder said Monday in a presentation to the AICPA’s 2010 fall meeting of Council in New Orleans.
Increased emphasis on personal saving will combine with tightened credit and higher taxes to keep “consumer spending 5% to 10% below pre-recession levels for at least five years,” Snyder predicts. Meanwhile unemployment will remain high, home foreclosures are still rising and a commercial real estate bust is looming.
While Snyder sees an uptick in high-dollar jobs ahead, he offered advice to CPAs until that rising tide begins to lift boats – prepare for the inevitable.
Snyder listed seven economic inevitabilities for the next seven to eight years. Those are:
- The entry-level labor pool will shrink by 5%. Workers 16 to 24 years old will be in short supply with intense competition among employers to attract this more tech-savvy generation.
- The share of the work force held by individuals 55 and over will increase from
- 20% to 30%.
- Unemployment will remain above 7.5%.
- Fiscal and financial deleveraging will constrain government and consumer spending.
- Commerce will become essentially paperless and cashless.
- Health care will account for a quarter of all economic growth even as the health care industry consolidates.
- The construction industry will shrink and consolidate.
He also touched on four economic probabilities:
- Employers will use IT and communications technologies to cut costs, improve productivity and increase profitability.
- Businesses and consumers will invest in energy conservation and co-generation to hedge against rising energy costs.
- Corporations will invest surplus profits in “philanthropreneurial” ventures to stimulate job growth; thus nonprofit employment will surpass public sector employment.
- Local private, public and nonprofit organizations will form consortia to provide affordable, high-value services to cash-strapped consumers.
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