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.

Google’s Construction Plans: More Offices As Well As Data Centers

A recent announcement by Google that it would be expanding its physical footprint across the US. That this plan included increasing its number of building office complexes was surprising to many people, as the COVID-19 pandemic – and the general success of the working from home – has caused many companies to entertain the notion of downsizing office spaces. Google’s building push will be welcome by construction professionals in the cities and localities in which these new sites will be located, as thousands will be employed in not only erecting these structures, but also in manufacturing and supplying the materials and components needed for their construction.

However, that this expanded physical footprint would include more data centers was not surprising. The increasing need for more data centers is related, at least in part, to a pandemic shift as more employees are and are expected to continue to work from home more frequently. In addition to health concerns (employers may be leery of having fully staffed offices), many workers have been just as productive at home as if they were in the office and appreciate the flexibility of working from home. Furthermore, increasing interest in e-commerce activity, stock trading online, and online entertainment such as video streaming and gaming has driven gains in Internet usage, which in turn supports demand to data centers to handle surges in Web traffic.

This increasing construction of data centers will support demand for a wide range of building materials, key among them:

  • cement and ready-mix concrete
  • prefabricated building components, such as roof and wall panels and floor and roof trusses
  • roofing and siding materials
  • HVAC systems
  • insulation – especially important to help structures at a constant temperature while using energy efficiently
  • flooring materials, especially those that are static-dissipative to minimize fire risk
  • wiring, generators, and electrical equipment

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 Consumer Goods areas. 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.


February Retail Sales Report: Building Materials & Garden Retailers Saw Declines, But Sales Were Still Well Above 2020 Levels; Rebounds Expected for March & April

Even as massive storms hampered consumer spending overall in February, the publication of the February retail sales report by the US Department of Commerce showed generally positive signs for building material and garden equipment and supplies dealers. As with most categories, sales declined in February after a strong showing in January; however, they were still more than 13% higher in 2021 than they were in February 2020 (the last pre-pandemic month of 2020 to compare to).

Retail sales in this segment often retreat in February, and 2021 was no different. This contraction in sales was due a number of factors:

  • Consumers opted to spend less in February to pay down bills incurred by holiday shopping.
  • Winter weather conditions often inhibit building construction and gardening activity, especially in the northern half of the US, but this year also hit Texas and other southern states. Weather not only slowed sales, but derailed many supply chains as well.
  • Many consumers delay making “big ticket” purchases until after they have received their tax refunds – most of which do not arrive in February. In fact, 2021 refunds – even for those who filed early – are running behind as COVID stimulus checks are being processed by the same government departments.

Still, overall sales by dealers of building materials and garden equipment were supported by factors such as:

  • continuing high prices for key building materials, such as lumber, copper wiring, and plastic pipe
  • efforts by contractors and other construction industry participants to “stock up” on key supplies in anticipation of future price hikes due to supply shortages
  • multiple outbreaks of severe winter weather across the US, which boosted sales of products such as snow blowers, shovels, and rock salt

Going forward, retail sales for building material and garden equipment and supplies dealers are expected to rise again in March and April. Not only do these months traditionally indicate the start of the outdoor season in much of the country, tax return checks and additional stimulus checks will likely spur additional spending. Despite the boom in spending on outdoor home improvements in 2020, fresh insights from The Freedonia Group National Online Survey (conducted February to March 2021) indicate that many households still have plans to make improvements to their yards and outdoor spaces in 2021.

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 Consumer Goods areas. 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    

COVID-Era Home Renovations Include Comfort Features: Surge in Kitchen & Bathroom Remodeling Boosts Demand for Radiant Flooring Heating

The COVID-19 pandemic has sparked a surge in home remodeling activity as homebound consumers looked to upgrade their residences to make them more functional by adding (home) office spaces and gyms. However, many homeowners – perhaps feeling the need to treat themselves as they muddle through the discomfort of a pandemic era – also opted to upgrade their homes by adding a feature or two that amplifies their comfort. One such example is including radiant floor heating during the renovation of kitchens, bathrooms, and other rooms. To many, a warm floor is the ultimate in cozy comfort.

This rising demand for radiant floor heating systems will also support demand for a wide range of other building materials, key among them:

  • pipe, particularly PEX pipe valued for its flexibility
  • related plumbing products, such as fittings, valves, pipe supports, and manifolds that help direct water flows in the system
  • upgraded water heating systems, such as tankless systems that also offer enhanced energy efficiency

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Behind the Wall Plumbing, Home Kitchen and Bathroom Remodeling, and Plastic Pipe. Freedonia Custom Research is also available for questions requiring tailored market intelligence


Continuing Demand for Warehouse Space to Spur Construction Activity

According to a recent article, demand for warehouse space remains strong, spurred by:

  • continuing consumer interest in e-commerce, which has caused substantial increases in the number of packages mailed across the US
  • high levels of building construction activity, boosting shipments of bulky building materials, such as lumber, roofing, and siding
  • supply chain difficulties that have led to products spending more time in warehouses before they are sent to their final destination

This need for warehouse and distribution will support the construction of new storage facilities, driving demand for such materials as:

  • prefabricated metal buildings and components, such as insulated wall panels
  • prefabricated metal and wood roof and floor trusses
  • concrete for building foundations, floors, and ramps and loading docks
  • large overhead metal doors
  • insulation (for those structures holding refrigerated and frozen items)
  • wood and metal grating flooring (for multi-story storage facilities)
  • wiring, lighting fixtures, and electrical components

Furthermore, as more warehouses and storage facilities are erected, other products will be needed to outfit these buildings, including:

  • pallets
  • metal racking and supports
  • conveyor belts and other package retrieval system components
  • materials handling equipment, such as forklifts

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.

  Chemicals      Construction & Building Products      Covid-19      Metals      Minerals & Glass      Plastics & Other Polymers    

Rising Demand for Plastic Bags Spurs Increases in Production Capacity

The plastic bag – often derided by environmentalists and subjected to prohibitions on its use – has seen a comeback due to the COVID-19 pandemic. Indeed, demand for plastic bags has risen over the past year, supported by such factors as:

  • increasing shipments of packages bought and sold through e-commerce, as plastic bags are often used to wrap items in packages prior to shipment
  • consumer interest in disposable packaging due to concerns about minimizing the spread of the coronavirus
  • strong growth in the use of single-use medical devices, nearly all of which are packaged in plastic bags for ease of use and sterility

With these factors providing a boost to the industry, it is no surprise that many leading flexible packaging suppliers are looking for ways to expand production. A recent article highlighted the efforts of one leading flexible plastic packaging producer – Pregis – to do so by adding a bag manufacturing plant in Wisconsin and a facility that makes the equipment used to produce bags. Not only did these moves double the space at a manufacturing plant, but this expansion will enable additional increases production capacity in the future.

For more information and a discussion of market opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research related to the packaging industry, including Global Corrugated Boxes,Corrugated & Paperboard Boxes,Protective Packaging,Global E-Commerce Packaging,Stretch & Shrink Film,Global Pallets,Bubble Packaging,Insulated Packaging Containers & Shippers,Protective Mailers, and Global Packaging Machinery. Related analysis from our sister publisher Packaged Facts can be found in these reports: Amazon Strategies and the Amazon Shopper, Consumer & Corporate Food Gifting in the U.S., Food Carryout & Delivery, and Global Food E-Commerce. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Packaging