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.

Happy New Year!... Is Your Sustainable Packaging Target Due This Year?

More companies have been announcing and pursuing sustainability goals and targets – many of which are coming due in 2022, if they didn’t already in 2021. Packaging is a big part of many of these initiatives, whether increased recyclability, compostability, lightweighting, right-sizing, plastic-reduction, or increased recycled content.

As a result, demand for more paper and post-consumer recycled content of all types has led to high prices… and some creative measures to get the materials suppliers need.

ND Paper in Old Town, Maine, noted that increased online shopping and plastic packaging converting (from bags to pouches and others) to paper-based options, was rapidly driving up prices for the old corrugated cardboard (OCC) they used to make recycled paper pulp. The company began asking local residents to drop off their e-commerce shipping boxes, pizza boxes, cereal boxes, and more at their mill directly.

Novolex, which makes plastic shopping bags, among other products, operates its own polyethylene film recycling facilities. For several years, the company has operated in-store drop-off collections for these films, as single-stream recycling collectors reject films for clogging sorting machinery. In this way, the company works to gain access to the materials they need to make their own plastic packaging more sustainable. More recently, in 2021, the company adopted and promoted recycling labeling  prompting consumers to return the film packaging to stores for recycling, as a relatively small number of consumers are in that habit.

Access to adequate paper and post-consumer recycled materials supplies remains a concern of many packaging companies and suppliers of various consumer products. Extended producer responsibility (EPR) proposals are still a possibility to improve recycling and collection when strapped municipal waste management departments have limited or eliminated recycling services. While in place in the EU, they have yet to advance on a national level in the US. Still, in 2021 Maine and Oregon enacted EPR initiatives for plastic packaging, and more states are considering similar legislation in 2022.

With all the renewed consumer and investor focus on accountability for sustainability targets and goals, Freedonia analysts continue to watch trends in waste management and packaging input demand/pricing.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly our series of studies in the Packaging and Plastics & Other Polymers catalogs. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Packaging      Plastics & Other Polymers    

Shortage of Vinyl Resins Affecting Construction & Medical Goods Industries

Amidst all the talk of product shortages and supply chain issues, there’s another factor that plays a key role here: that of the availability of the raw materials needed to make finished goods. No matter how the strong the demand for a particular product, firms are helpless to meet surging demand for goods without key raw materials. Outside of lumber and similar products, lack of polyvinyl chloride (PVC) resins is also causing havoc in a number of industries.

As this article indicates, strong demand for PVC had already affected the supply chain in 2020, and the winter storms that cut across Texas early in 2021 caused more difficulties. Plants that make PVC resins – as well as the refineries that make the feedstocks needed to produce to these resins – were forced to shut down due to a lack of electricity. In the meantime, demand for products made from PVC has continued to climb. For instance:

  • High levels of new home construction have boosted demand for PVC windows and doors, pipe, vinyl siding, and other building and construction products.
  • Strong shipments of medical goods (such as PPE) have promoted demand for vinyl films – often  specified because of their sterile properties.
  • Continuing need for ventilators and other related medical equipment has boosted use of PVC tubing.

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 as well as packaging-related topics such as Pouches, Converted Flexible Packaging, Medical Device Packaging, and Global Disposable Medical Supplies. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Necessity Is the Mother of Invention: Shortages Propel a New Idea in Paint

There has been some amount of paint shortage over the past year…not only from the supply end from outbreaks slowing production that we’ve come to expect and even build into assumptions in recent months, but also the kinks from the February winter storm in Texas that slowed production of key supplies. Additionally, the boom in pandemic-era home renovations – and painting has been a popular DIY activity – raised demand at the same time.

What has been one of the big losses? Paint sample cans. Companies would rather be able to supply enough for customers’ projects, but classic paint chips are not enough for many customers and particular interior designers to select the right color.

The solution was the rapid adoption of what had been a niche option: peel-and-stick paint samples. In some locations, quart sample options were either not available or customers were at least being actively directed toward the peel-and-stick option as most major paint suppliers had arrangements with Samplize. While people tend to have a preference for the way they’ve always done things, these peel-and-stick options had benefits too:

  • Ecofriendly: less waste as customers receive a 12”x12” swatch rather than a whole small can
  • Convenient: they are repositionable (so you can test it in more than one place/no wall damage) and easy to use (no paint mess/clean up, already in 2 coats without waiting to dry) 

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, particularly titles such as Global Architectural Paint and Global Paint & Coatings. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Chemicals      Construction & Building Products      Consumer Goods      Covid-19      Packaging      Plastics & Other Polymers    

Shortage of Foams Spurs Search for Alternatives & Efforts to Boost Production

The US continues to face a shortage of polyurethane foams, affecting the manufacture of a wide range of products, including:

  • furniture
  • mattresses
  • insulation
  • insulated metal panels and other building materials
  • automotive seating and other components

This shortage of foams has left manufacturers with a number of unpleasant options – temporarily ceasing or limiting production, paying more for raw materials (and hoping customers will pay more for their products), or looking for suitable alternatives. For instance, one company is offering such products as fiber and fiber-and-coil components that can be used in place of foam in mattresses and upholstered furniture. These components can provide many of the properties of foam, such as softness and light weight, while also being readily available.

However, in the expectation that this shortage of foam will be long-lasting, other firms are looking to expand their own networks of foam production sites, thus ensuring a ready supply of this key raw material. For instance, Tempur Sealy International announced plans to construct an additional form manufacturing center to provide materials for its mattresses and other products. While this site will not be completed until 2023, the plant will provide more long-term stability for Tempure Sealy’s foam needs.

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, including Outdoor Furniture & Grills, and Freedonia Focus Reports such as Household Furniture: United States,Office Furniture: United States,Furniture: United States, and Furniture & Furnishings: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Chemicals      Construction & Building Products      Consumer Goods      Covid-19      Plastics & Other Polymers    

Mergers & Acquisitions Are Booming in 2021: Key Factors Driving Increased Activity

M & A activity has been very busy this spring. Across a wide variety of industries, we’re seeing a range of announcements from market leader combos to roll-ups of smaller, regional operations. But what’s behind this rise in activity?

Here are a few key factors driving acquisition and divestiture activity across the economy in 2021:

  • Owners of smaller firms are looking to retire after their businesses’ survived the COVID-19 pandemic (or in some cases, these businesses struggled and owners did not want to rebuild).
  • Certain industries with high pandemic-era sales (e.g., construction goods suppliers, home improvement distributors/retailers, packaged food companies, grocers, lawn and garden equipment and supplies firms) are flush with cash and high stock values and are looking to expand.
  • Pent-up interest from the limited activity of 2020, as transactions that were planned or considered pre-pandemic were put on hold due to economic uncertainty or the difficulty of completing due diligence when you aren't traveling. Some of these previously planned transactions are now going through.
  • Expectations of higher tax rates are leading some firms to cash out now or to make shifts that put them on better footing.
  • SPACs (special purpose acquisition companies) are being increasingly used for acquisitions to expand existing public or private companies.
  • Companies are reevaluating their business operations in the post-pandemic era and are sometimes making changes to what they see as their core operations, or are building on key capabilities that have grown over the course of the pandemic.

Freedonia Group analysts are keeping watch across a wide variety of industries for changes that portend market movements and shifts in the competitive environment.

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.

  Chemicals      Construction & Building Products      Consumer Goods      Covid-19      Energy & Petroleum      Food & Beverage      Industrial Components      Machinery & Equipment      Packaging      Plastics & Other Polymers      Services      Textiles & Nonwovens