According to Head of Municipal Research and Analytics Tom Kozlik and some other firms polled by Bloomberg, municipal issuance amounts in 2022 are projected to exceed  municipal supply in 2021. Bloomberg’s data ranks Kozlik’s issuance projections as the second highest at $495 billion.

Kozlik stated in his Nov. 22 commentary that if November and December 2021 yield average issuance amounts, the calendar year’s total would be close to $460 billion. This would align with his forecast for 2021. If issuance amounts in 2022 match Kozlik’s projections, the market will see an 8% increase from 2021.

According to Kozlik, a higher issuance amount in 2022 would encapsulate what he calls the Golden Age of Public Finance.

“State and local governments may not be as stretched with their budgets next year because federal relief in 2021 has helped them offset the economic side effects of the pandemic,” said Kozlik. “If municipalities are on the fence about pursuing infrastructure projects, their financial flexibility—that has largely been supported with COVID-19 funds—might make those endeavors easier to achieve.”

Kozlik believes that uncertainty related to the Omicron variant will likely continue for a few weeks in December. Variant variations may be needed in vaccine boosters. As a result, possible financings could be put on hold in the near term. As of now, Kozlik expects this to cause a delay as the financial and medical community adjusts. Therefore, issuances targeted for December of 2021 could be punted to 2022.