Umpqua Bank 2022 Economic Outlook for Businesses Shows Growth Opportunities Ahead, but Adaptability Remains Critical for Success

Report taps economists and bank leaders for insights to help small and middle market companies navigate disruptions, be ready for opportunities

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Umpqua Bank

Dec 09, 2021, 09:00 ET

PORTLAND, Ore., Dec. 9, 2021 /PRNewswire/ -- Umpqua Bank today released its 2022 economic outlook report for small and middle market companies, "Headwinds & Opportunities: Economic Trends & Predictions for Businesses in 2022." The bank tapped prominent West Coast economists and Umpqua Bank thought leaders to examine key issues that will shape the 2022 economic landscape, their impact on decision-making, and what businesses can do to meet both challenges and opportunities with confidence.

Issues explored in-depth in the report include the COVID pandemic, inflation, supply chain and labor challenges, as well as opportunities in automation, commercial real estate and M+A.

"Every year brings a unique set of challenges and opportunities. Successfully navigating these developments starts with understanding key factors shaping the economy and what they mean for business," said Tory Nixon, Umpqua Bank president. "Looking ahead to 2022, there's tremendous growth opportunity for those businesses that remain nimble and prioritize adaptability. At Umpqua, we help businesses of all sizes plan for growth while preparing for the unexpected that's part of doing business in the current economy."

Umpqua Bank's "Headwinds & Opportunities" report provides expert insights on what businesses should anticipate and prepare for in 2022 across four categories: 1) The Economy, 2) Major Disruptions, 3) Strategic Investments, and 4) U.S. Policy & Cybersecurity.

To read the full report, visit: www.umpquabank.com/2022-trends.

Notable insights from the report include:

The Economy

Americans' net worth has soared during the pandemic, with many consumers flush with cash and ready to spend. This suggests 2022 will be a year of strong demand and growth potential, depending on the pandemic's trajectory.
Businesses in service industries need to prepare for significant increases in demand as strong consumer spending is expected to shift from goods to services.
Inflation will continue to pose a challenge to the economy and be especially challenging for businesses that rely on purchased goods.

Major Disruptions

A shift in demand from goods to services should improve supply chain efficiency, delivery times, and ease pressure on the system.
It will be important for businesses to heed lessons learned from recent supply chain disruptions and carefully reevaluate their sourcing, inventory, manufacturing, and pricing strategies.
The talent environment will continue to be highly competitive, and companies will want to invest in strong compensation packages to attract hesitant workers, particularly in high-need industries such as leisure, hospitality, and retail.

Strategic Investments

Strong M+A is expected to continue. Cash-rich firms will be in a strong position to acquire competitors whose owners are exiting or less competitive financially, and more firms impatient with the pace of organic growth will look to acquire competitors.
Automation adoption is increasingly affordable and will continue to advance among small and mid-size companies and be most prominent in industries facing significant wage pressure.
It will be important for businesses to reevaluate their current real estate position and strategy as uncertainty in the office sector will continue into 2022. This will create opportunities for businesses as many employers continue to refine their workplace expectations and hybrid work environments. In addition, multi-family housing looks strong moving forward.

U.S. Policy and Cybersecurity

Major legislation currently being passed or considered by Congress could have significant implications for businesses and investors. It will be critical to understand how any changes to fiscal policy will impact cashflow and financial planning.
The move to Real-Time Payments will accelerate, which will improve cash flow and require businesses to enhance their cybersecurity measures to protect working capital.

About the Report

For "Headwinds & Opportunities: Economic Trends & Predictions for Businesses in 2022," Umpqua Bank interviewed leading West Coast economic and policy experts at ECONorthwest, economic futurist Bill Conerly, as well as bank leaders. ECONorthwest is an independent economic consulting firm that provides economic analysis for clients needing to make policy and investment decisions. Its staff includes seasoned economists, analysts, and policy experts. Conerly is a business-focused economist who specializes in connecting the dots between the economy and business decisions. He has worked for more than 30 years helping companies adapt to changing economic conditions. Conerly has written two books on business economics and regularly contributes to Forbes.

About Umpqua Bank

Umpqua Bank, headquartered in Roseburg, Ore., is a subsidiary of Umpqua Holdings Corporation, and has locations across Idaho, Washington, Oregon, California, Nevada, and Arizona. Umpqua Bank has been recognized for its innovative customer experience and banking strategy by national publications including The Wall Street Journal, The New York Times, BusinessWeek, Fast Company and CNBC. The company has been recognized for eight years in a row on FORTUNE magazine's list of the country's "100 Best Companies to Work For," and was recently named by The Portland Business Journal the Most Admired Financial Services Company in Oregon for the seventeenth consecutive year. In addition to its retail banking presence, Umpqua Bank also owns Financial Pacific Leasing, Inc., a nationally recognized commercial finance company that provides equipment leases to businesses.

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