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HSBC global economist James Pomeroy sees 50% online shopping by 2030

HSBC economist James Pomeroy (R) predicts one of two purchases by 2030 will be made online.

Home desks. Bicycles. Furniture. We’re not going to buy as many of those as the pandemic eases and we resume dining in restaurants, traveling by air and going on vacation, according to HSBC economist James Pomeroy.

“We’re starting to think about what is going to drive growth this year,” Pomeroy said in a conversation with FreightWaves founder and CEO Craig Fuller during Global Supply Chain Week. “If you go into the consumer spending data in any economy, you can see the sectors where the spending growth has been the strongest. And it’s all thick one-offs.

“The [consumer] goods market had an unbelievable 2020 because of the adjustment that people had to make,” he said. “It’s hard to say how much demand for them comes back. You could see a switch where you start going back into more nondurable goods spending, such as clothing, which had a really, really bad 2020.”

Even apparel demand may not recover much because so many people work from home. Zoom video calls rarely focus the camera below the head and shoulders. Comfort rules. And that means loose-fitting, casual wear as opposed to dress jeans, dresses and suits.


We’ll still buy paint and other home improvement products. But the service economy is due for a recovery and will rise as consumer goods demand moderates.

Where we live

An exodus from big cities to smaller towns and suburbs accelerated because of the pandemic. Pomeroy foresaw this happening around 2030. In a research report last June, he asked what would happen if we stopped commuting as much because of the pandemic.

“If you think about, particularly in the developed world, who moves to cities, who lives in cities, it’s young people,” he said. “And young people are a smaller and smaller share of the population. The number of people turning 20 or turning 23, 24, 25 every single year in the U.S. and the U.K. and across the developed world is down every year.”

Combined with urban dwellers’ desire for more space to conduct pandemic-prompted remote work, the push toward urbanization eases.


“We didn’t expect it to happen so quickly,” Pomeroy said. “We’d been talking about 2030. And now we’re talking about 2020 and 2021.”

Relocations from cities like New York and San Francisco to places like Nashville, Tennessee, and Austin, Texas, mostly are professionals in higher-paying jobs.

Not everyone can afford to follow the trend. 

“In your cities, you’ve got a change in the nature of that population that could be seen as a negative because you’re seeing a lot of wealth and money and people disappearing,” Pomeroy said. “But that money is also then going to places which are typically on lower incomes.”

Homeowners who realized tremendous appreciation in the value of their properties are able to call their shots. 

“High-income households have been relatively unaffected. People who have done relatively well who have worked from home, stored up a fair bit of savings, haven’t spent as much going out and going on holiday can start to afford to move,” Pomeroy said.

Historically low interest rates are another advantage.

Home prices rise as rents fall

“What we’re seeing is this sort of equalization in housing prices between cities where prices are dropping or not going up and outside of those cities where prices are going up a lot,” he said. 


Rental prices have dropped because urban demand has fallen. Pomeroy predicts rental prices are likely to stay low.

“You can see that clearly in the rental data,” he said. “Rental inflation in the U.S. and in many other parts of the world has calmed down a lot in the course of 2020 and is likely to stay substantially lower than it was previously. A lot of rental demand is driven by people who move to cities in the first place.”

Baby bust

The demographic shift is also leading to lower birth rates. Births dropped 15% in the U.S. and China in 2020.

“I’ve argued for a while that a lot of the fertility rates assumptions that are embedded into everyone’s population projections over the next few decades are wildly optimistic,” Pomeroy said.

Uncertainty about the future because of the pandemic, environmental concerns associated with having more children, later marriages and the number of women in the workforce all suggest lower birth rates.

“We’ve also got a massive economic crisis that’s falling disproportionately on those people in their 20s,” he said. “So that big economic crisis then weighs on the willingness and ability for people to have children or [as] many children in the coming years.”

One big idea

Pomeroy predicts online shopping will account for half of all retail sales by 2030.

“That sounds like a mad number,” he said. “And when I first said that people were like, ‘OK, it’s 10, 15% today. How does it get 50?’”

He gives the example of buying an airline ticket. Ten years ago, it might have been a face-to-face encounter at a travel agency.

“More and more of our spending patterns are going to adjust like they have in the last decade. I think that generational shift plays a big role in that too. I think 50% of retail sales online by 2030 may not be as ridiculous as it might sound first off.”

Click for more FreightWaves articles by Alan Adler.

Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.