The roaring 20s are on their way, if a little late.

Adding to the widely quoted data about excess UK household savings over the past year, the credit rating agency, Moody’s, released data this week on global savings rates. In short, the pandemic has produced a glut. Consumers around the world have stockpiled an extra $5.4tn of savings since the COVID pandemic began. That’s a lot of haircuts.

Furthermore, the consumer confidence index is at a 15 year high, paving the way for a very strong rebound in spending as business reopens around the world.

A number of forecasts exist for how much of the $5.4tn of excess savings will be spent, but if a third of it is deployed it would result in a boost to global GDP of just over 2% this year and next. For context, global GDP in 2020 was $84tn. With interest rates on bank savings still negligible the meagre rewards for saving are an ongoing incentive to spend.

All the sectors that have suffered the worst impact of lockdowns – from pubs and restaurants to shops, hairdressers and beauty salons, gyms and the entire leisure sector – stand to see a significant, and much needed, boost as the economy reopens. The wider economy is like a “coiled spring”.

In the US alone, households have piled up more than $2tn in extra savings according to the Moody’s data. This is before considering the giant $1.9tn stimulus the Biden government announced last month. Significant parts of that stimulus package are coming in the form of direct payments to individuals - a family of 4, for example, with income of less than $150,000 will receive in the region of $13,000, mostly in the form of a cash payment.

In the US this points to an “extended consumption splurge”, according to Krishna Guha and economist at Evercore investment bank. All of this is gravy for the advertising market, which is both highly correlated to consumer spending and overall GDP. The recent Dentsu adspend report forecasts a 5.8% growth in overall spend in 2021, tracking the forecasted recovery in GDP. Out of Home spending is forecast to increase 15% this year, largely based on a bumper 2nd half of the year. This is now starting to show up in the availability forecasts from media owners, with ClearChannel Adshel and Roadside digital inventory edging towards 100% optioned from the end of May into June.

The recovery is also starting to show up in media holding companies share prices. The WPP share price is up 25% in the last 2 months alone, and several members of the board have been buying their own shares at a furious pace. There aren’t many better leading indicators than that.

The roaring 20s are underway, albeit 12 months late.