According to fourth quarter results from Phoenix Management’s “Lending Climate in America” survey, supply chain constraints are the biggest concern for the U.S economy entering 2022.

The COVID-19 pandemic has amplified the carrier shortage, causing major supply chain issues. There is concern the holiday season will worsen the economic situation. According to Phoenix’s survey, he majority of lenders (71%) believe supply chain disruptions will lead to lower consumer spending and delay economic recovery. Meanwhile, 29% of lenders believe as consumers learn to navigate this post-pandemic environment, holiday spending will keep the economic recovery constant to offset the supply-chain impact.

Phoenix’s fourth quarter survey asked lenders what they expect to be the biggest challenge for borrowers heading into 2022. Half of the lenders surveyed (50%) said supply chain constraints will be the biggest challenge that borrowers will face heading into 2022. Of the lenders surveyed, 43% cited labor costs as a concern, while none predicted COVID-19-related constraints to be a challenge.

In Q3/21, real GDP dropped to an annual increase of 2%. According to economists, the third quarter’s low GDP was not due to a lack of consumer spending but rather a lack of supply. When asked, how the Fedeeral Reserve will respond in respect to interest rates, 79% of lenders said the Fed will increase interest rates after Q1/22, while 21% of lenders expect the Fed to hold rates through 2021 and begin increasing them in Q1/22.

In Q4/21, lenders’ optimism in the U.S. economy in the next six months decreased slightly, as the GPA for the U.S. economy in the near-term decreased to 2.21 from the Q3/21 result of 2.23. While there was a decrease in near-term optimism, long-term optimism increased by 13 percentage points to 2.36 from the previous quarter’s results of 2.23.

“Supply chain constraints appears to be the biggest concern for lenders and the U.S. economy throughout the holiday season and into 2022,” Michael Jacoby, senior managing director and shareholder of Phoenix Management, said. “With potential disruptions due to shortages, the majority of lenders believe it will lower consumer spending and negatively impact economic recovery in the near term.”