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.

Domestic Textile & Apparel Companies Developing Safety Masks

Although N95 respirators are the face masks most in demand by healthcare workers and first responders, they require a meltblown polypropylene filter material that is not easily produced at the high quality necessary for it to be effective. Therefore, most of these products are still being made by companies such as 3M and Honeywell that already have knowledge and capabilities in this area.

However, a coalition of apparel and textile companies in the US have begun supplying a useful but less sophisticated class of face masks. Because these companies are not technical textile companies, they are making masks with jersey cotton and antimicrobial coatings using a design approved by the US Department of Health and Human Services. These masks were also approved by the US Food and Drug Administration so that they could be labeled as medically certified for use in hospitals. While they are not able to filter out viruses, they are better than nothing for use by healthcare workers interacting with patients or for the general public in situations where there is not an known infection present.

Others are developing a mask that is generally reusable but that features a replaceable meltblown polypropylene N95-level filter. Another group, Stop the Spread, is innovating by promoting partnerships. The organization is a new coalition of volunteer CEOs seeking to connect businesses that can provide different levels of assistance in the production of goods needed to respond to the COVID-19 crisis.

Joint ventures, technology transfers, and industry coalitions will allow companies to adapt to the changing conditions and needs of the COVID-19 crisis and expand production capacities into needed areas. The assistance of regulatory agencies that can either fast-track approval or offer a pre-approved design will allow manufactures to respond more nimbly.

For more information, see The Freedonia Group’s Global Nonwovens, US Nonwovens, Global Filters, Global Medical Disposable Supplies, and Disposable Medical Supplies inthe US reports. Each report includes analysis of competitive strategies, including joint ventures and merger and acquisition activity. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Textiles & Nonwovens    

The Defense Production Act & Recasting Manufacturing Capacity For Ventilators

In a time of lean manufacturing and just-in-time operations, there are often limited stocks available for supply chain crunches or other sudden shifts in demand. So on Friday March 27, President Trump used the Defense Production Act to compel General Motors to produce ventilators, even as insiders noted that the company was already putting workers on an urgent project to do so.

General Motors, Ford, and others are repositioning their operations to produce or procure through their supply chains the components needed by ventilator manufacturers. They and others are also using capacity made available by reductions in their regular manufacturing operations due to reduced demand or challenges accessing key components.

Because ventilators are complex items produced under strict safety measures that often require medical-grade plastics and cleanroom operations that a vehicle manufacturer may not have, joint ventures are needed. Stop the Spread, a new coalition of volunteer CEOs seeking to connect businesses that can provide different levels of assistance in the production of goods needed to respond to the COVID-19 crisis, helped connect GM with its partner Ventec among other companies that can help GM meet its needs.

Manufacturing firms have long used joint ventures to adapt to changing conditions, improve technological capabilities, and expand production capacities. Companies will need to dive into such operations in more depth to respond swiftly to the coronavirus pandemic. Considering how current capabilities align with the needs of other businesses and how current needs in industry and health align with their operations would be the way to start.

For more information, see The Freedonia Group’s extensive catalog of off-the-shelf research. Each report includes analysis of competitive strategies, including joint ventures and merger and acquisition activity. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Concerns About Coronavirus Transmission Promote Use of Single-Use Plastic Bags

One unintended consequence of the coronavirus outbreak has a been a resurgence in the use of single-use plastic bags. Derided by many due to their perceived negative effects on the environment, many local and state governments across the US – including the key states of California and New York – have banned use of or begun charging fees for single-use bags in recent years, and leading grocery retailers announced plans to stop giving them away at their stores.

However, a growing number of stores are again giving away single-use plastic bags as part of their efforts to reduce the spread of coronavirus. In fact, one state – New Hampshire – has temporarily banned reusable bags, and Maine postponed the implementation of its plastic shopping bag ban. The reason: concerns about the cleanliness of reusable bags. While coronavirus can be removed from plastic surfaces (many plastic shopping bags are made from a high level of recycled plastic content), few shoppers clean their own reusable bags after each use. Thus, to minimize concerns about coronavirus spreading via cross-contamination, retailers are encouraging and again supplying single-use plastic bags.

While the long-term effect of these efforts remain unclear – no one is sure how hygienic practices will change as the virus becomes less of a threat – in the short term, at least, demand for single-use plastic bags is expected to rise.

This presents an opportunity for plastic bag manufacturers to reargue their position that plastic shopping bags – which are readily recyclable (even if the recycling rate remains low) and often made with high post-consumer recycled content – are the more sustainable option compared to polypropylene reusable bags, which are not recyclable. However, now they are adding the hygiene angle. In fact, the Plastics Industry Association has already requested that the US Department of Health and Human Services endorse plastic bags as the safest choice during this pandemic.

To counter that argument and support what had been the increasing consumer habit of carrying reusable bags, the reusable bag industry will need to educate consumers about adequate bag cleaning measures and ensure that the bags are able to withstand frequent cleaning cycles.

For more information, see The Freedonia Group’s Retail Bags report as well as total coverage of the Plastics and Packaging industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Packaging      Plastics & Other Polymers    

Lumberyards & Hardware Stores Declared Essential Businesses

A number of governors – including those of our most populous states – have closed all but “essential” businesses in an attempt to limit the spread of the coronavirus.

Fortunately for the construction industry, most governors have included lumberyards and hardware stores as among those businesses classified as essential. In many cases, owners and industry associations have pushed to keep these business open due to such factors as:

  • the large number of people employed by the industry ­– not only by lumberyards and other retail outlets, but also in the construction industry as a whole
  • the key role lumberyards play in ensuring that construction materials can reach contractors and other construction professionals
  • the broad range of products offered by these stores – many of them carry items essential to health and safety, such as cleaning supplies, waste receptacles, toilet paper, and wipes, as well as items needed to maintain a house, which become more important as consumers are told to stay at home
  • the ability of stores to deliver goods while minimizing contact – such as by limiting hours, arranging for curbside pickup and delivery, or by coordinating deliveries when few people are at job sites

Indeed, as state and local authorities increasingly consider erecting temporary medical facilities or converting existing structures (such as college dormitories) into sites for housing coronavirus patients, demand for building materials is expected to climb: proving that the nation’s lumberyards, hardware stores, and other construction products retailers are “essential”.

For more information, see The Freedonia Group’s extensive research on the construction & building products industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Automation: Positioning Companies for Reshoring & COVID-19

Companies that have embraced a high level of automation are better suited to keep operations flowing in the age of social distancing.

But for most industries, this is not new. In fact, this trend has been underway for quite some time. Some industries have adopted automated processes as a way to produce goods in the US that are more cost competitive with those sourced from Asia, particularly since rising employment costs and trade uncertainties with China had already made goods produced overseas not always the given lower cost alternatives they once were.

More manufacturers are noting another benefit to high-tech operations: flexibility. Greater use of technology allows companies to better operate in a world where uncertainty is a common condition.

Automation also allows manufacturers to develop the next generation of products and to perform more complicated tasks via innovations in advanced software and sensors. These underlying software and sensor improvements are leading to product developments that span capital goods industries.

However, one potential downside to automation at a time like this is that the skilled labor pool capable of servicing this equipment is small. If qualified technicians are out of commission with illness, it would be a lot harder to get replacement personal who can handle these pieces of equipment than it would be to just add more unskilled labor to a more manual manufacturing process.

For more information, see The Freedonia Group’s coverage of industrial components and machinery and equipment industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


  Covid-19      Industrial Components      Machinery & Equipment