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.

Trex Expands Capacity Amid Burgeoning Home Decking Interest

After a year of uncertainty brought about by the COVID-19 pandemic, Trex – the largest decking supply is the US – is ready to capitalize on rising demand for decks in the coming year. The company’s $200 million investment in increasing production capacity, announced back in November 2019, was completed on January 12. Trex’s investment included the construction of a new manufacturing facility in Virginia and the expansion of an existing plant in Nevada.

While COVID-19 has wreaked havoc on a wide variety of US industries, the lifestyle changes brought about by widespread working at home and consumers spending increased leisure time at home have provided opportunities for major decking suppliers. Many homeowners have undertaken renovation projects in order to make time spent at home more enjoyable. This includes investment in outdoor spaces in light of growing interest in outdoor living, the desire to have a safe place to entertain guests, and the foregoing of traditional vacations. Key elements of these investments included outdoor dining areas, pools, and other projects that often involve the construction, expansion, or improvement of decks.

Another side-effect of the pandemic is that many homeowners have found themselves with an abundance of free time. This has spurred interest in a variety of DIY projects. Trex positioned itself to benefit from quarantine-related decking interest and DIY trends by marketing its decks as simple for homeowners to install themselves, and thus distinguishing its composite decks from those using competing materials or from other manufacturers. The company’s website includes guides and videos that walk homeowners through the entire construction process. And, should the task proved to be too daunting for ambitious amateur deck builders, Trex will also connect homeowners with approved contractors trained specifically with the company’s decking products.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Wood & Competitive Decking, Outdoor Furniture & Grills, Outdoor Kitchens, Fencing, Residential Fencing, and Plastic Fencing. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Senior Freedonia Analyst Discusses Pandemic-Related Upheaval in Silicones Industry

The silicones industry has gotten used to upheaval, and the Covid-19 pandemic is just the latest.  That was the focus of the presentation by Senior Freedonia Group analyst Kent Furst at the International Silicone Conference on November 9. 

Silicones are a unique material (literally “rubber made from glass”) and a tight-knit industry, which has seen healthy growth in all sorts of applications over the last two decades.  But recent years have been a challenge.  In 2018, plant shutdowns in China coupled with strong demand led to price spikes and supply shortages, resulting in companies scrambling to fill orders.  The very next year, however, the supply and demand balance shifted, and prices fell back to earth. 

So when the Covid-19 pandemic hit in 2020, the silicones industry had to be flexible and proactive yet again.  The recession brought on by the pandemic devastated some key markets for silicones, such as motor vehicles and personal care products.  But some companies were able to shift gears to take advantage of new opportunities in personal protective equipment and medical devices such as ventilators, where silicone materials are widely used.

The second half of 2020 brought some relief to the silicones market, thanks to improving economic conditions.  However, this may be in jeopardy as the rapid rise in new Covid-19 cases in the US and Europe is likely to bring economic growth to a halt.  The silicones industry might have even more new challenges to face in the coming months.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Global Silicones and Liquid Silicone Rubber. 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, including one for Global Silicones and one for US Liquid Silicone Rubber. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Chemicals      Covid-19      Plastics & Other Polymers    

This is How Good the Outdoors Business is Right Now: a Kayak Company Has Come Back to Life

After shutting down in late 2019 with lost contracts and financial challenges, KL Outdoors is back. In June, a newly formed business entity called KL Companies acquired substantially all the assets of KLO Holdings LLC and began operating again under the well-recognized KL Outdoors name.

The company reopened two of its facilities – which made plastic kayaks via rotational molding and thermoforming -- and has a third facility operating under a lease. The company reports that it has produced 64,000 kayaks since June and has 32,000 more on order, and that it again has contracts to sell via major outlets such as Walmart and Dick’s Sporting Goods.

Outdoor recreation boomed during the pandemic era as people looked for ways to escape into nature and engage in outdoor activities and socializations that were safer than indoor pursuits. Recreational boating, camping, and hiking are among those key outdoor activities attracting new participants and reviving interest in those who had done them in the past.

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.

  Consumer Goods      Covid-19      Plastics & Other Polymers    

Step2 Expanding: Toys & Outdoor Products Still Seeing “Exceptional” Demand

Step2 – a key supplier of plastic playsets, children’s furniture, outdoor furniture, and storage products among others – has acquired manufacturing, distribution, and shipping assets of a 132,000-square-foot location in Decatur, Georgia. The company noted that everything in the location, from the rotomolding machines, power tools, and quality control systems to support systems in the office and maintenance sector, were needed to meet what it called “exceptional” demand for toys and home products because of the pandemic.

In addition to the 150-175 employees planned for that location, the company has indicated plans to hire an additional 100 employees for its two plants in Streetsboro and Perrysville, Ohio.

Step2 executives noted sales are up for backyard products such as water tables, play houses, wagons and rise-on items, as well as pergolas and outdoor furniture. Step2 CEO Tony Ciepiel commented “many are looking for a variety of active indoor and outdoor play experiences for children while also seeking outdoor comforts to entertain and relax in a place many feel most safe – at home.”

The fact that sales are still up indicates that families are planning to continue outdoor play and recreation into the cooler fall and perhaps also winter months. Garages, gazebos, and other features that provide at least partial shelter from inclement weather will help, as will the rising sales of outdoor heaters and fire pit products and families investing in snow boots, water-proof pants, and insulated gloves, hats, and coats.

As the Scandinavian phrase goes, “There’s no such thing as bad weather, only bad clothing.”

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including Outdoor Furniture & Grills, Sheds & Other Residential Outdoor Storage, Outdoor Kitchens, Home Organization Products, and Tool Storage Products, as well as Freedonia Focus Reports Sports Equipment: United States, Men’s Clothing: United States, and Women’s Clothing: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Plastics & Other Polymers    

Concerns About Coronavirus Transmission Promote Use of Single-Use Plastic Bags

One unintended consequence of the coronavirus outbreak has a been a resurgence in the use of single-use plastic bags. Derided by many due to their perceived negative effects on the environment, many local and state governments across the US – including the key states of California and New York – have banned use of or begun charging fees for single-use bags in recent years, and leading grocery retailers announced plans to stop giving them away at their stores.

However, a growing number of stores are again giving away single-use plastic bags as part of their efforts to reduce the spread of coronavirus. In fact, one state – New Hampshire – has temporarily banned reusable bags, and Maine postponed the implementation of its plastic shopping bag ban. The reason: concerns about the cleanliness of reusable bags. While coronavirus can be removed from plastic surfaces (many plastic shopping bags are made from a high level of recycled plastic content), few shoppers clean their own reusable bags after each use. Thus, to minimize concerns about coronavirus spreading via cross-contamination, retailers are encouraging and again supplying single-use plastic bags.

While the long-term effect of these efforts remain unclear – no one is sure how hygienic practices will change as the virus becomes less of a threat – in the short term, at least, demand for single-use plastic bags is expected to rise.

This presents an opportunity for plastic bag manufacturers to reargue their position that plastic shopping bags – which are readily recyclable (even if the recycling rate remains low) and often made with high post-consumer recycled content – are the more sustainable option compared to polypropylene reusable bags, which are not recyclable. However, now they are adding the hygiene angle. In fact, the Plastics Industry Association has already requested that the US Department of Health and Human Services endorse plastic bags as the safest choice during this pandemic.

To counter that argument and support what had been the increasing consumer habit of carrying reusable bags, the reusable bag industry will need to educate consumers about adequate bag cleaning measures and ensure that the bags are able to withstand frequent cleaning cycles.

For more information, see The Freedonia Group’s Retail Bags report as well as total coverage of the Plastics and Packaging industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Packaging      Plastics & Other Polymers