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.

Pandemic-Era Home Bakers Go Pro

The pandemic led to baking booms. In fact, according to the November-December 2020 edition of the Packaged Facts National Online Consumer Survey, 25% of respondents who bake noted that they have baked more than usual since the start of the pandemic. Additionally, 6% of home bakers noted that they have taken up sourdough baking – a particularly trendy type on social media – this year.

Many of these home bakers turned it from a hobby into a serious endeavor. Enrollment at culinary schools and the launch of small baking businesses is up as more home bakers consider turning the hobby into a career change. Some were driven by necessity as their previous employment was shut down or limited by public health rules while others were motivated by the now-or-never types of emotion of the pandemic to follow their bliss.

As these new home/pro bakers expand, key opportunities to do so in a manageable way include:

  • upgrading home kitchens and appliances
  • joining a commercial kitchen cooperative
  • leasing “ghost kitchen” space with a foodservice operator
  • going mobile with home delivery and food trucks

Regardless of how they expand, the 59% of us who have been eating more comfort foods because of the pandemic (November-December 2020 edition of the Packaged Facts National Online Consumer Survey) will find more ways to enjoy a variety of fresh baked breads, cakes, and treats.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Packaging area and Global Major Household Appliances, as well as analysis from our sister publisher Packaged Facts, including Home Baking: US Market Trends & Opportunities and Chocolate Candy: US Market Trends & Opportunities. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage    

Necessity Is the Mother of Invention: Shortages Propel a New Idea in Paint

There has been some amount of paint shortage over the past year…not only from the supply end from outbreaks slowing production that we’ve come to expect and even build into assumptions in recent months, but also the kinks from the February winter storm in Texas that slowed production of key supplies. Additionally, the boom in pandemic-era home renovations – and painting has been a popular DIY activity – raised demand at the same time.

What has been one of the big losses? Paint sample cans. Companies would rather be able to supply enough for customers’ projects, but classic paint chips are not enough for many customers and particular interior designers to select the right color.

The solution was the rapid adoption of what had been a niche option: peel-and-stick paint samples. In some locations, quart sample options were either not available or customers were at least being actively directed toward the peel-and-stick option as most major paint suppliers had arrangements with Samplize. While people tend to have a preference for the way they’ve always done things, these peel-and-stick options had benefits too:

  • Ecofriendly: less waste as customers receive a 12”x12” swatch rather than a whole small can
  • Convenient: they are repositionable (so you can test it in more than one place/no wall damage) and easy to use (no paint mess/clean up, already in 2 coats without waiting to dry) 

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, particularly titles such as Global Architectural Paint and Global Paint & Coatings. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Chemicals      Construction & Building Products      Consumer Goods      Covid-19      Packaging      Plastics & Other Polymers    

Despite Slight Decline, Retail Sales Outlook for Building Materials Retails Remains Strong

The release of the May retail sales report by the US Department of Commerce on June 15 showed that the US market for building materials and construction products remained strong during the month. Retail sales by building materials and garden equipment and supplies dealers declined slightly from their level in April. Some of the possible causes of this decline can include:

  • high prices for lumber and other building materials (such as copper wire and plastic products), which caused some consumers to delay work until prices became more affordable
  • shortages of key materials due to supply chain issues – disruptions in one phase of a project can delay others, and with high prices, builders and contractors may hold off on product purchases until materials are actually needed
  • shifts in consumer spending – with many states and localities “reopening” and lifting restrictions on dining out and other forms of entertainment, many consumers (especially those who have already invested in their homes) might have opted to spend on other things

However, retail sales by building materials and garden equipment and supplies dealers remained strong. Indeed, compared to this time in 2020, sales in 2021 were more than 20% higher. Most building materials and garden equipment and supplies dealers remain confident in the strength of their industry due to such factors as:

  • continuing high levels of new home construction and homeowner interest in home renovation and repair projects, boosting demand for building materials
  • the advent of summer, which means longer days with better weather that allow for more time for construction projects
  • summer is a traditional buying period for both lawn and garden supplies and equipment, as well as the products (pool supplies, outdoor toys) frequently sold at home improvement and garden centers
  • the end of school means more teenagers will be available to work landscaping jobs – offering time-pressed contractors a way to catch up with their backlogs of work

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 Custom Research is also available for questions requiring tailored market intelligence.

  Construction & Building Products      Consumer Goods      Covid-19    

Shortage of Foams Spurs Search for Alternatives & Efforts to Boost Production

The US continues to face a shortage of polyurethane foams, affecting the manufacture of a wide range of products, including:

  • furniture
  • mattresses
  • insulation
  • insulated metal panels and other building materials
  • automotive seating and other components

This shortage of foams has left manufacturers with a number of unpleasant options – temporarily ceasing or limiting production, paying more for raw materials (and hoping customers will pay more for their products), or looking for suitable alternatives. For instance, one company is offering such products as fiber and fiber-and-coil components that can be used in place of foam in mattresses and upholstered furniture. These components can provide many of the properties of foam, such as softness and light weight, while also being readily available.

However, in the expectation that this shortage of foam will be long-lasting, other firms are looking to expand their own networks of foam production sites, thus ensuring a ready supply of this key raw material. For instance, Tempur Sealy International announced plans to construct an additional form manufacturing center to provide materials for its mattresses and other products. While this site will not be completed until 2023, the plant will provide more long-term stability for Tempure Sealy’s foam needs.

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, including Outdoor Furniture & Grills, and Freedonia Focus Reports such as Household Furniture: United States,Office Furniture: United States,Furniture: United States, and Furniture & Furnishings: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Chemicals      Construction & Building Products      Consumer Goods      Covid-19      Plastics & Other Polymers    

High Prices & Lack of Materials Continue to Imperil US Housing Market

The US housing market continues to remain a source of strength for the US economy, with demand at record levels. However, the availability of homes on the market – both newly constructed and existing residences – remains low. A lack of affordable homes for purchase affects both the housing market and the US economy as a whole. Not only will fewer people buy new homes, those consumers who spend more on the purchase of a residence will have less money for other things, potentially dampening the economic recovery as the US comes out of the COVID-19 pandemic.

Unfortunately, US consumers should expect to continue to see a tight housing market going forward:

  • According to one article, prices of the materials used to build and finish new homes – such as lumber, paint, drywall, and appliances – continue to rise, affecting the new affordability of new homes once they are completed.
  • Per another article, builders are continuing to experience shortages of key building materials used to build a home. This affects the ability to complete homes in a timely manner, as contractors and other construction professionals report receiving only partial shipments of key building products, dragging out the home construction process.

When can consumers and construction professionals see relief from high housing prices and shortages of building materials?  In the near term, at least, it would appear that these issues will continue to plague home builders and home buyers alike. Freedonia experts will continue to monitor the US housing market to see when conditions become more favorable for the industry.

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 Custom Research is also available for questions requiring tailored market intelligence.