A year ago, the economic outlook for our region could be characterized as “things are looking better, but…” It turns out that 2021 did, in fact, offer a strengthening economy and record low unemployment that was tempered by surging inflation, supply chain issues and the Great Resignation.

So, as 2022 begins, what do economists and business leaders expect? Well, things are looking better, but…”

That was the underlying message of The Chamber of Commerce of Greater Philadelphia’s annual  Economic Outlook event, sponsored by Firstrust Bank. As a reminder that things aren’t quite back to normal, the event was held over a videoconference call again this year. More than 500 participants listened to presentations by Patrick Harker, president of the Federal Reserve Bank of Philadelphia, Phil Mackintosh, chief economist at Nasdaq and a panel of local executives hosted by Tim Abell, president of Firstrust.

The Chamber’s 2022 Economic Outlook survey of members, conducted by the Philly Fed, shows how cautious optimism – and the lingering uncertainty – continues to typify the region’s economy.“These results offer a clear picture of an economy moving in the right direction, particularly compared to where we were a year ago,” Harker said in presenting the survey data. “But to be clear, our survey indicates far from smooth sailing. The economy is improving, but it’s still freighted with risks and constraints.‍

For those who missed the presentation, here are some of the key takeaways.

• 83.4% of those surveyed forecast improved or steady business conditions for the region vs. 77.3% a year ago.
• 89.2% see improved or steady conditions for their own companies vs. 84.6% a year ago.
• 73.8% see gains in or the same orders vs. 70.2% a year ago.
• 83.6% see gains or steady revenue vs. 80% a year ago.
• 90% expect to raise prices or keep them the same vs. 84.1% a year ago.
• 90% expect to hire employees vs. 79% a year ago.
• 91% expect wage and benefit costs to rise vs. 79% a year ago.
• The top three concerns of those surveyed were labor availability, rising labor costs and supply chain issues. Fifty-six percent of those surveyed have found hiring difficult in the past three months.

‍More from Harker:

• The Federal Reserve will raise key interest rates three to four times in 2022.
• The workforce is nearly at pre-pandemic levels.
• A rising number of job applicants are rejecting offers that don’t offer fully remote working capabilities.

‍From Mackintosh:

• The Omicron variant could affect the economy but the stock market doesn’t think it will be a huge impact.
• Overall consumer demand in 2022 is likely to normalize and supply should recover – which along with higher interest rates should bring the inflation rate down from current levels.
• The spending boom caused by pandemic stimulus checks is ebbing with consumers likely to begin using credit cards more and to begin spending more on services and travel and less on “stuff.”
• Expect some volatility in the stock market but a recession-style sell-off is not likely.
• Because of the negative impact on bonds from inflation and rising interest rates, “there is no better alternative to equities.”