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.

Latest Retail Sales Report Shows Challenges & Opportunities for Building Materials Distributors

The release of the December retail sales report showed that sales by building materials and garden equipment and supplies dealers rose modestly in the month. While this was a bright spot compared to retail sales as a whole, many expected that the segment – which had been a pillar of strength throughout the year – would have shown stronger gains.

However, a closer look reveals a number of reasons while sales were not higher:

  • Most of the US was spared severe weather events in December, which depressed sales of rock salt, shovels, snow blowers, and other related products used to combat winter.
  • Many leading retailers began selling Christmas decorations earlier this year (a point mentioned previously in this COVID-19 Economic Impact Tracker series). While this boosted sales in October and November, it served to reduce sales opportunities later in the year.
  • Instead of such items as tools and lawn care products, some consumers – looking to treat themselves after a trying year – opted to buy televisions, gaming systems and games, and personal electronic devices (as evinced by strong growth in sales at electronics and appliance stores).
  • The high level of consumer interest in DIY projects throughout the year meant that items given as Christmas gifts (such as power tools and lawn care products) were purchased earlier in the year.

That said, retail sales at building materials and garden equipment and supplies dealers did rise in December, bolstered by:

  • the mild start to winter, which allowed contractors and other construction professionals to continue work, boosting sales of lumber and related building materials
  • strong sales of appliances as homeowners upgraded refrigerators, ovens, and other kitchen necessities – reflecting continuing interest in domestic meal preparation
  • continuing strong sales of cleaning and disinfecting products, as many retailers in this segment have expanded their offerings of these products

Home improvement activity has remained strong. According to The Freedonia Group’s National Online Consumer Survey (conducted November – December 2020), 39% of respondents said they were currently undertaking home improvement projects because of the coronavirus pandemic (in what is often an off-season for home improvements through the holiday season), while 32% indicated they were delaying home improvement projects because of the pandemic.

Going forward, many believe that the momentum of 2020 will carry over to 2021 and that building materials retailers will continue to post strong sales numbers. Freedonia Group will continue to monitor retail sales in this market segment – and others – to gauge how the economy will fare in the upcoming year.

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      Consumer Goods      Covid-19