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 Baby Boom…or Baby Bust?

Initially, many thought that stay-at-home orders and boredom would trigger a mini baby boom. For some couples, that has been the case…particularly among those who weren’t overwhelmed by the increased care responsibilities that the pandemic created for many families.

However, overall, there is evidence of a larger-scale baby bust, as

  • couples unable to celebrate how they would like delayed marriages
  • unemployment left families feeling too financially unstable to support a larger family
  • couples were overwhelmed by supervising home school with their kids while they tried to get their own work done
  • feelings of pandemic dread left families feeling less optimistic about the future and less open to expanding their families

This could have lasting effects on the global economy, particularly if it continues. Short term effects obviously include reduced demand for baby products from wipes and diapers to food, clothing, toys, and furniture. Longer term, reduced birth rates – particularly in areas such as the EU and Japan that have struggled to keep their birthrates up enough to sustain population levels – could lead to additional aging of the population, with fewer workers to support those aging out of the workforce.

The Freedonia Group Consensus Economic Indicators show a 0.7% reduction in births in the US between 2019 and 2020, a continuation of the general trend of the past decade. However, the large millennial generation is expected to support a return to growth in the number of births through 2025, even as overall population growth in the US – powered by immigration – continues to outpace gains in the number of births through the same period.  

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research. Freedonia also offers a 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.

  Consumer Goods      Covid-19      Services    

COVID-19 Pandemic Boosts Sales, Popularity of Dungeons & Dragons and Magic: The Gathering

One challenge faced by nearly every household in the US has been that of entertainment: with many activities off-limits due to pandemic-related safety concerns (baseball games, concerts, large-scale family gatherings) or restricted (new movies and television shows), people have had to finds new ways of ending the tedium of staying at home.

A solution to this problem for some has been a surprising one: an increase in the sales of both Dungeons & Dragons rulebooks and accessories and of sets of Magic: The Gathering cards. These games – popular in the 80s and 90s – might seem to be odd choices for a sales resurgence, given the traditional notion of these games being played by small groups of people sitting around a table… the perfect setting for spreading the coronavirus.

However, a number of factors have spurred interest in D&D and Magic: The Gathering:

  • Players quickly discovered that games could be played “together” on Zoom, permitting virtual dungeon crawls from the safety of one’s home (without needing to obtain a periapt of health)
  • The popularity of podcasts and other social media posts featuring gamers, including noted celebrities – showing others that it was possible to play them remotely
  • The publishing of Magic cards with characters and themes from other TV shows and other pop culture phenomenon
  • The announcement by Wizards of the Coast (the publisher of Dungeons & Dragons) that it would offer free materials for download – allowing new players entrance to the world of RPGs

Thus, for many Americans, regular gaming has been a saving throw against boredom, while also offering new entertainments to people who would never have considered the hobby.

For more information, see Freedonia Focus’s Toys & Games: United States report.

  Consumer Goods      Covid-19    

Biden Administration to Investigate Global Supply Chain Issues

On February 24, US President Joe Biden signed an executive order mandating that federal agencies conduct a 100-day review of critically important supply chains, as the COVID-19 pandemic has raised focus on issues regarding access to certain products and materials generally sourced from abroad (and particularly those from China).  The review will focus specifically on four items, some of which have faced supply chain problems even before the pandemic:

  • Semiconductors:  Access to these chips, which are used for multiple purposes in motor vehicles and also are essential components of iPhones, personal computers, smart TVs, gaming systems, and more, increasingly became a problem during the pandemic. As remote working became more commonplace, demand for these chips increased greatly to accommodate the need for more personal computers and laptops. Additionally, trade restrictions placed on imports from China also caused difficulties, as many of China’s leading chip manufacturers had export restrictions placed on them by the United States. Additionally, some of these companies claim plans to expand manufacturing to the United States have been hindered by national security concerns raised by the Committee on Foreign Investment in the United States (CFIUS), due in part to the possible military applications of these products. The US-based Semiconductor Industry Association claims that the US’s share of global semiconductor manufacturing has fallen from 37% in 1990 to 12% today, and US manufacturers are pushing the White House to work with Congress to provide investment that they claim will support research and design operations and to increase domestic semiconductor production.
  • Pharmaceuticals: Shortages in certain drugs during the pandemic has also prompted a deeper examination into the pharmaceutical supply chain. A combination of increased demand for drugs to address the rising number of hospitalizations and the shutdown or slowdown of some international shipping ports led to key shortages. There are also concerns about being too reliant on China for key pharmaceutical ingredients, which has doubled over the last decade
  • Electric vehicle batteries: Global manufacturing of electric vehicle batteries is currently heavily concentrated in China, with Japan and South Korea ranking numbers two and three leading manufacturers, and the US back at number six, according to a report from S&P Global. With major US automobile manufacturers increasingly focusing on electric vehicles – including General Motors, which has announced that it intends to phase out all gas-powered vehicles by 2035 – reliable access to these batteries will be crucial in the coming years. 
  • Critical minerals: Rare earth minerals are used in a wide variety of applications, including airplanes, steel, light bulbs, wind turbines, and many more. Supply chain issues for these minerals long predate the COVID-19 pandemic, as China is the leading global producer of rare earth minerals. This problem of production being so heavily concentrated in a single country has been intensified by some of the Chinese government’s behavior in the past, including a brief restriction of rare earth exports to Japan in 2010 in response to a dispute in the East China Seas. These concerns have led to increased efforts from the rest of the world to ramp up rare earth mineral production, which has lowered China’s share over the last decade from around 98% down to 63%. In a continuation of efforts from the Obama and Trump administrations, Biden’s executive order will examine means of addressing weaknesses in the rare earth minerals supply chain. This will likely include both strengthening the US rare earth mineral industry and transitioning reliance on imports to countries with whom the US has friendlier reliance – primarily meaning a transition away from China.

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.

  Automotive & Transport      Construction & Building Products      Consumer Goods      Covid-19      Energy & Petroleum      Food & Beverage      Industrial Components      Machinery & Equipment      Metals      Packaging      Plastics & Other Polymers      Tariffs      Textiles & Nonwovens    

Challenges Await to Biden Administration’s Made-in-America Push

The Biden administration has expanded on the “Buy American” trend pushed by the Trump Administration by signing the “Made in America” executive order, which, among other things, called for:

  • increasing the cost saving threshold required for federal contracts to purchase from non-US suppliers
  • stricter enforcement of existing Buy American policies, including closing loopholes that allowed companies to offshore manufacturing while continue to qualify for domestic preferences, for example by having 51% of a product’s materials sourced domestically

The goal of these policies is to ensure that taxpayer-funded federal spending is used to invest in domestic manufacturing, create US jobs, and strengthen national security. However, these policies are likely to face challenges – particularly in the short term – such as:

The impact of the Made in Executive order has the potential to become far more substantial should the Biden administration be able to sign into law vast infrastructure and/or energy bills, which would vastly increase the amount of federal spending impacted by the new regulations.

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.

Face Mask News: Updates & Innovations

Face masks remain a key component of ending the pandemic, even as vaccinations increase. Here are a few notes on recent updates from mask suppliers or demand trends:

  • The amount of waste being generated by the large amounts of disposable personal protective equipment continues to be a problem. Nexe Innovations is one company seeking a solution. The company is developing a mask that is fully industrially compostable and expects to have a functional prototype available this year.
  • Backing off an initial plan to do a mass distribution of face masks throughout the country, the Biden administration has settled on a more targeted approach, providing 25 million masks to underserved populations via distributions at more than 1,300 community health centers and 60,000 food pantries and soup kitchens. Under this plan, the administration will send reusable, well-fitted cloth masks in adult and child sizes.
  • The first set of standards for nonmedical single-use and reusable face masks have been released. The new standard from ASTM International is ASTM F3502, and compliant masks will feature a label that they meet those standards. Compliant masks must meet specified design criteria (e.g., nonirritating materials, no vents or valves, snug fit, minimize air flow at perimeter, comfortable for long wear), performance criteria (e.g., ability to filter particles as small as 0.3 microns, durability over time if it is reusable), test methods, labelling, and user information (how to wear it properly and how to clean it if it is reusable).

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Disposable Masks & Respirators,Global Industrial & Institutional Cleaning Chemicals, Global Industrial & Institutional Disinfectants & Sanitizers, Surface Disinfectant Wipes, and Global Disposable Medical Gloves. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Healthcare & Life Sciences