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.

Face Mask News: Updates & Innovations

Face masks remain a key component of ending the pandemic, even as vaccinations increase. Here are a few notes on recent updates from mask suppliers or demand trends:

  • The amount of waste being generated by the large amounts of disposable personal protective equipment continues to be a problem. Nexe Innovations is one company seeking a solution. The company is developing a mask that is fully industrially compostable and expects to have a functional prototype available this year.
  • Backing off an initial plan to do a mass distribution of face masks throughout the country, the Biden administration has settled on a more targeted approach, providing 25 million masks to underserved populations via distributions at more than 1,300 community health centers and 60,000 food pantries and soup kitchens. Under this plan, the administration will send reusable, well-fitted cloth masks in adult and child sizes.
  • The first set of standards for nonmedical single-use and reusable face masks have been released. The new standard from ASTM International is ASTM F3502, and compliant masks will feature a label that they meet those standards. Compliant masks must meet specified design criteria (e.g., nonirritating materials, no vents or valves, snug fit, minimize air flow at perimeter, comfortable for long wear), performance criteria (e.g., ability to filter particles as small as 0.3 microns, durability over time if it is reusable), test methods, labelling, and user information (how to wear it properly and how to clean it if it is reusable).

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Disposable Masks & Respirators,Global Industrial & Institutional Cleaning Chemicals, Global Industrial & Institutional Disinfectants & Sanitizers, Surface Disinfectant Wipes, and Global Disposable Medical Gloves. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Healthcare & Life Sciences    

Surge in Pandemic-Related Construction Activity Also Boosts Demand for Workers

The COVID-19 pandemic has upended much in the US, but one pleasant surprise has been the resilience of the building construction market. US consumers have put their idle time, vacation funds, and increased ability to work from home ­– which better enables them to schedule and oversee workers in their homes, as well as to accomplish DIY projects in down time during the work – to use, engaging in a wide range of home improvement projects from adding pools and decks to converting unused spaces into home gyms and offices.

A recent article highlights another benefit of the robust construction market: the ongoing need for workers skilled in carpentry, plumbing, installing flooring, erecting drywall, among others. Many consumers remain interested in buying homes, spurring the construction of new residences. Furthermore, home remodeling activity is expected to also post gains going forward, as homeowners – especially those unable to get projects scheduled in 2020 – will look to have these renovations completed in 2021.

Indeed, this shortage of workers – like the shortage of lumber and other building supplies – is one of the factors that may place a brake on construction activity in 2021, even as the COVID-19 pandemic recedes. A lack of qualified workers will make it more difficult for projects to get done and will also add to their cost, which may cause some homeowners to cancel projects and spend on other things. Industry efforts to attract workers, as well as such incentives as the prospect of steady and increasingly lucrative work, will be key to maintaining momentum in the construction market 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.


Pandemic-Driven Snacking Expected to Continue Throughout 2021

February 26, 2021 - Ever since the beginning of the COVID-19 pandemic, many US consumers have heeded the calls of government and health leaders and minimized their trips outside of the home. However, people still need a break from the routine of staying inside. A pair of articles show that, for a number of people, a momentary respite has been that of snacking.

The first article – a recap of PepsiCo company’s latest quarterly earnings report – reported that sales of snacks have increased during the pandemic as consumers increasingly purchase bags and boxes of chips, crackers, and other items to break up the monotony of home life. The company expects this trend to continue through 2021 as people will continue to work, school, and shop at home, with the mid-day trip to the coffee shop replaced by a much shorter journey to the cupboard in the pantry.

The second article discusses the sale of Kraft Heinz’s nuts businesses – such as the famed Planters line of peanuts – to Hormel Foods. The transaction will allow Kraft Heinz to concentrate on its core food offerings, including snack foods as Jell-O, Lunchables, and Bagel Bites. For Hormel Foods, the purchase of the Planters line allows it to enter the snack foods market, which can serve as a complement to its meat products – the basis of many lunches and dinners. Nuts are also considered better-for-you snacks and play into consumer interest in both higher protein snack options and plant-based snack options.

According to The Freedonia Group National Online Consumer Survey (conducted November-December 2020), 51% of respondents noted that they were eating more snacks and treats because of the coronavirus pandemic. That share is somewhat higher – 54% – among those who are set up to do their usual paid work from home. While 45% noted that they were eating more healthy foods because of the pandemic (an interest in boosting immunity and general health), 25% indicated they were eating in a less healthy way and 59% were eating more comfort foods because of the pandemic. Many consumers are straddling that line between foods that improve well-being and foods that are familiar and comforting. These trends present opportunities for food companies to create offerings that play at least somewhat in both areas.

For more information about trends and opportunities, see The Freedonia Group’s coverage of the packaging industry as well as food and beverage research from sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage    

Can-demic: Aluminum Cans Are Still in Short Supply

A trend we first noted last summer on this page (“A Shortage in Cans for Food & Beverages: Why? Will It Last? What Are the Alternatives?” August 26, 2020) is still a problem 6 months later. A number of factors have contributed to a recent and continuing squeeze on the supply of aluminum cans. Those related to the COVID-19 pandemic include:

  • a shift to at-home consumption of beverages –  this trend favors aluminum cans, as they are a format for single servings and beverages in canned forms are easy to stack in pantries when attempting to create a stock to limit shopping trips
  • restaurant uncertainty – restaurants have faced a number of changes to capacity and operations over the past year, and many switched to offering canned beverages because they are easier to save, such as during periods of closure and reduced occupancies

However, the reasons behind this trend are not all due to the COVID-19 pandemic. Other factors impacting shortages are:

  • Performance advantages – cans have better light and gas barrier properties, which makes them an ideal container for beer, seltzers, and other carbonated beverages.
  • A change in aesthetics preferences – beverage suppliers have long preferred glass bottles as a packaging option due to the perception that they are a higher-end option, but that is changing, particularly as consumers look for a format that is easier to take to parks and festivals, where glass is commonly banned
  • Sustainability – cans are mostly made out of old cans, and aluminum has a good reputation for recyclability – although the specifics can be a little more complicated than catchy sustainability slogans often lead one to believe.
  • The explosive growth in the popularity of hard seltzers – nonalcoholic seltzers are really cutting into the market share of traditional colas and fruit-flavored sodas, and these seltzers are almost always packaged in cans. Since those beverages are increasingly being consumed instead of beer or other beverages that often use other packaging formats, that’s putting additional pressure on aluminum supplies.

Solutions?

  • Can suppliers are ramping up production.
  • Some beverage companies are looking outside the US and beyond the typical supply chain for additional can supply options.
  • Some beverage suppliers are wrapping unused cans in the label of products they still need to ship.
  • Beverage suppliers are limiting production of some of the niche brands to have plenty of supply available for their flagship products.
  • Some beverage suppliers are witching to alternative packaging – for beverages that might mean plastic or glass bottles.

For more information about trends and opportunities, see The Freedonia Group’s coverage of the packaging industry as well as food and beverage research from sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage      Metals      Packaging    

Retail Sales of Building Materials Distributors Remain Strong to Start the New Year

Sales of building materials and garden equipment and supplies at retailers continued to exhibit strength in the beginning of 2021, rising at a seasonally adjusted pace of over 13% in January 2021. While sales in this segment were expected to remain robust through 2021, the scope of sales gains for the month was unexpected.

Increases in retail sales by building materials and garden equipment and supplies retailers were supported by such factors:

  • continuing interest in DIY improvement projects by those who remain largely home-bound due to the COVID-19 pandemic
  • positive weather conditions – such as mild temperatures and a lack of precipitation – in many parts of the US, which allowed contractors and crews to remain working on projects
  • the ongoing repair work in those parts of the US that saw severe damage caused by hurricanes and other storms in the late summer and autumn of 2020
  • high prices for lumber and other building materials

Regular readers of this blog are aware of the effect of these factors on not only building materials sales but also the construction market as a whole, as a wide range of projects have been affected by high material costs and shortages of materials needed to complete the construction of new homes or finish kitchen and bathroom renovations.

Freedonia experts will continue to monitor retail sales across multiple market segments to see how the US economy will fare throughout 2021. Major retailers such as Home Depot are considering what 2021 will look like, suggesting that if late-2020 levels continue, then 2021 sales (for comparable stores) could be flat to slightly positive the year from the high 2020 base.

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