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.

Touchless Condiment Dispensers: Meeting the Need for Greater Hygiene & Reduced Single-Use Packaging

Single-use foodservice packaging has become the target of increased environmental scrutiny in the US, Europe, and many Asian countries. However, much of that scrutiny and the initiatives resulting from it – such as reduced usage of disposable coffee cups and bans on expanded polystyrene (EPS) containers and certain plastic bags – have been put on ice by COVID-19. The pandemic reversed these recent developments by causing renewed demand for single-use cups and other disposable tableware as restaurants shifted away from in-house dining to increased pickup and delivery business.

While the pandemic has created something of a respite for many affected products, one food producer has gone in a somewhat different direction. Kraft Heinz has debuted the Heinz Keystone Automatic Dispenser, which uses “no touch” technology to dish out half-ounce portions of ketchup, mustard, mayo, ranch, BBQ sauce, and other sauces and condiments.

No-touch dispensers are reassuring to customers concerned with surfaces touched by other people (think of bathroom soap or paper towel dispensers). They also reduce packaging requirements associated with packets and other single-serve formats, and reduce (but don’t eliminate) the labor costs of constant vigilance on the part of restaurant workers in light of stricter hygiene regimens brought on by the pandemic.

For more information and discussion of market 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. The Freedonia Group’s extensive collection of off-the-shelf research provides a strong complement to packaged food and restaurant industry analysis, including  US Restaurant Reopening: COVID-19 Impact on Supplies and Global Foodservice, as well as packaging industry titles such as Pouches, Foodservice Single-Use Products, Global Foodservice Single-Use Products, and Global Single-Use Packaging Regulations.

  Covid-19      Food & Beverage      Packaging    

Expected Infrastructure Investments to Promote Demand for Building Materials

An area of potential cooperation between Republicans and Democrats is that of funding infrastructure construction, as members of both parties recognize that the US has a significant backlog of projects that will soon need work. In addition to the prospect of the thousands of jobs needed to fix and repair roads and bridges, water and sewer lines, and other public works, there is also the potential for creating jobs for the many people employed in the production and delivery of these materials. Rising spending on infrastructure construction will spur demand for such materials as:

  • asphalt for road paving and reconstruction
  • cement and concrete (both poured and precast) for building bridges, roads, culverts, and other public works projects
  • pipe – either plastic, metal, and concrete – for water and sewer work
  • steel – used to make girders, joists, rebar, and other structural components

Furthermore, the new administration is expected to promote a variety of “green” projects that can serve to promote the development of alternative energy sources, reduce carbon emissions, and boost environmental stewardship, while also providing jobs sorely needed in the wake of the COVID-19 pandemic. These green projects can include the installation of:

  • solar panels – supporting demand for metal components need to erect these arrays
  • wind power arrays – boosting demand for metal and fiber composite turbines and related components
  • geosynthetics, vegetative roofing, and pervious concretes to promote solutions to urban water runoff issues
  • wiring, conduit, and other materials used to upgrade the nation’s broadband network

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.


Strong Sales at Home Depot & Lowe’s Show Continuing Effects of COVID-19 Pandemic

This week Home Depot and Lowe’s released their latest quarterly earnings reports, with both companies reporting strong growth in sales for the third quarter of 2020. A number of factors contributed to these banner reports, key among them:

  • continuing high lumber prices, which bolstered profit margins
  • sustained consumer interest in DIY projects
  • increasing sales to professional customers as summer weather and continuing strong demand for new housing drove construction activity across the US
  • rising online sales – consumers are increasingly purchasing items online to minimize risk of COVID-19 exposure
  • strong growth in sales of holiday items – Halloween and Christmas – as consumers looked to add festivity and normalcy to their lives

Looking to the fourth quarter, it is expected that both companies will report continuing strong growth in sales. While winter weather will bring a slowdown to both DIY and professional construction projects, Home Depot and Lowe’s – as well as many other building retailers – can expect strong sales in other areas, such as:

  • lumber and other building materials, where prices will remain high
  • holiday-related purchases of big-ticket items, such as appliances
  • rising sales of winter items, such as snowblowers, rock salt, and space heaters
  • continuing solid sales of seasonal items, such as holiday decorations and lights

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.


October Retail Sales Report Shows Continued Gains for Building Materials Retailers

Last week’s release of the October retail sales report showed yet another month of growth for building material and garden equipment suppliers, with monthly sales up 3.6% from September to $39.4 billion. These gains can be attributed to a number of sources, key among them:

  • continuing homeowner interest in DIY home improvement projects, such as installing flooring, creating home offices or gyms, or deck building
  • increases in single-family housing starts, spurring the sale of lumber, prefabricated building components, and millwork and other materials used to finish a home
  • a surge in sales of plywood and emergency repair products in those parts of the US affected by severe weather, especially areas in the path of Hurricane Zeta

Compared to last year, retail sales by building material distributors and garden equipment and suppliers are more than 13% higher; however, there are concerns that this sales growth might decline through the rest of year. Retailers must be wary of:

  • an expected slowdown in building construction activity – especially in the northern half of the US – as inclement weather becomes more frequent, limiting opportunities for outdoor construction work
  • homeowners reducing spending on outdoor landscaping products and garden supplies as the weather turns
  • climbing infection rates of COVID-19, which may cause state and local governments to limit or shut down retail activity

Even with the prospect of a slowdown – or even a decline – in sales in November, building materials retailers are poised for an outstanding year of sales growth, despites the challenges posed by the coronavirus pandemic.

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.


October Retail Sales Report: Categories Slow as COVID-19 Cases Rise & Economic Relief Remains Elusive

The October advance monthly retail sales report was released on November 17. One thing worth noting – for the uninitiated – is that this information is linked to sales by type of retail outlet, but that doesn’t fully align with sales of product categories in some cases. For instance, sales of sporting and recreation goods might be lower than one would expect because the data only count sales at stores that primarily sell these products and do not include items in this category that are sold at mass merchants like Walmart and Target, whose sales are classified elsewhere.

The October report shows some growth over September sales, but declines in the same period in more categories. The growth that happened was muted and generally below expectations. Sales were hampered by rising COVID-19 cases in much of the country as well as economic uncertainty as hoped-for government stimulus and financial support programs did not come to fruition.

The big winners overall for the year continue to be the same ones from last few months. However, even as they continue to show strength against same-month 2019 sales, they are increasingly off pandemic highs:

  • grocery/food retail stores – October 2020 dipped 0.2% from September 2020, but October 2020 was still up 10.3% from October 2019. This is a trend grocers and other food experts expect to continue as consumers continue to eat and cook at home more than pre-pandemic.
  • building materials/garden equipment dealers – October 2020 was only up 0.9% from September 2020 but still up 19.5% from October 2019. Although experts expect the DIY trend to hold, these elevated sales may falter as the seasons change and weather cools in much of the country; still, October sales were supported by things such as seasonal décor and outdoor heaters, something expected to continue through the rest of 2020.
  • retailers that operate outside of brick-and-mortar locations (including e-commerce not linked to conventional stores) – October 2020 was up 3.1% from September 2020, but October 2020 was still up 29.1% from September 2019. The convenience of e-commerce will make this trend sticky beyond the pandemic.

For the most part, the retailers mentioned above remained open during stay-at-home orders because they were considered “essential” businesses. Additionally, their product mix includes categories that continue to benefit from the shift toward staying home – e.g., home cooking over eating out and DIY home and garden improvements. Many consumers are still largely limiting their shopping to these types of retail outlets.   

Sales at sporting goods, hobby, musical instrument, and book stores – which saw rapid gains in June 2020 – experienced declines from that spike during July and August before improving in September and falling again in October. While back-to-school shopping and fall sports spending supported sales in September, October sales were more likely to be early holiday shopping. October 2020 sales were up 12.4% from October 2019.

A few other highlights:

  • furniture stores – October 2020 saw small dips, falling 0.4% compared to September 2020. This category is still in positive territory year-over-year as October 2020 sales were 5.2% greater than in October 2019. Creature comforts and furniture to support at-home work and learning continues to drive sales.
  • gas stations – October 2020 was up 0.4% from September 2020 but still down 14% from October 2019. People continue to leave home less often, and a reduced level of commuting and road-tripping is keeping sales at gas stations low.
  • clothing stores – October 2020 was down 4.2% from September 2020, which had been an improved month in an overall bad year for clothing sales. October is typically a month that signals fresh buying of cool weather clothes as the seasons change, but sales in 2020 were down 12.6% from October 2019. Bankruptcies are continuing in this market, although some are making it through and reopening after restructuring. Online sales and curbside pickups help sales at these stores.
  • Food services with drinking places dipped again in October, falling 0.9% from September 2020. Cooler weather is moving diners away from outdoor dining options that supported such sales in warmer weather. October 2020 sales are still seriously lagging 2019 same-month sales (-14.2%).

Economists and other interested parties – including Freedonia analysts – will be closely monitoring next month’s retail sales report to see how the holiday shopping season kicks off with Black Friday specials starting early and running through much of the month. There remains some hope on the horizon for the retail sector as sharply curtailed sales on services (limited travel, dining out, away from home entertainment, personal care services) leave most households with more money to spend on goods at retail, particularly as the holiday season approaches. Still, spikes in COVID-19 cases will hurt any retail that is not done via e-commerce as consumers again stay away from public places and as some areas limit or close dine-in options again.

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. Food- and beverage-related reports are also available from our sister publisher, Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Construction & Building Products      Consumer Goods      Covid-19      Food & Beverage      Packaging      Textiles & Nonwovens