The rebound in consumer demand from the Covid-19 crisis looks set to be fast but uneven with those who were able to save money over the past year in a strong position to spend, according to research by McKinsey & Co.
The pickup will drive economic growth and deliver a significant boost to in-person services that have borne the brunt of restrictions to stop the spread of the virus, the study of China, France, Germany, the UK and US by the McKinsey Global Institute projected. Savings surged across advanced economies last year in the absence of opportunities to spend.
The recovery will be lop-sided though, especially in the US where demand will be driven by high-income households that accounted for two thirds of the consumption drop and about half of the savings increase. In Europe, the report predicts a more balanced but slower rebound with the richest taking longer to resume spending.
The adoption of digital practices in areas as health care, shopping and entertainment will continue beyond the pandemic, as will spending more time in the home, the research found. It predicts air travel for leisure purposes, in-person education and dining out will revert closer to pre-Covid trends, albeit with modifications.