Consumer spending still expected to grow in 2022, but at slower pace

Solvang Third Wednesday is a promotion encouraging residents and tourists to “walk, shop, and wine and dine.”

By Kenneth Harwood

Economist, Solvang Chamber of Commerce

Spending by consumers seems likely to continue to grow in 2022. The rate of growth is expected to be slower than in 2021, as predicted for the United States by The Conference Board.

Real consumer sending in 2021 is expected to be 7.9 percent greater than its negative growth of 3.8 percent in the COVID-19 pandemic of 2020. Growth of 3.3 percent is expected in 2022, and growth of 2.7 percent in 2023.

Yearly rate of hotel occupancy in the U.S. is expected to be 54.7 percent in 2021, growing by 13.0 percent in 2022 and nearing full recovery in 2023. Estimates are from STR and Tourism Economics.

Revenues from all sales of luxury wines to consumers in the U.S. are expected to regain in 2021 part of 7.2 percent lost in 2020 because of oversupply and the COVID-19 pandemic. Full recovery is expected in 2022, according to Silicon Valley Bank. Wine Institute reported good quality and drought restricted volume of the California crop of wine grapes in 2021. California produces about 80 percent of the wine in the U.S., according to Wine Institute.

Resales of single-family homes in California are expected to decline 5.2 percent in 2022, as estimated by California Association of Realtors. Median price is forecasted to rise 5.2 percent to $834,400.

Please see websites of The Conference Board, STR, Silicon Valley Bank, Wine Institute, and California Association of Realtors for details.