Flexport’s Post-Covid Indicator (PCI) measures the balance between U.S. consumers’ spending on goods versus services. Our latest forecast shows the balance is expected to swing further to goods during peak season compared to both summer stability and the prior year.
Covid-19 triggered a boom in demand for goods, but how long will it last? We analyze exclusive shipping data to peek into the future. The monthly Flexport Post-Covid Indicator shows how demand could shift in the coming months.
The Methodology: The Flexport Post-Covid Indicator is based on an analysis of correlations between detailed shipping data and national consumption behavior. As one would expect, given how goods move, the closest correlations are between shipping flows in a month and consumption a bit later. Using the estimated model, we can look at more recent shipping data and forecast the consumption patterns that are likely to follow.
The global shift in consumer preferences for goods over services, discussed in recent Flexport Research, has been particularly acute in the United States. It is worth remembering that the elevated pressure on global supply chains is the result of two factors in combination: strong incomes and a preference for goods in consumption. PCI tracks the latter.
Flexport’s Post-Covid Indicator compares the balance of spending in summer 2020 (PCI = 100) to spending before the pandemic (PCI = zero) and proved accurate in the September 2021 estimate of 117.
Our latest estimate shows that stability in the elevated balance seen during Q2’21 and Q3’21 may trend toward more goods spending during Q4’21 with an expected PCI of 112 in October, rising to 123 by December. That shift, while modest, is likely to drive spending on goods versus services well above pre-pandemic levels, contributing to the continued logistics network congestion.
The next update for the Flexport PCI will be on December 17. BEA will release October data on Nov.24, November data on Dec. 23, and December data on Jan. 28, 2022.
Please direct questions about the Flexport PCI to firstname.lastname@example.org.
Disclaimer: The contents of this report are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. Flexport does not guarantee, represent, or warrant any of the contents of this report because they are based on our current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This report has been prepared to the best of our knowledge and research; however, the information presented herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this report.
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