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.

Closed Loop Manufacturing vs. “Downcycling”…How Should We Best Use Recycled Materials?

Closed loop manufacturing is often prioritized and seen as the gold standard in sustainability. This process bring waste back into where it came from so that waste products return to make the product again and ultimately nothing (or almost nothing) is really wasted. However, there are limits to recyclability without losing performance – strength, flexibility, etc.

Perhaps recycled content has more environmental impact if used in a new way. For instance, recycled plastic bottles, bags, and film can also be made into things like pipe, decking, fencing, furniture, and fleece; and recycled glass containers can be used in the cement manufacturing process and to make countertops. This is often called “downcycling” as the materials are used to make something else rather than to make more of what it was. The process had gotten a bit of a bad rap as closing the loop held our fascination…but is that correct?

Is there greater impact on protecting limited resources and reducing greenhouse gas emissions if recycled content (plastic and otherwise) is used to “green up” a long-lived product like construction materials instead of in something that has a limited lifespan and can be made more sustainable in other ways (e.g., packaging)?

This is the argument in policy circles as they consider recycled content mandates or extended producer responsibility (EPR) programs. If there is a finite amount of PCR (post-consumer recycled content) – and there is – what is the best use of it?

The goal of both is ultimately to incentivize bringing more waste into recycling streams so that more materials are available for reuse and kept out of landfills. But sustainability is multilayers…reduce what you can…reuse what can’t be reduced…recycle what can’t be reduced or reused.

In the end, this might be why there is an increasing trend toward EPR. These programs allow for more flexibility in making sure the recycled content use is optimized and companies are still incentivized to reduce material use overall as well.

Freedonia analysts continue to examine ways various industries are maximizing their resources and minimizing their waste, while keeping in mind current limitations on available recycled content and trends in municipal and private waste management along with consumer participation.  

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly our series of studies in the Packaging, Construction, and Consumer Goods catalogs, with analysis covering Recycled Plastics in Packaging, Decking, Plastic Pipe, Fencing, Countertops, Global Cement, and more. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Our Pandemic Habits…and the Smells in Our Homes

Did you get a pet? Did your gym routine move to your family room? Did you start cooking more, including fish? Did your work-at-home habits downgrade your self-care? Does your home smell like it?

More and more people are concerned about this, especially as higher rates of vaccinations and booster doses have many of us more comfortable bringing friends and family back into our homes for visits.

Consumers increasingly sought out air cleaners and ventilation systems to improve our indoor air quality in recent years. Earlier adopters of home air treatment systems were often seeking a way to help with allergies, from dust to pet dander, which often build up in our homes. Others added the systems out of concern about volatile organic chemicals off-gassing from materials (e.g., carpets, paint, glues) used in our homes. More recently, we sought treatments from high-tech (HEPA filters) to low-tech (mechanical ventilation and opening windows) to make our homes and businesses healthier and safer in a COVID era.

But what about the smells? Many air treatment systems include carbon filters to help with odor removal, but they work best if the system is sized for the room it is in. Additionally, anything that allows air exchange – whether fresh from outdoors or from moving through an air cleaning system – will help with odor removal.

Of course, tackling odors at the source are still important…and industries are looking for opportunities there as well. For example, kitty litter that doesn’t have the kitty litter smell, wipes for in between the dog’s bath, sprays and detergent to tackle laundry smells, and candles and sprays from light and natural to perfumed exist or are entering the market to help us out.

But still, don’t forget to go outside…and open that window when you can!

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly our series of studies in Construction and Consumer Goods catalogs, with analysis covering Indoor Air Quality Equipment, Global Residential HVAC, and more. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Commercial Construction Market Adapts to Post-COVID World

The daily commute and weekly (if not more often!) shopping trip has been replaced by the simple act of turning on the computer or reaching for the mobile phone. In consequence, employers, building owners, and municipalities are realizing that the US has an excess of commercial building space. The question now, of course, is to determine how to fill this space:

  • Some office complexes are being repurposed into warehouses (to house the increasing number of packages being shipped across the US) or apartments (to meet the need for residences, especially in urban and suburban areas).
  • Smaller retail spaces (such as restaurants and convenience stores) are being converted into “dark stores,” or mini-warehouses that facilitate the rapid delivery of groceries and other staples in urban centers.
  • Other developers are refurbishing office complexes by adding amenities (such as game rooms, nap rooms, and personal chefs) to entice both employers and employees back to the office.

The stakes are high for all involved:

  • Municipalities are concerned about the loss of tax revenues from employees working from home – not only depriving them of payroll taxes, but also sales taxes from the various purchases employees make when in the city.
  • Building owners must fill properties with tenants to remain profitable.
  • Firms must navigate the challenge of wanting people back in the office while also realizing that many workers feel they are equally, if not more, productive at home.
  • Construction firms concerned with a loss of business must reposition themselves from builders of new structures to specialists in remodeling existing properties.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly our series of studies in the Construction and Building Products catalog. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


High Prices, Lack of Product Availability Affect Sales by Building Materials Retailers

The latest retail sales report by the US Census Bureau showed that retail sales by building materials and garden equipment and supplies retailers declined more than 2% in November. While retail sales for the year were up more than 13% compared to 2020, this fall in sales for the month was a matter of concern for many in the industry. The drop in retail sales could be attributed to a number of factors, key among them being:

  • rising lumber prices and continuing high prices for a wide range of building materials
  • shortages of Christmas trees (which are often purchased at garden supply centers and big box retailers) in some parts of the US
  • a slowdown in DIY activity by homeowners as autumn turned to winter – homeowners are less likely to undertake home improvement projects in inclement weather
  • the end of hurricane season, when lumber and other materials used to fix and repair structures are often purchased in the aftermath of storm landfalls
  • a retrenchment in consumer spending as the holiday season approaches – some consumers reduce discretionary spending in anticipation of an increase in spending in December

Looking forward, building materials and garden equipment and supplies retailers are anticipating an uptick in sales in December. Prices for lumber and other building materials are expected to remain high – as will new home construction, boosting sales of these products. Furthermore, December has traditionally been a time when people bought “big-ticket” items as gifts for themselves or others. Sales of these items – which include appliances, power tools, and lawn mowers – are expected to be good, as many consumers will continue to invest in their homes, such as by replacing older appliances or upgrading lawn and garden equipment to maintain the exterior appearance of their residences.

TFG analysts will continue to monitor retail sales – as well as numerous other indicators – to gauge their effects on the US economy 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 Custom Research is also available for questions requiring tailored market intelligence.


Initiative to Remove Lead Service Pipes a Boon to Construction Industry

Some of the more searing images to hit the collective US conscience over the past few years have been the scenes of people in Flint, Michigan lining up to receive bottled water due to concerns about the safety of their city’s water supply. This process – caused by the realization that their network of lead pipes were decaying and thus contaminating local water supplies – called attention to a nationwide problem: thousands of localities across the US still have lead service pipes that carry potable water into homes and businesses. Efforts to remove these pipes have been stymied by the large numbers of pipe installed, the difficulty of the work (often requiring much excavation), and the cost of replacement pipe.

Recently, though, the US government announced a new initiative to replace all of nation’s lead pipes. This $15 billion initiative will enable the removal of pipe networks to the nearly 10 million residences in the US with lead pipes and their replacement with newer and safer materials. Work on these projects, which is scheduled to begin in 2022, will boost demand for a wide range of building materials, key among them:

  • pipe – depending on local building codes, these pipes can be made from plastics, precast concrete, galvanized steel, and clay
  • fittings, such as flanges, wyes, connectors, and other pipe system components
  • plumbing fittings, such as faucets and tips, that have also come into contact with lead-contaminated water
  • paving materials – in many cases, pipes lie underneath streets, driveways, and porches, requiring the replacement of concrete and asphalt

In addition to these materials, thousands of plumbers, pipefitters, and other trained construction personnel will be needed to complete these tasks. Furthermore, such equipment as excavators, bulldozers, jack hammers, augers, and other specialized products will be required for the work – a not unimportant consideration for suppliers of construction equipment. 

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly our series of studies in the Construction and Building Products catalog. Freedonia Custom Research is also available for questions requiring tailored market intelligence.