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.

Ambitious Osram Continental JV Among the Latest Casualties of the COVID-19 Pandemic

What started in 2018 as a strong joint venture between two successful companies in their traditional markets is scheduled to end in 2020.

Osram Continental was formed to take advantage of the rapid transition of motor vehicle lighting to LED-based fixtures by offering semiconductor-based lighting products. The long-term goal of the JV was not just to manufacture efficient LED vehicle lights, but also to connect the lighting to other vehicle systems to make travelling safer for the occupant and for other vehicles on the road.

Despite the rapid transition to LED-based vehicle lights, global motor vehicle production has stalled. According to Freedonia analysts, global motor vehicle production declined slightly in both 2018 and 2019 before sharply contracting in 2020 due to COVID-19 pandemic. This is the same length of time that Osram Continental has been active, and it has not provided the company with a strong market environment in which to launch. Currently, Continental doesn’t expect global vehicle production to return to 2017 levels until 2025 (Freedonia estimates have production returning to 2017 levels in 2023). Either way, the recovery is looking long. Securing contracts with motor vehicle OEMs is critical to Osram Continental’s success, and the recent weak performance and slow expected rebound have dealt a severe blow to the profitability of the venture.

All is not lost, however. The two companies are committed to continuing their development of automotive lighting products through a future cooperative agreement.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including our soon-to-be-released Global Motor Vehicle Outlook update as well as several Freedonia Focus reports (Motor Vehicles: United States, Hybrid & Electric Light Vehicles: United States, and Motor Vehicle Leasing: United States. 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.

  Automotive & Transport      Consumer Goods      Covid-19      Machinery & Equipment    

California Barring Unauthorized Restaurant Food Delivery Starting in 2021

On September 24, California Governor Gavin Newsom signed AB 2149 – the Fair Food Delivery Act. This law will bar last-mile delivery firms such as DoorDash, Grubhub, and Uber Eats from delivering food from restaurants without a signed agreement with the restaurant owner.

DoorDash has long used this tactic, claiming it’s a way to introduce new customers and show restaurants how DoorDash operations add value to their business. Others, such as Grubhub, have concentrated on “partnered” restaurants, only more recently adding “non-partnered” restaurants in areas where they have fewer partnered options to offer customers.

Independent restaurants have typically been more wary of participating with these delivery firms and have chafed against “non-partner” delivery operations. They note that they do not have control over the outcome of the delivery and the quality of the food upon arrival, but they would be blamed – rather than the app – if something were to go wrong. They also worry if prices and menu options are being accurately communicated to customers.

This is part of the continuing evolution of the relationship between last-mile delivery firms and the restaurants themselves. Restaurants are increasingly interested in keeping delivery operations in-house or having more control of the delivery experience in light of the business shift toward carryout and delivery during the coronavirus pandemic.  

For more information and discussion of opportunities, see Packaged Facts’ food- and beverage-related reports, including Food Carryout & Delivery and the companion report with timely consumer insights from our in-house survey capabilities, as well as US Beverage Market Outlook 2020: Grocery Shopping & Personal Consumption in the Coronavirus Era and US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus.

The Freedonia Group’s extensive collection of off-the-shelf research provides a strong complement to packaged food industry analysis, including US Restaurant Reopening: COVID-19 Impact on Supplies, Global Foodservice, Surface Disinfecting Wipes, and Global Industrial & Institutional Disinfectants & Sanitizers, as well as packaging industry titles such as Foodservice Single-Use Products, Global Foodservice Single-Use Products, and Global Single-Use Packaging Regulations.

Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Services    

Appliance Shortages Continue as Demand Spikes Amid Supply Setbacks

In 2020, there has been significant growth in demand for major household appliances in the US, just as supply disruptions have been greatly decreasing the availability of these products in many areas. During the spring, when the coronavirus pandemic began to affect many industries, consumers made a run on freezers in anticipation of needing more long-term food storage while being under quarantine.

Other appliances – including dishwashers, dryers, and refrigerators – have also experienced increasing demand because:

  • people are spending more time at home and using their appliances more, leading to a higher than average rate of breakage and need for replacement
  • home improvement spending is up as consumers are working on home projects in lieu of other activities outside of the home, causing more people to desire new appliances that replace an old but functioning unit

At the same time, manufacturing of appliances has been disrupted by the pandemic:

  • Factories around the world have had to close temporarily or to limit the number of people allowed to work inside.
  • Such major hubs for shipping and manufacturing appliances and parts as Mexico, China, and the US have been particularly affected by the pandemic.
  • Many appliance producers cut back on production voluntarily earlier in the year, incorrectly projecting that demand would be lower this year due to the global recession and decreased consumer spending.

For many consumers, particularly in the US (the second largest national appliance market in the world and the country with the highest number of coronavirus cases and deaths), appliance shortages are expected to continue throughout the year and possibly into 2021. Although suppliers have been ramping up production after seeing demand spikes, the backlog will continue.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly Global Major Household Appliances. 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.


Growing Interest in Front Porches to Support Demand for Building Materials<

A recent article highlighted a design trend that has been increasing in popularity over the past decade: the front porch. As people seek out ways to maintain the “social” in social distancing, it is expected that front porches will remain a popular amenity on homes in the near future. Not only will builders continue to install front porches on homes, owners of existing homes will increasingly expand or install new front porches. Freedonia analysts have noted here the continuing popularity of outdoor living, and the front porch can play just as important a role in outdoor living as decks and swimming pools.

Growth in installations of front porches will support demand not only for a wide range of building materials, but also a wide range of other products (to say nothing of the craftspeople charged with erecting these features), including:

  • poured and precast concrete for foundations, steps, and, in some cases, the porch material itself (e.g., the front stoop)
  • wood, composite, and plastic lumber used to make floors, railings, and other components of a porch
  • outdoor furniture such as couches, chairs, and other furnishings to accommodate family, friends, and neighbors
  • lawn and garden equipment, particularly potted plants or flowers and small decorations that add character to a home

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 and topics such as Outdoor Furniture & Grills (and the related COVID-19 Economic Impact Report on the topic) and Landscaping Products (and its related COVID-19 Economic Impact Report). Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Increased Bicycle Usage a Positive Consequence of the Coronavirus Pandemic

September 23, 2020 -There has been a significant increase in bicycle and e-bike sales in 2020. In March, for instance, e-bike sales in the US increased 85% compared to the same month in 2019. This spike is largely the result of people looking for alternative forms of commuting (especially since crowded public buses and trains are not as appealing today as they once were). This has a number of obvious health benefits for the rider, but it also helps cities reduce their carbon emissions and many of these cities are taking full advantage of this trend:

  • In the US, New York City legalized e-bikes and scooters in April and Denver, Minneapolis, Oakland, and Seattle, among others, are reallocating certain roadways for pedestrians and cyclists.
  • In Paris, 650 kilometers of temporary “cycleways” have been created, with the goal of making at least some of these cycleways permanent.
  • Milan is planning to transform 35 kilometers of streets for dedicated cycling and pedestrian lanes.
  • Brussels is creating 40 kilometers of bike lanes in and around the city center.

While many of these transformations were originally planned to be temporary, the hope is that much of this redesigned infrastructure will become permanent. Given the spike in e-bike sales this year in both the US and Europe, it looks increasingly like these changes will remain.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly Global E-Bikes. 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.

  Consumer Goods      Covid-19