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.

Overall June Retail Trends: Price Increases + Continued Opening = Additional Growth

The most recent retail sales report for June 2021 showed overall growth in retail activity, boosted in part by two key trends – price increases and continued opening of the economy. Ongoing concerns about plateauing vaccination trends and the spread of the Delta variant put some moderating pressure on trends.

Overall, retailers that saw the best gains had stocks and services that were linked to the away-from-home experience or simply benefited from the change of seasons and the warmer summer weather. Specifically, food service establishments and apparel retailers saw the best gains.

Some categories – including auto sales -- slumped amid ongoing supply chain challenges. Additionally, categories associated with home – such as furniture, sporting goods, and building materials retailers – slowed from May levels.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19    

Revised Sales Figures Show Continuing Strength of US Kitchen & Bathroom Remodeling Market

The US home improvement market continues to be a source of strength for the US economy, as consumers remain interested in remodeling and adding on to their homes. A recent update by the National Kitchen & Bath Association demonstrates the strength of this, showing that spending on new kitchens and bathrooms is projected to rise more than 20% in 2021 – a substantial increase from its previously published figures.

In the new residential market, spending will be driven by strong new housing activity, as home builders capitalize on high demand for single-family by erecting new residences as fast as they can – despite high prices for building materials and shortages of lumber and other key products. Many of these newly built homes will feature large kitchens and multiple bathrooms (including master bathroom suites) to entice buyers.

In the much larger residential remodeling segment, many homeowners will seek to purge the memories of the COVID-19 pandemic by completely changing the residences in which they spent so much time over the past year. Kitchen and bathroom remodeling projects will be among the work most often specified by homeowners as they modernize the look of their homes or add features to enhance comfort and convenience – such as more and larger bathrooms with his-and-her sinks, senior-friendly toilets and bathtubs, and touchless fittings, or kitchens with more space for meal preparation and to store the new kitchen appliances that saw intensive use during the past year.

This surge in kitchen and bathroom activity will drive demand for a wide range of products, including:

  • cabinets
  • countertops
  • appliances
  • plumbing fixtures (sinks, toilets, and bathtubs and showers)
  • plumbing fittings (faucets, showerheads, flush valves)
  • pipe, valves, and fittings
  • hard surface flooring (especially decorative tile and luxury vinyl tile, or LVT)
  • paint, drywall, and other interior finishing materials

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly such studies as Home Kitchen & Bathroom Remodeling, as well other studies in the Construction and Building Products and Consumer Goods areas. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Construction & Building Products      Consumer Goods      Covid-19    

An Unexpected Development in Multifamily Housing: Larger Apartments

Something we have frequently chronicled on this blog is the strong demand for new housing across the US. While this has fueled the construction of single-family housing, the fact remains that the shortage of available – and affordable – housing has in turn led to calls for an increase in the construction of multifamily housing units (e.g., apartments and condominiums). Apartments and condominiums do have some advantages over single-family homes, key among them affordability – rent is often less costly than a mortgage payment in many markets – and the generally larger number of living units that can be included in a multifamily housing complex.

Thus, a recent article describing increasing construction of larger apartments shows that the COVID-19 pandemic is affecting this segment of the housing market as much as it is single-family housing. For many renters, larger apartments are a necessity. With hybrid work arrangements increasing becoming common, tenants need designated spaces for home offices – no matter how cozy they may seem. Furthermore, with many people adjusting their lifestyles in the pandemic – and remaining in their apartments more – even modest increases in living space can be seen as an attractive feature to potential tenants.

However, this trend of larger-sized apartments does have some potential downsides:

  • Increases in the size of an apartment means that fewer units will be constructed, at a time when more residences of every type are needed in the US.
  • Similarly, larger-sized will generally command higher rents, potentially pricing out lower-income tenants and those who suffered financial reverses during the COVID-19 pandemic.
  • The mix of building materials needed to construct these larger apartments will also change – more drywall and interior supports will be needed to create these additional rooms, while more flooring, paint, and interior molding will needed to finish these units.

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.

  Construction & Building Products      Consumer Goods      Covid-19    

Trans-Pacific Shipping Is Such a Big Concern That Home Depot Contracted Its Own Ship

Business is booming for many, but the question is…how’s inventory and how are the stocks of key supplies looking? With major ocean shippers struggling to fully meet contract commitments and limited other available space on ocean liners, logistical challenges remain.

Home Depot – a major importer which had resorted to costly air freight to keep tool stocks up during this era of high demand and production challenges – recently announced that it has booked its own ship dedicated to carrying only its goods between China and the US. Companies without the means to take this step for its own charter have started ordering shipments for holiday season stocks earlier than usual – now or earlier, rather than August and September. However, as other companies make that move, it could lead to more delays and congestion in ports.

Even if taking the the unprecedented step of contracting a dedicated ship, retailers still face potential port congestion. It also leaves us wondering…will there be enough trucking capacity to move the goods that make it to port by the holiday season? That has been a challenge this whole pandemic era and continues to cause breaks or delays in logistics supply chains.

Companies will continue to get creative, but customers will still have to order early and be prepared for delays in delivery for at least the near term.

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, as well as Freedonia Focus titles such as Freight by Waterway: United States, Freight Services: United States, Freight by Rail: United States, and Freight by Truck: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Consumer Goods      Covid-19    

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