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.

Sanitizers, Wipes, & Masks Became Holiday Gift Options…Because 2020

Many families have their “practical gifts” traditions during the holiday season. Maybe they discover new toothbrushes in stockings from Santa, maybe they find new pajamas gift wrapped under the tree, or maybe socks and underwear are traditional Hanukkah gifts one night. This year, for many, hand sanitizer, new masks, and containers of disinfecting wipes made appearances in stockings and gift exchanges.

In the spirit of the traditional song “The Twelve Days of Christmas”, here is a list of what those gifts might be for 2020 as we think back to all the things that suddenly became hard to find, key parts of our household stockpiles, or things that we never thought we needed until this pandemic year.

On the 12th day of Christmas, my true love gave to me….

  • 12 bottles of hand sanitizer
  • 11 packs of cleaning wipes
  • 10 packs of toilet paper
  • 9 reusable masks
  • 8 jigsaw puzzles
  • 7 takeout meals
  • 6 DIY home projects
  • 5 streaming services
  • 4 garden plots
  • 3 comfy chairs
  • 2 internet boosters
  • And a kiddie pool in the backyard!

Happy holidays from the family, including The Freedonia Group, Packaged Facts, Simba Information, and Profound.

  Chemicals      Consumer Goods      Covid-19    

Peloton Deal Shows Continuing Strength of Fitness Market

Peloton – a key supplier of stationary bicycles and other home exercise equipment – announced on Tuesday that it planned to purchase Precor, a leading manufacturer of commercial exercise equipment. In some ways this is a “typical” transaction in that a company is buying a complementary product supplier. However, a closer look shows the role the COVID-19 pandemic has played in bringing these companies together.

Demand for Peloton-branded stationary bikes and treadmills surged during the pandemic as people sought to maintain their physical fitness by exercising more at home, due to their reluctance to go to a gym, or because gyms were closed due to local or state mandates. However, Peloton had trouble meeting this increased demand, as shipping delays meant that its Taiwan-manufactured products took days and weeks to reach customers.

The purchase of Precor will help alleviate these shipping issues, as the company has plants and warehouses in the US, thus allowing Peloton to head off future supply issues by expanding its domestic manufacturing print (a move made by many other firms during the COVID-19 pandemic). The acquisition also positions Peloton for future growth. While many people will continue to exercise more extensively at home, others will return to their gyms with a vengeance – particularly as vaccines reduce the risk of the disease. Peloton will then see sales gains as gyms re-stock their facilities with the exercise equipment supplied by Precor.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including the Freedonia Focus Reports collection which features a wide variety of concise reports including recreation industry titles such as Sports Equipment: United States and Recreation: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19    

PPE Challenges & Opportunities Continue as 2020 Comes to a Close

A few highlights of news and analysis in the personal protective equipment industry:

  • Some “temporary” business adaptations became permanent. Cadillac Products, a film extruder and converter that had been focused on the automotive industry, began making protective gowns in the spring of 2020. Since then, the company decided to make this a part of its permanent business operations, not only helping establish a US production base for these gowns but also diversifying Cadillac Products’ customer base. The company expects to offer a full line of medical gowns, expanding beyond Level 3 types, by February 2021. It won’t be the only company to find the PPE market profitable and remain there.
  • COVID-19 outbreaks in manufacturing plants still hurt deliveries. In November, Top Glove Corporation of Malaysia – a major global supplier of rubber gloves – announced that it would have to close some of its 36 gloves factories for a few weeks after thousands of its workers tested positive for the coronavirus. Although the company noted that it will shift orders to some unaffected factories, delivery of existing orders could be delayed by as long as four weeks, with new orders pushed even further back. Such outbreaks are still common, so buyers of PPE still need to keep their options open and their supply chains diversified, buying in bulk or in advance whenever possible. The need for refilled national and local stockpiles of gloves and other emergency equipment remains.
  • Single-use PPE leads to a lot of w Some creative entrepreneurs are coming up with new ideas to keep discarded PPE items from landfills or from showing up elsewhere as litter. For instance, Binesh Desai – known as the “Recycle Man of India” – has developed a brick product made with discarded nonwoven masks, gowns, and other PPE. Expect other eco-minded innovators to create similar offerings as well.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Disposable Medical Gloves: COVID-19 Impact Analysis, Global Disposable Masks & Respirators: COVID-19 Impact Analysis, Global Spunbond Nonwovens: COVID-19 Impact Analysis, Global Meltblown Nonwovens: COVID-19 Impact Analysis, Global Nonwovens, US Nonwovens, US Medical Nonwovens, and Global Disposable Medical Supplies. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Healthcare & Life Sciences      Packaging    

Plant Expansions Show Continuing Demand for Outdoor Living Products

The COVID-19 pandemic has spurred many US consumers to spend more time outdoors. Not only does this minimize the spread of disease, but being outdoors has granted people the opportunity to have the gatherings of family and friends – birthdays, graduations, and other social events – that would have otherwise missed (even if in a limited and socially distanced capacity). Two recent announcements of plant expansions indicate that Americans will continue to embrace outdoor living for 2021.

One – an announcement by MoistureShield Composite Decking of an expansion of its Springdale, Arkansas, production facility – shows the continuing strength of the decking market. Freedonia experts have previously discussed the growing demand for decks in the US, which have been installed to provide space for social gatherings, outdoor dining, and play areas for children. Decks add living space to a home and simultaneously allow people to more safely gather in small groups.

The second announcement – by plastic furniture manufacturer Poly-Wood – reported that the company will construct a new and larger production center at its Indiana headquarters, boosting its capacity to make Adirondack chairs and other outdoor furnishings. As people add decks to their homes, they will also need chairs, tables, and other items to make them fully functional living spaces. Furthermore, homeowners with front porches and patios – or those who simply want to sit in the front yard – will also buy plastic chairs to provide all-weather seating that will not rot or require frequent care, as well commercial spaces hoping to expand outdoor seating for guests.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly such studies as Fencing, Wood & Competitive Decking,Outdoor Furniture & Grills,Outdoor Kitchens, and WPC & Plastic Lumber. 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    

October Retail Sales Report: Categories Slow as COVID-19 Cases Rise & Economic Relief Remains Elusive

The October advance monthly retail sales report was released on November 17. One thing worth noting – for the uninitiated – is that this information is linked to sales by type of retail outlet, but that doesn’t fully align with sales of product categories in some cases. For instance, sales of sporting and recreation goods might be lower than one would expect because the data only count sales at stores that primarily sell these products and do not include items in this category that are sold at mass merchants like Walmart and Target, whose sales are classified elsewhere.

The October report shows some growth over September sales, but declines in the same period in more categories. The growth that happened was muted and generally below expectations. Sales were hampered by rising COVID-19 cases in much of the country as well as economic uncertainty as hoped-for government stimulus and financial support programs did not come to fruition.

The big winners overall for the year continue to be the same ones from last few months. However, even as they continue to show strength against same-month 2019 sales, they are increasingly off pandemic highs:

  • grocery/food retail stores – October 2020 dipped 0.2% from September 2020, but October 2020 was still up 10.3% from October 2019. This is a trend grocers and other food experts expect to continue as consumers continue to eat and cook at home more than pre-pandemic.
  • building materials/garden equipment dealers – October 2020 was only up 0.9% from September 2020 but still up 19.5% from October 2019. Although experts expect the DIY trend to hold, these elevated sales may falter as the seasons change and weather cools in much of the country; still, October sales were supported by things such as seasonal décor and outdoor heaters, something expected to continue through the rest of 2020.
  • retailers that operate outside of brick-and-mortar locations (including e-commerce not linked to conventional stores) – October 2020 was up 3.1% from September 2020, but October 2020 was still up 29.1% from September 2019. The convenience of e-commerce will make this trend sticky beyond the pandemic.

For the most part, the retailers mentioned above remained open during stay-at-home orders because they were considered “essential” businesses. Additionally, their product mix includes categories that continue to benefit from the shift toward staying home – e.g., home cooking over eating out and DIY home and garden improvements. Many consumers are still largely limiting their shopping to these types of retail outlets.   

Sales at sporting goods, hobby, musical instrument, and book stores – which saw rapid gains in June 2020 – experienced declines from that spike during July and August before improving in September and falling again in October. While back-to-school shopping and fall sports spending supported sales in September, October sales were more likely to be early holiday shopping. October 2020 sales were up 12.4% from October 2019.

A few other highlights:

  • furniture stores – October 2020 saw small dips, falling 0.4% compared to September 2020. This category is still in positive territory year-over-year as October 2020 sales were 5.2% greater than in October 2019. Creature comforts and furniture to support at-home work and learning continues to drive sales.
  • gas stations – October 2020 was up 0.4% from September 2020 but still down 14% from October 2019. People continue to leave home less often, and a reduced level of commuting and road-tripping is keeping sales at gas stations low.
  • clothing stores – October 2020 was down 4.2% from September 2020, which had been an improved month in an overall bad year for clothing sales. October is typically a month that signals fresh buying of cool weather clothes as the seasons change, but sales in 2020 were down 12.6% from October 2019. Bankruptcies are continuing in this market, although some are making it through and reopening after restructuring. Online sales and curbside pickups help sales at these stores.
  • Food services with drinking places dipped again in October, falling 0.9% from September 2020. Cooler weather is moving diners away from outdoor dining options that supported such sales in warmer weather. October 2020 sales are still seriously lagging 2019 same-month sales (-14.2%).

Economists and other interested parties – including Freedonia analysts – will be closely monitoring next month’s retail sales report to see how the holiday shopping season kicks off with Black Friday specials starting early and running through much of the month. There remains some hope on the horizon for the retail sector as sharply curtailed sales on services (limited travel, dining out, away from home entertainment, personal care services) leave most households with more money to spend on goods at retail, particularly as the holiday season approaches. Still, spikes in COVID-19 cases will hurt any retail that is not done via e-commerce as consumers again stay away from public places and as some areas limit or close dine-in options again.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the COVID-19 with a comparison to historical recessions. Food- and beverage-related reports are also available from our sister publisher, Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Construction & Building Products      Consumer Goods      Covid-19      Food & Beverage      Packaging      Textiles & Nonwovens