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What happens as demand shifts from goods to services?

Posted by The FTR Experts on Feb 1, 2021 1:58:00 PM

The FTR Experts were posed with the question, "As demand shifts from goods to services, will there be a dropoff for goods?"

This Q&A response from the FTR experts came from the January 2021 State of Freight webinar, Preparing for 2021. View the video and the key takeaways below and then leave a comment at the bottom to let us know what you think. 

 

 
 
Key Takeaways:
  • We expect a slowing of growth, not necessarily a drop-off, unless we see the economy contracting and pulling back again.
  • There is a large sector of our country that haven't been buying goods at all due to their financial situation that will be buying goods again with recovery.
  • If you bring back the service industry, employment increases and the purchase of goods along with it. 
  • Looking back at the Great Recession, we can make comparisons to some of the extraordinary things that happened, but keep in mind that they happened over a period of 12-18 months. 
  • Shutdowns across the country put you in an environment where things start to ease again. We're not expecting that right now. But it is a possibility that we cannot completely discount.
  • We finally have seen a huge increase in final mile delivery. And what does that look like for online retailers? That shift has been dramatic and we cannot overstate that enough.
  • With democrats over the both Houses of Congress and the White House, there is the possibility of another Cares Act. It is conceivable for there to be another 3 trillion dollar program that allows us to shut down for a month.
  • A potential issue is spending on goods in the first half of the year and then a shift where people start saving.

Read additional Q&A from this webinar on the FTR Blog.

Tags: Economy, Demand

 

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