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.

Pandemic-Related Home Schooling – Alone or in Pods – Is Driving Interest in Alternative Education Spaces

They say that necessity is the mother of invention. As more families are facing the real or presumed likelihood of their children starting the school year outside of a traditional school building, they are looking for new places to do their lessons alone and with a small group of other children.  

Families with free space within their homes are creating dedicated schooling areas in basements and garages. This sort of a project could be anywhere from a minor project of moving around existing furniture to a mid-level improvement with new furniture to a major renovation with drywall, new electrical work, extended heating/cooling, more hospitable flooring, and new lighting.

However, families that are hosting or supporting learning groups with children from multiple families are looking for work spaces outside their personal homes. The most basic of these options includes setting up open-sided tents in their backyard, expecting that children will need to keep their coats on as the weather cools. Some families seek to repurpose family RVs as modern one-room schoolhouses. Still others are adding tiny homes (more formally known as accessory dwelling units) to their property, figuring they can be used as guest spaces or even Airbnb rentals after the pandemic. Some commercial real estate agents are hoping to repurpose vacant store fronts as pod school locations outfitted with high-speed internet and large flat-screen monitors.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Construction & Building Products      Covid-19      Services    

COVID-19 Pandemic & Rise of Electric Vehicles Continue to Affect Refining Industry

Like many other segments of the economy, petroleum refiners have been severely affected by the COVID-19 pandemic. Steep declines in air travel have caused demand for highly profitable jet fuels to plummet, while US consumers – many of whom now have zero-mile commutes – use far less gasoline. Thus, refiners – like downstream producers and other petroleum industry participants – have seen declines in profitability.

A recent article showcased the difficulties faced by the refining sector. While demand for gasoline and some other petroleum products has largely rebounded as shelter-in-place orders have been lifted, jet fuel use remains low, causing refiners to move to keep facilities closed or to operate at lower capacities, further affecting their profitability.

Furthermore, another threat looms on the horizon: the potential of the electric vehicle, which largely obviate the need for gasoline. While many are familiar with Tesla, a number of other firms are looking to enter the electric vehicle market. Monday’s announcement that Lordstown Motor Company – a firm dedicated to the manufacture of electric pickup trucks – would be going public as part of a reverse merger, demonstrated the continuing interest in electric vehicles. The more widespread introduction of electric-powered trucks and automobiles would cause severe disruptions to refiners, as a key end use for their products would slowly shrink. While packaging has boosted the fortunes of many refiners due to heightened interest in single-use plastics, this, too is not expected to last, especially once the COVID-19 pandemic passes.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the COVID-19 with a comparison to historical recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Chemicals      Covid-19      Energy & Petroleum      Machinery & Equipment    

Lumber Supply Issues Continuing to Provide Challenge to Construction Industry

As the US economy continues to grapple with the effects of the COVID-19 pandemic, certain parts of the construction industry have proven to be bright spots. As we’ve seen, DIY construction, home renovation by professionals (particularly of outdoor products like decks and fencing), new housing construction, and some types of nonresidential remodeling has posted a recovery from declines seen in March and April.

However, a shortage of lumber may put a damper on further growth in the construction industry.

Sawmills curtailed activity in the early days of the pandemic, expecting (like many others) sharp drop-offs in construction activity. However, governors in many states declared construction an “essential” industry, keeping job sites humming – if at slightly reduced volumes. Furthermore, many homeowners found themselves at home with time on their hands to complete projects, such as building decks or creating a new home gym or office. Thus, demand for lumber surged.

With supplies “extremely lean,” as reported by one producer, it is expected that this shortage of lumber – and correspondingly higher prices – will continue for some time. This could have a number of deleterious effects to the US economy, such as:

  • slowdowns in new housing activity as builders erect fewer homes (that will cost more to purchase)
  • homeowners delaying renovation projects until lumber prices reach more reasonable levels
  • contractors adjusting operations – such as having fewer workers on shifts – to account for higher material costs
  • suppliers looking to increase imports of lumber – despite the prospect of tariffs – to make up for the shortage of supply

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.