US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Companies Adjusting as Consumer Behavior Begins to Return to Pre-Pandemic Norms

While the coronavirus – particularly the delta variant – remains a threat to the US economy, many consumers are guardedly optimistic about the future. Indeed, for those who have been fully vaccinated, there is much more freedom of activity, and the prospect of dining out, shopping, and doing other activities without wearing a mask has encouraged people to return to the modes of behavior they exhibited before the pandemic. Indeed, these changes are taking hold in the economy in surprising ways.

One change is that as people re-embrace in-store shopping, they are relying less on online purchasing. Thus, UPS reported that in the second quarter of 2021, it shipped fewer packages than the year before. While package shipping volumes are expected to remain high going forward, it is anticipated that as consumers continue to return to stores, shipments of packages will continue to recede. This, in turn, will affect demand for such packaging materials as:

  • corrugated boxes and sleeves
  • plastic films and bubble wrap
  • tapes and other materials used to secure packages

Similarly, as concerns about the virus lessen, demand for cleaning products will also be affected. Indeed, the manufacturer of Lysol reported a decline in quarterly sales as consumers were less likely to religiously disinfect surfaces – a practice that became commonplace in the early stages of the COVD-19 pandemic when transmission vectors were less certain. Much as with UPS, while demand for these products is expected to remain high, sales are expected to recede from their elevated levels as consumers become less concerned about surface disinfection practices.

One thing that is NOT expected to recede going forward: the prices consumers pay for these and other products. Manufacturers of a wide range of items – food and drink, consumer products – expect prices to continue to rise throughout the rest of the year. While rising demand is playing a part in these rising prices, many of these price hikes are due to such factors as:

  • rising costs of raw materials
  • higher transportation and shipping costs
  • higher prices and shortages of packaging materials

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Packaging area, as well as analysis from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Packaging    

Masks… Still. Masks… Again.

While many never stopped wearing masks and some never wore them consistently and properly, guidance from the CDC this week shifted back to recommending wearing masks indoors, regardless of vaccination status, particularly in areas with high transmission of COVID-19.  

In response, some major retailers such as Walmart are reintroducing mask mandates for their staff and placing signage that strongly encourages customers to wear masks as well. Other companies are considering following suit.  

Additionally, the American Academy of Pediatrics released guidance recommending that all students over 2 years old and all staff – regardless of vaccination status – wear masks while indoors.

The result of all this extended and reintroduced mask wearing means sales of masks have been perking up again as well. The reusable masks many of us have been wearing for months are starting to look it, particularly those worn by children who are prone to fidgeting with or even chewing on them. Faced with continued occasions to wear them and the prospect of wearing them for another season or another year, many are starting to shop for fresh masks again.

First responders and medical personnel still need their stocks as well, but suppliers of N95 medical-grade masks, such as 3M and Honeywell, are seeing decelerations in demand. Still, suppliers are being sure to keep production flexible and ready for future emergencies.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly titles such as Global Disposable Masks & Respirators, Global Meltblown Nonwovens, Global Spunbond Nonwovens, US Nonwovens, and Medical Nonwovens in the Textiles & Nonwovens segment. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Packaging Supply Challenges Hit Liquor, Maple Syrup Suppliers & More

Shifts in demand, labor challenges, raw materials shortages, and shipping difficulties have made things tough for the whole pandemic-era economy. However, some challenges are industry-specific.

Any type of packaging that is niche is having issues with lead times and supply chains. The “why” of this situation is not complicated: if there aren't many suppliers of what you want, there is no one else to turn to if your usual supplier is unable to fill your order in time or in the quantity you need.

Maple syrup suppliers are one group hit by this challenge. Real maple syrup is often sold in recognizable plastic jugs, often with the farm’s information printed directly on it. Maple farms are finding their typical lead time to get more jugs has risen to 10 months and longer. Trying to find blank jugs (that don’t have the farm’s customized printing and require adhesive labels) on the secondary market isn’t any easier, and it is also more expensive.

Liquor suppliers are also struggling to have enough of the types of glass bottles they are used to using. While some are able to shift to other types of packaging, liquor bottling rules and customer preferences have made that challenging. Until stocks are refilled, consumers may periodically see shortages of certain products, might find it packaged in a different container, and will certainly see some price increases.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Packaging area. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Packaging    

Outdoor Living & IPOs – Grill Suppliers & Retailers Are the Current Hot Thing

We’ve long been talking about the boom in backyard sanctuaries and entertainment spaces during this pandemic era, from pools and playground equipment to gardens and tools to furniture, grills, and fire pits.

July saw two key suppliers of grills and grill accessories (Weber and Traeger) and a leading online retailer of grilling equipment and other outdoor products (BBQGuys) announce plans to file for initial public offerings. This merged the trend of pandemic-era outdoor living with the strong stock market that has seen a large number of IPOs over the past year as companies emerged to capitalize on the growth. Many of these IPOs are using the special-purpose acquisition company (SPAC) form that BBQGuys is using; it is seen as a more flexible option with less restrictive reporting requirements.

Grill companies have benefited not only from the general outdoor living and entertaining trend, but also from the work-from-home trend. As more people worked from home, they tended to grill more meals at home – not just dinner on the weekends, but also lunch and even breakfast. Others who had previously not had the time to use slower outdoor cooking methods, like smoking, found that that changed as they could now start a meal earlier in the day while they were working at home and have it ready for dinner.

The group of people who have found their working situation has changed is still sizable. In The Freedonia Group’s National Online Consumer Survey conducted in June 2021, 10% of respondents noted that their change in working from home was temporary and has reverted to pre-pandemic patterns, but

  • 33% of respondents noted that they were still working from home full-time more because of the pandemic
  • 24% were working from home part-time more because of the pandemic
  • 24% were working from home occasionally more because of the pandemic

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Consumer Goods area with titles such as Outdoor Living 2021, Outdoor Kitchens, Outdoor Furniture & Grills, Landscaping Products, Power Lawn & Garden Equipment, and Outdoor Lighting. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods    

Design Your Way Out of a Shortage?

In many cases, a change in product design or how a product is used is not a near-term solution to a shortage. However, manufacturers that can’t get the materials they need and believe this is more than a short-term challenge for the next few months are looking for longer term solutions.

This increasingly includes making changes to their product in terms of what materials are used to make it, how it is packaged, how it is shipped, and if there are reasonable alternatives to the product altogether.

For instance, a global sand shortage has challenged many industries. We’re not talking about sand for your kid’s sandbox. This is sand for reinforcing beaches and shorelines hammered by storms, and sand used to manufacture concrete and glass (the former used in buildings, roads, and bridges and the latter in buildings, electronics, insulation, packaging, and more).

Industries are looking for ways around this challenge. Examples of such efforts include:

  • repurpose ground down plastic waste, old car tires, or glass waste as a substitute for some of the sand used to produce concrete
  • change construction design to require less concrete
  • build less of some of the things that are made with concrete (e.g., driveways and sidewalks) or use an alternative material (e.g., aggregate, stone pavers, or more sustainable pavers made with waste materials)
  • develop a sustainability certification for sand mining

Creatively considering options, including those which had previously been too expensive to be practical, will allow all industries facing material shortages or longer term supply chain challenges to think beyond the current crisis and stay ahead of the competition.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Flat Glass, Global Cement & Concrete Additives, Global Construction Aggregates, and Landscaping Products. Freedonia Custom Research is also available for questions requiring tailored market intelligence.