Report brings good news for the economy and for the franchise industry, too

Respected investment bank JP Morgan has predicted that the coronavirus pandemic will be over in the New Year and that the entire world will experience a full global economic recovery in 2022. 

JP Morgan said it based this information, which was released on Wednesday in its outlook report for the coming year, on new vaccines and therapeutic treatments that will lead to a “strong cyclical recovery, a return of global mobility, and a release of pent-up demand from consumers,” according to an article by Reuters news service. The therapeutics cited are most likely the one antiviral Covid treatment pill, made by Merck, that has already been approved for use by the U.S. Food and Drug administration and another even more promising one from Pfizer that is nearing approval.

Good news for the franchise industry

If and when JP Morgan’s rosy economic forecast comes to pass, it is likely to translate into more consumers being on the move and be less fearful of spending – which is great news for franchises that depend on feet inside the door as well as those that go into homes and businesses to serve their Covid-wary and Covid-weary customers.

For franchisors and franchise consultants, a global economic recovery means that fence-sitting potential franchisees may take the plunge into business ownership because they see light at the end of the proverbial tunnel. And for all businesspeople involved in the industry who need an infusion of cash, from seed money to bridge loans, they’ll be heartened by greater lender optimism and a stronger likelihood of being approved for loans. 

Marko Kolanovic, who is JP Morgan’s chief global markets strategist and co-head of the company’s global research, gave these specifics regarding his firm’s predictions:

  • The S&P 500 will increase nearly 8% to 5050 points.
  • Emerging market stocks will jump by 18%.
  • Ten-year U.S. Treasury yields, which are a key driver of global borrowing costs, will rise 2.25% by the end of next year.

“Our view is that 2022 will be the year of a full global recovery, and end of the pandemic, and a return to normal economic and market conditions we had prior to the COVID-19 outbreak,” Kolanovic said.

Mary Vinnedge