Back in January, I wrote that B2B marketers should use a quarterly approach to planning in 2021 so that they are able to adapt to changing business conditions. Specifically, I recommended that marketers develop a revenue forecast for each quarter of the year and finalize the forecast in the month before the beginning of each quarter. Then, marketers can lock down their marketing plans for the coming quarter based on the final revenue forecast.
Marketers using a quarterly approach to planning in 2021 should be finalizing their revenue forecast for the second quarter within the next few days. The purpose of this post is to take an updated look at the prospects for the U.S. economy for the rest of this year. The good news is, the outlook for the economy has improved considerably over the past several weeks, and marketers need to be ready to take full advantage of robust economic growth over the balance of 2021.
Pandemic Progress = Economic Optimism
In 2020, economic and business conditions were tightly linked to the state of the COVID-19 pandemic and the public health measures implemented to mitigate the spread of the virus. That linkage will continue this year, but with very different results.
The state of the pandemic has improved dramatically over the past several weeks.
- The number of daily cases, total hospitalizations, and daily deaths have all fallen substantially since their peak in early January. As of March 5th, daily reported cases were down 78%, hospitalizations were down 68%, and daily reported deaths were down 44%. (Data Source: The New York Times)
- The rollout of vaccines is progressing well. As of March 5th, about 55.5 million people had received at least one vaccine dose, and providers were administering vaccines at an average rate of about two million per day. (Data Source: CDC)
- On February 27th, the U.S. Food and Drug Administration granted emergency approval to the Johnson & Johnson vaccine, and the company is committed to delivering 20 million doses this month and a total of 100 million doses by the end of June. The Biden administration is now projecting that the U.S. will have enough vaccine doses for every American adult by the end of May.
- New cases of COVID-19 peak early in the first quarter, and no widespread lockdowns are implemented.
- COVID-19 vaccinations rise in the first quarter, and vaccines are broadly available in the second quarter and universally available in the third quarter.
- The federal government approves a $1.5 trillion COVID relief package in March, and the fiscal support is deployed in the second quarter.*
- Modest improvements in labor markets and consumption in the first quarter precede a sharp rebound in the second and third quarters.
- On February 9th, Goldman Sachs raised its forecast for 2021 real GDP growth in the U.S. to 6.8% from 6.6%.
- On February 22nd, Bank of America increased its estimate of 2021 U.S. real GDP growth from 6.0% to 6.5%.
- On February 25th, Kiplinger predicted that U.S. real GDP will grow by about 5.5% in the first quarter and by 6.2% or more over the entire year.