Personal consumption expenditures for corrective eyeglasses and corrective lenses are in a rising trend. The trend is expected to endure through 2022 and 2023.

Practitioners and providers in this space are going to stay very busy. The shortage of people to hire will continue to be an issue for some. The need for working capital to grow the business must be considered by perhaps others. The sheer amount of time and stamina it will take to manage and sustain the trend at the individual level may be daunting for some. In the aftermath of Covid-19, we are seeing some of the unintended consequences of stimulating the economy.

The personal consumption trends cited above are fueled by overall GDP growth, the availability of jobs, income levels that are rising, and the currently unquenchable desire for consumption.

GDP is ascending, with nothing to cause the trend to stop anytime soon. Supply chain issues abound because the economy was stimulated more than the supply chains could handle. While Covid, energy blackouts, and misplaced logistic assets remain a problem, they will be sorted out given time and the profit motive. These issues are not expected to derail GDP growth.

The level of demand in the overall economy was overstimulated by virtue of the quick and strong government response to Covid-19. However, the economy was never broken. That means the influx of liquidity and simple money (remember those checks?) pushed demand further out than the supply chain could handle. The global supply chain, including in the U.S., is pushing through more product than ever. But the push has been so vigorous in the face of rabid demand that a kerfuffle developed regarding the deployment of the logistic assets needed to keep supply moving (this includes human assets).

Rise in personal consumption of corrective eyeglasses and lenses, as well as frames, will slow from the double-digit pace evident through the third quarter of this year. These trends are tied to retail sales and GDP, both of which will expand through at least 2023, albeit at a slower pace in 2022-23 than they have this year. The leading indicators support this expectation, as does the return to normal levels of disposable income.

Normalized demand lies ahead. This suggests that related supply-and-demand constraints on the supply chain will abate as we progress through 2022 and likely the first one to two quarters of 2023.

It is important to note that there is no recession in the outlook through at least 2023, hence the encouragement to plan for ongoing “positive problems.” Labor is not going to become bountiful; labor costs will continue to rise. On the bright side, interest rates will likely stay favorable through 2022 and 2023.

The combination of these economic factors suggests that investment in technology related to making your processes more efficient and your labor more effective should be a stalwart part of your strategy going forward.

From our perspective, potential tax increases are not your biggest threat. Maintaining profit margins in the face of increasing costs for an extended period will likely prove more formidable.

Managing and marshaling your resources should be your utmost priority when you contemplate the next two years. Corporate culture, understanding the need for a work-life balance, and perhaps even offering a pathway forward to the American dream for today’s young workers are methods for alleviating some of the stresses, in addition to employing better technology. This is no time to stand still.

ABOUT BRIAN BEAULIEU
An economist with ITR Economics since 1982 and its CEO since 1987, Beaulieu is also chief economist for TEC, a global organization comprising more than 13,000 CEOs. Previously, he was an economist for the U.S. Department of Labor.