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.

Gojo Industries: Investing for the Future & Expecting Continued Elevated Demand for Purell

Several years ago, we helped with a CBS Sunday Morning story about Gojo Industries and its most famous product, Purell hand sanitizer. It was fun for us to participate in a story about an industry we’ve covered extensively and a local company making good. (Local enough that one of our analysts caddied for Gojo’s former CEO some 40 years ago, prior to the introduction of Purell.) At the time, Gojo’s main product was industrial hand cleaner, and the company was still trying to break into the consumer product segment.

But the COVID-19 pandemic really changed the equation for Purell. The pandemic changed hand sanitizer from a product most people used occasionally – when they handled something disgusting or were in the car or somewhere else where regular handwashing wasn’t possible. Now, hand sanitizer has become essential, not only in healthcare environments, but in offices, schools, stores, and pretty much everywhere else.

Increased demand led to a slew of new market entrants, including some temporary suppliers like distilleries and certain major consumer product suppliers. While it seems unlikely that demand for hand sanitizers will remain at the ultra-elevated COVID-19 level, Gojo is betting that the market’s new normal size is going to be a lot larger than it was when we got to talk about it on TV – they’ve done more hiring, increased R&D spending, and added warehouse space. And although most of us hope that our homemade masks became peculiar souvenirs pretty soon, the number of us with hand sanitizer on our desks, in our purses, in our cars, and some other handy (get it?) spot seems unlikely to decrease very much.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Industrial & Institutional Cleaning Chemicals, Global Industrial & Institutional Disinfectants & Sanitizers, Surface Disinfectant Wipes, Global Disposable Masks & Respirators, and Global Disposable Medical Gloves. 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.

  Chemicals      Consumer Goods      Covid-19    

Optimism Indicated for Residential Remodeling Market in 2021

2020 was an interesting year for the residential remodeling market in the US. Expectations of growth receded as the COVID-19 pandemic reached every corner of the economy. However, the market soon recovered as homeowners – either on their own or with the help of professionals – engaged in a wide range of improvement projects. From adding home gyms and offices to installing the decks and pools needed for the family staycation, homeowners undertook many projects that spurred demand for lumber and a wide range of other building materials (trends that were frequently mentioned on this site).

According to The Freedonia Group National Online Consumer Survey (conducted November – December 2020), 39% of respondents reported undertaking home improvement projects because of changes associated with the coronavirus pandemic, while 32% reported delaying home improvement projects for the same reason.

The question for many in the industry now is: What will the residential remodeling market hold for 2021?  Two recent articles imply that the market for 2021 will resemble that of the second half of 2020.

The first ­– a survey of remodelers sponsored by the National Association of Home Builders – showed that confidence was high among respondents. Indeed, the survey showed that contractors who specialized in small- and medium-sized jobs (those costing $50,000 or less) had higher confidence than those who mainly performed large-scale work. This shows that while some are leery of attempting larger remodeling projects, homeowners – and their budgets – are confident in performing more economical jobs (such as remodeling a bathroom or installing new floors) to improve the look and boost the value of their residences. This caution is found in The Freedonia Group National Online Consumer Survey (conducted November – December 2020) as 41% of respondents reported that the pandemic has negatively affected their personal job situation and 47% reported that it negatively affected their ability to make larger purchases.

A second article also demonstrates the strength of the residential improvement and repair market, reporting that home improvement spending is anticipated to increase in 2021. Those Americans who saw their economic conditions improve in 2020 will be able to spend more on their homes, while others will take advantage of a favorable lending environment to do so. Furthermore, the prospect of widespread vaccine availability will boost consumer confidence while making it easier for work crews to enter homes and complete large-scale projects, such as kitchen remodeling.

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.


COVID-19 Pandemic to Continue to Affect Commercial Construction in 2021

The COVID-19 pandemic affected the commercial construction market in a number of ways in 2020:

  • Many projects ground to a halt as funding for projects – both from banks and businesses themselves – evaporated.
  • Work at many sites slowed as contractors adapted to the new realities of social distancing, more frequent cleaning of equipment, and materials shortages.
  • Construction professionals shifted operations to set up emergency medical facilities, testing sites, and temporary housing for healthcare workers.

Overall, however, commercial construction activity contracted in 2020, as new realities – working from home instead of commuting to the office and shopping via Amazon rather than a trip to the mall – meant that many projects were stopped or canceled. This begs the question: what will the market look like in 2021?

Two articles indicate that commercial construction is expected to have another down year in 2021.

The first reports that for many commercial construction segments, 2021 will bring further contractions in activity. Declines will be especially pronounced in such sectors as:

  • office buildings
  • hotels
  • amusement and recreation
  • schools
  • retail

None of this should be surprising to readers of this COVID-19 Economic Impact Tracker series. With fewer people working in the office, fewer office buildings will be needed, even as those that exist will likely be repurposed or redesigned to fit our changing work world. The prevalence of Zoom meetings has eliminated the need for business travel, and family vacations have become “staycations” for the near term. Both of these trends have impacted the hotel industry. Indeed, the best growth opportunities are expected in healthcare and warehouse construction, as medical facilities expand to treat the needs of COVID and other patients and firms expand distribution capacity to account for a surge in packages.

A second article reports that construction of skyscrapers – which fell in 2020 – may be subject to a similar decline in 2021. While some are predicting a rebound in tall buildings construction in 2021, others note that the same factors that affected construction in 2020 – reduced need for office space, higher interest in suburban living, concerns about project funding – will not disappear in 2021, and skyscraper construction may face more challenges going forward.

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.


Heightened Demand for Distilled Spirits Spurs Expansion of Barrel Stave Manufacturer

The announcement by a producer of barrel staves that it will expand its manufacturing facility demonstrates yet another way in which the COVID-19 pandemic has affected the US: in how we consume potent potables.

While alcohol sales at bars, restaurants, and other entertainment venues has dropped precipitously as the concept of a “night out” has become a distant memory for many at this time, retail sales of alcohol – such as at grocery, convenience, and liquor stores – has risen as US consumers have taken to imbibing at home. Furthermore, Americans are drinking more distilled spirits – bourbon and whiskey, gin, tequila – as well as the traditional beer and wine. Additionally, many consumers are opting for quality instead of quantity, opting for craft beers, fine wines, and premium distilled spirits.

While the reasons for this increase in consumption in distilled spirits are many – from stress relief to adventuresome home bartenders trying their hand at making classic cocktails – this increase in sales means that distillers will need more barrels to age their products prior to sale. And as federal regulations prohibit the re-use of barrels for Kentucky bourbon and other iconic whiskies, distillers must purchase new barrels every year. Hence, the need for more barrel staves.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including the Freedonia Focus coverage of Distilled Spirits: United States and our sister publisher Packaged Facts’ report on US Beverage Market Outlook 2020: Grocery Shopping & Personal Consumption in the Coronavirus Era. Freedonia Custom Research is also available for questions requiring tailored market intelligence

  Consumer Goods      Covid-19      Food & Beverage    

Future of Food Delivery: Costco Finally Dips Into Curbside Click-and-Collect With Tests in New Mexico

With growing concerns about community spread where infection rates are particularly high coupled with the rise of COVID-19 variants that are more easily spread, more people are asking if even weekly grocery shopping trips are too risky. As a result, even holdouts are putting options back on the table to make customers comfortable and limit in-store traffic.

For instance, Costco – which has long resisted curbside pickup services, suggesting they don’t need it and that their stores aren’t set up for it – is dipping their toes in the water. The company has launched a pilot program offering curbside pickup at three stores in New Mexico. Orders can be placed through Instacart and Costco employees will handle fulfillment. At this point, product pricing is the same as in the store, but order must be at least $100 and customers are charged $10 per order for the convenience.

Most stores have had success with curbside delivery or click-and-collect shopping, even if they have struggled at times with logistics and having enough capacity to meet consumer demand. This market of potential customers is substantial. According to The Freedonia Group’s National Online Consumer Survey (conducted November – December 2020), 35% of respondents noted they had used grocery store curbside pickup for the first time because of the coronavirus pandemic.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Retail Bags, Protective Packaging, Commercial Refrigeration Equipment, and Global E-Commerce Packaging. Related reports from our sister publisher, Packaged Facts, include US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus, Global Food E-Commerce, and Online Grocery in the US. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage      Services