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.

The COVID-19 Pandemic Is Driving Packaging Machinery Spending in North America

While North America’s economy has been hit hard by the COVID-19 pandemic, the region’s packaging machinery industry has benefited greatly from the resulting shifts in manufacturing activity. As a result, packaging machinery has outperformed most other durable goods industries in 2020. 

Following disruptions that occurred during shutdowns as the beginning of the pandemic, North American companies adjusted their supply chains. A considerable number of them have re-shored manufacturing operations. As many existing factories were upgraded and some new facilities opened, suppliers increased spending on new packaging solutions to accommodate the increase in output.

Consumer trends also encourage investment in new packaging equipment:

  • Increasing demand for hand sanitizer, for instance, pushed distillers to start supplying these products and to acquire the necessary materials and machinery to package them.
  • With demand increasing for numerous pharmaceutical and medical supply products – ranging from medicines and vaccines to rubber gloves and masks – suppliers were also forced to acquire additional packaging equipment.
  • As restaurants, bars, concert venues, and other similar establishments closed, suppliers of beer, wine, and alcohol increasingly packaged their beverages in cans and bottles rather than in kegs.
  • Food and beverage spending shifted to retail channels, requiring more single- and family-sized packaging over bulk foodservice packaging.

Concerns about the spread of COVID-19 also pushed producers to offer new packaging configurations, some to accommodate new hygiene preferences such as single-serving types not meant for sharing, which can often require new equipment.

With the COVID-19 pandemic expected to continue to impact the North American economy in 2021, many of these trends will continue to drive packaging equipment spending in the region and the outlook for the industry is projected to remain strong.

For more information and a discussion of market opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Packaging Machinery, and a comprehensive and authoritative collection of research on the rest of the packaging industry as well as food and beverage research from our sister published Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Machinery & Equipment      Packaging    

Automation Spurred by the COVID-19 Pandemic: Meat Processing & Beyond

Meat processing is an industry that has long considered automation inferior to human activity. Automation was seen as inexact and left too much waste, among other issues.

However, there has been more of a push to improve machinery through the use of technologies – such as artificial intelligence, sensors, and cameras – that are both increasingly better performing and less expensive. The need to implement automation has been spurred by the challenges of worker protection (particularly the need to space workers out amid high infection rates) and the need to continue operating when outbreaks occur.

This is something to watch for in other industries as well. Investments in automation are often seen as a hedge to hiring challenges (when not enough of the right kind of workers available), but it can also be a way to make the cost of production in a country or region with high labor rates more competitive with other areas. As more manufacturers are considering diversifying their supply chains after learning lessons from disruptions during the pandemic, automation may be an increasingly popular strategy.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Food Processing Machinery, Global Packaging Machinery,Meat, Poultry & Seafood Packagingand Global Sensors & Connectors (coming soon) as well as related food industry research from our sister publisher Packaged Facts such as Global Meat & Poultry Trends, and Meat, Poultry, & Seafood Alternatives: Plant-Based & Cultured Cell-Based Types. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Machinery & Equipment    

Shutting Down Facilities: the End of the Road for Some Business Lines or Reallocating Resources?

Over the past several months, companies have been trying to figure out when things are going to stabilize and where they are going next. For some companies in the chemical industry, the time to act has arrived as fading government support and slow economic rebounds around most of the world are forcing hard choices.

In some cases, companies are choosing to completely exit certain lines of business. For example, Dow recently announced that it is closing a number of polyurethane manufacturing facilities, along with rationalizing product capacity in other product lines as well.

Other companies have looked to keep operations going by raising cash or by finding new opportunities where they did not exist before. Sasol, for example, has agreed to sell half of its new petrochemicals complex in Louisiana to LyondellBasell.

Some closures are related to reduced demand in an economy disrupted by a global pandemic. Others are responses to a shortage of internal resources. For instance, some companies are exiting business lines or closing facilities that they might have persisted with in “normal” times. However, when resources are limited, businesses are choosing to ride it out with areas that are either the most profitable right now or that give them the best opportunities for assured long-term growth.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including industrial material topics such as Global Thermoplastic Elastomers, Global Polyolefin Elastomers, Global Medical Thermoplastic Elastomers, and Global Silicones (and the related COVID-19 Economic Impact Report on the topic), Liquid Silicone Rubber (and the related COVID-19 Economic Impact Report on the topic). Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Chemicals      Covid-19      Machinery & Equipment    

Breakrooms in the Pandemic Era & Beyond

From the essential workplaces that remained open throughout the pandemic to offices that are starting to bring back workers, many are realizing that community breakrooms as they used to be no longer fit COVID-related sensitivities and hygiene expectations. Touchless technologies, app-based ordering and payments, and pre-packaged and single-serving beverage and snack options are some of what will equip a breakroom in the pandemic era and beyond.

This has resulted in some unique opportunities for office coffee and snack providers, including:

  • high-end machines that offer touchless technology (from app-based ordering and payments to proximity sensors)
  • provision of specialty coffee beverages to workers who prefer such options but are now hesitant to leave the building as often (via high traffic elevators and lobbies) to make their “Starbucks run”
  • individual, grab-and-go bottles of pre-made coffee, tea, and juice beverages
  • prepackaged meals and snacks, particularly if they either appeal to interests in healthy food that supports immune function or to comfort foods, which have risen in popularity in a high stress era
  • deliveries to remote workers, either as a company-provided benefit or as a personal subscription for convenient access to preferred coffee beverages

For more information and discussion of opportunities, see Packaged Facts’ food- and beverage-related reports, including Office Coffee Service in the US, as well as US Beverage Market Outlook 2020: Grocery Shopping & Personal Consumption in the Coronavirus Era and US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus. The Freedonia Group’s extensive collection of off-the-shelf research provides a strong complement to packaged food industry analysis, including packaging industry titles such as Foodservice Single-Use Products, Global Foodservice Single-Use Products, Pouches, and Global Caps & Closures as well as US Restaurant Reopening: COVID-19 Impact on Supplies.  Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage      Machinery & Equipment      Services    

Ambitious Osram Continental JV Among the Latest Casualties of the COVID-19 Pandemic

What started in 2018 as a strong joint venture between two successful companies in their traditional markets is scheduled to end in 2020.

Osram Continental was formed to take advantage of the rapid transition of motor vehicle lighting to LED-based fixtures by offering semiconductor-based lighting products. The long-term goal of the JV was not just to manufacture efficient LED vehicle lights, but also to connect the lighting to other vehicle systems to make travelling safer for the occupant and for other vehicles on the road.

Despite the rapid transition to LED-based vehicle lights, global motor vehicle production has stalled. According to Freedonia analysts, global motor vehicle production declined slightly in both 2018 and 2019 before sharply contracting in 2020 due to COVID-19 pandemic. This is the same length of time that Osram Continental has been active, and it has not provided the company with a strong market environment in which to launch. Currently, Continental doesn’t expect global vehicle production to return to 2017 levels until 2025 (Freedonia estimates have production returning to 2017 levels in 2023). Either way, the recovery is looking long. Securing contracts with motor vehicle OEMs is critical to Osram Continental’s success, and the recent weak performance and slow expected rebound have dealt a severe blow to the profitability of the venture.

All is not lost, however. The two companies are committed to continuing their development of automotive lighting products through a future cooperative agreement.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including our soon-to-be-released Global Motor Vehicle Outlook update as well as several Freedonia Focus reports (Motor Vehicles: United States, Hybrid & Electric Light Vehicles: United States, and Motor Vehicle Leasing: United States. 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.

  Automotive & Transport      Consumer Goods      Covid-19      Machinery & Equipment