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.

Appliance Shortages Continue as Demand Spikes Amid Supply Setbacks

In 2020, there has been significant growth in demand for major household appliances in the US, just as supply disruptions have been greatly decreasing the availability of these products in many areas. During the spring, when the coronavirus pandemic began to affect many industries, consumers made a run on freezers in anticipation of needing more long-term food storage while being under quarantine.

Other appliances – including dishwashers, dryers, and refrigerators – have also experienced increasing demand because:

  • people are spending more time at home and using their appliances more, leading to a higher than average rate of breakage and need for replacement
  • home improvement spending is up as consumers are working on home projects in lieu of other activities outside of the home, causing more people to desire new appliances that replace an old but functioning unit

At the same time, manufacturing of appliances has been disrupted by the pandemic:

  • Factories around the world have had to close temporarily or to limit the number of people allowed to work inside.
  • Such major hubs for shipping and manufacturing appliances and parts as Mexico, China, and the US have been particularly affected by the pandemic.
  • Many appliance producers cut back on production voluntarily earlier in the year, incorrectly projecting that demand would be lower this year due to the global recession and decreased consumer spending.

For many consumers, particularly in the US (the second largest national appliance market in the world and the country with the highest number of coronavirus cases and deaths), appliance shortages are expected to continue throughout the year and possibly into 2021. Although suppliers have been ramping up production after seeing demand spikes, the backlog will continue.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly Global Major Household Appliances. 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.


Heightened Concerns About Hygiene Are Propelling Innovation & Adoption of Touchless Technology in Elevators

Touchless technology is about more than a faucet on a sink or a public toilet flush. Heightened concern about hygiene, particularly in public spaces, coupled with the convenience of the technology is bringing touchless innovation into elevators as well. Key innovations include calling and controlling elevators via gesturing, app-enabled, and voice-activated technologies.

The May 2020 edition of The Freedonia Group’s consumer survey found 79% of adults believe the coronavirus is a health threat to them. That demonstrates the importance of people perceiving elevators as safe to their health.

Convincing people to get into elevators is incredibly crucial to getting the economy moving again. A mass exodus of companies and residents leasing space in elevator buildings due to safety concerns would create a real estate crisis in major metropolitan areas.

Building managers, however, want to know that this need will last beyond the current crisis before investing in these upgrades, which can be costly. Although Freedonia analysts note that the heightened interest in hygiene might slide back a little bit as the current crisis subsides, it’s going to stay at a higher level than it was before. Touchless technologies are a convenience, so there is a reason to adopt them that extends beyond the current coronavirus crisis.

For more information, see the following data-rich market analysis reports from The Freedonia Group’s off-the-shelf research catalog, including Global Elevators. 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

  Covid-19      Machinery & Equipment    

Is the Worst of the Pandemic Over for Equipment Manufacturers?

After declining more than 20% between February and April because of the disruptions caused by the COVID-19 pandemic, new orders for US made durable goods grew for the third straight month in July, according to a new Census Bureau report. Orders for durable goods, which are designed to last at least three years, rose 11.2% in July from the previous month, following a 7.7% increase in June.

The double-digit gain posted in July is all the more remarkable considering the record number of new coronavirus cases recorded in the US during the same month.

Time will tell if the increase in durable goods orders will persist as the country continues to reopen its economy and capital spending turns upward. A particular challenge will be operating manufacturing in a pandemic era that requires social distancing among line workers and the specter of additional waves of infections having over the economy.

Growth has been especially strong, albeit from a low base, in the auto industry as sales begin to recover from the worst stretch of the pandemic and plants increase production. New orders for motor vehicles and parts rose 21.9% in July, surpassing pre-pandemic levels. Sales are benefiting from discounts being offered at the dealer level as well as a trend of consumers who had previously used public transportation and ride-share services seeking the protection of riding in their own vehicles.

The worst performing manufacturing industry was nondefense aircraft and parts. Orders were negative in both June and July, reflecting the poor business conditions that continue to haunt the air transportation industry as both business and personal travel activity remains sharply curtailed.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly for machinery and equipment, with reports such as Commercial Refrigeration Equipment, Global Food Processing Equipment, Global Material Handling Equipment, Global Off-Road Equipment Technology 2020, and Global Packaging Machinery. 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.

  Covid-19      Industrial Components      Machinery & Equipment    

It’s Good When Things Aren’t As Bad As You Thought They Would Be

Farm equipment giant Deere reported on August 21 that it expects its net income to be about $2.25 billion in 2020, up from a high-end estimate of $2 billion for the year made in May. Why? Because the sales declines in the company’s Agricultural and Turf segment this year will not be as steep as previously expected.

This will be due to both farmers replacing older equipment and a boom in landscaping-, hobby-, and home improvement-related spending among non-professionals. Sales are also holding up better than anticipated in Deere’s Construction and Forestry division. Recent price increases and “broad employee-separation programs” due to be completed by the end of the year are also expected to have a positive effect on the firm’s bottom line.

Deere’s new earnings estimate for 2020 is 31% below the $3.253 billion in net income it posted in 2019. Still, it represents a positive result in a year when industry sales of agricultural equipment in the US and Canada are expected to be down 5% to 10% and industry sales of construction equipment are expected to decline 20% in North America.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Agricultural Equipment, Global Forestry Equipment (and its companion COVID-19 Impact Report), Global Off-Road Equipment Technology 2020, and Global Power Lawn & Garden Equipment. 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.


Smart Vending Machines: The Touchless Future in On-Demand Foodservice is a Robot

Regional grocery store Heinen’s is an early adopter of Chowbotics’ product Sally, a salad making robot. Initially positioned as a way to make fresh food (e.g., salads, grain bowls, breakfast bowls) available as a grab-and-go option in hospitals, colleges, and other institutional settings. However, the grocery market took on a new urgency as the coronavirus pandemic drove consumers away from self-serve salad bars and as consumers flocked to grocery stores instead of restaurants.  

While many grocery stores switched to offering pre-made salad options, others turned their self-serve bars into a full-service option with staff making customized salads on-demand. However, Sally gives stores a chance to offer a touch-free solution to consumer demand for quick customized salads or similar meals while allowing staff to concentrate on other tasks. The customization is important as many consumers prefer choosing their own toppings – e.g., no croutons or extra croutons, light or heavy dressing, nuts or no nuts, and amounts of pungent items such as onions and peppers.

Chowbotics is also developing a fully touch-free innovation that would allow customers to order via an app and scan a QR code at the machine to have that exact order produced.

For more information on discussion of opportunities, see Packaged Facts’ Food & Beverage industry coverage, including Food Carryout & Delivery and Food Carryout & Delivery: Special COVID-19 Consumer Insights and The Freedonia Group’s analysis of the packaging industry, including to-go containers in Foodservice Single-Use Products and Global Foodservice Single-Use Products. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage      Industrial Components      Machinery & Equipment