An economic recession could be on the horizon, according to a local professor.
On Tuesday, Feb. 14, the Forsyth County Chamber of Commerce hosted the 2023 Economic Outlook Breakfast, featuring a keynote address by Roger Tutterow, professor of economics at Kennesaw State University and the Henssler Financial Endowed Chair, who largely spoke on the impacts of the economy following the COVID-19 pandemic.
“We look at the economy today, and we look back three years ago today, and we remember how we went through the steepest, deepest, most unexpected recession of the post-World War II era, then we came out the other side,” Tutterow said. “Interestingly enough, not only was it the steepest recession, it was also the shortest.”
Tutterow said the economy was able to get moving again despite the pandemic, but concerns have resurfaced over whether the country is in or headed to a recession.
He said he doesn’t feel the economy is currently in a recession there is “about a 60% chance of a recession before the end of this year.”
“Sixty percent is not inevitable. Sixty percent is a little more likely than not, but even if we do have a recession in 2023, remember this, not all recessions are identical…It is possible to have a mild recession, which gives the opportunity for the economy to hit reset and correct some of the imbalances that occurred during or just after the pandemic.”
Tutterow said there are other factors in the economy that need to be addressed.
One negative factor he noted was that the consumer sentiment, or how households feel about the economy, was at historical lows.
“It started falling again in late 2021, early 2022,” he said. “It dropped all the way down to where in June of last year, it hit an all-time low, lower than 9/11, lower than the Great Recession… lower than any of the major shocks you can think about in the last 70 years. Now, the good news is we have moved off that floor.”
Since Forsyth is one of the fastest-growing areas of the country, Tutterow also touched on housing, which he said had been impacted by high construction prices and other factors.
Across the country, Tutterow said he felt builders had focused too much on multi-family developments and not enough on single-family homes.
Also in construction, he said he also expects offices to continue to be impacted after many companies and workers adapted to working remotely during the pandemic.
“I don’t see how the office market is not adversely affected by the behavioral changes after the pandemic,” he said. “Let’s be clear about something, 10 years from now, no one is going to sit around talking about which mayor or which governor had it right on shutting down the economy.
“What we’re going to be marveling at is the voluntary behavioral changes that occurred after the pandemic that are not going away. The genie is not going back in the bottle, and when it comes to office, how we work is permanently changed.”