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.

Shortage of Truckers Among Causes of Supply Chain Issues Across the US

Recently we posted on this page an article about the rising costs of so many things, from groceries and consumer goods to building materials. While there are a number of factors driving up costs, one that is seldom appreciated by the consumer is the trucker shortage – the people who drive the trucks that carry products across the US. This dearth of drivers is a key reason why store shelves are lacking inventory – in many cases, there is simply no one to take finished products to warehouses and retailers.

Indeed, while this is not a new concern, the COVID-19 pandemic has exacerbated the shortage of long-haul truckers in the US, precisely at a time when more of these professionals are needed to cope with the surge in e-commerce and deliveries of foodstuffs and other items. Key causes of the trucker shortage include:

  • low wages relative to other traditionally “blue-collar” jobs
  • long hours and frequent periods of absence from family and friends, which make it difficult for people to remain in the industry
  • frequent delays in unloading and loading trucks, which can limit the amount of time drivers can actually spend on the road – drivers are generally paid by the mile, so these delays literally cost drivers time and money
  • frustrations about a lack of safety protocols (such as access to masks and PPE) during the COVID-19 pandemic
  • the lack of younger truckers to replace older drivers retiring out of the industry
  • competition from last-mile and short-haul driving jobs that have boomed along with e-commerce and food delivery, but often require less training and definitely require more regular scheduling and/or less time away from home

With no immediate solution to this shortage of long-haul professionals on the horizon, logistics professionals will continue to look for creative solutions while manufacturers, store managers, and – ultimately – the US consumer will continue to experience higher prices and delivery delays.

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      Covid-19      Services    

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    

What Tells You Things Are Heading Back to “Normal”?

Instacart recently released a blog entry talking about something they are calling “the Pudding Pack Index.” The company suggests that increased orders of classic lunchbox items like pudding packs, granola bars, and fruit snacks are solid indicators that the US economy is returning to normalcy – a sign that kids are going to school or camps, that families are going on vacations (particularly road trips), and parents are returning to their workplace.

Our economy is full of such informal modes of evaluation. For instance, a former FEMA director suggested the “Waffle House Index” – or the ability for local Waffle House restaurants to be operating – is a good indication of the severity of storm event.

So what other core indicators might we look at now that could portend a return to normal?

  • Vaccine Rates: That’s an obvious one…vaccinated people are more comfortable resuming their previous habits and can better do so safely, even if the adjustment may not be rapid due to newly formed habits or ongoing concerns about variants or unvaccinated family members
  • Brick & Mortar Store Traffic: Now, many people are likely to retain their online shopping out of convenience and new habits, but returns to in-person shopping indicate normalization
  • Office Occupancy Rates: The return – at least partially – of workers who shifted home during the pandemic would boost traffic at foodservice restaurants and aid the sagging commercial real estate industry
  • Miles Driven: Increases here would indicate more people commuting to work and more people traveling
  • Improvements in Retail Apparel Sales: Once we decide to set aside our pandemic athleisure and start buying fresh outfits for special events, evenings out, and professional looks, we’re planning for a life away from our couches and home offices

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      Food & Beverage      Packaging      Services      Textiles & Nonwovens    

Summer is Coming…Vacci-cation, Anyone?

Through the coronavirus pandemic, many workers with paid time off benefits chose to hoard their time off: waiting for economic or job stability…waiting for events to resume…waiting for resorts to reopen…waiting for international travel to open up or become easier…waiting for enough of a sense of safety to explore and gather.

2020 was a time of backyard staycations. Homeowners installed pools, patios, fire pits, outdoor movie screens, and outdoor kitchens. They nurtured gardens and bought comfy furniture and portable heaters. They made their yards a place to gather safely and entertain the kids as summer camps and sports leagues were restricted or closed.

Now that more people are getting vaccinated and restrictions on traveling and gathering are loosening, what kind of summer can we expect for 2021?

  • PTO will be used. People are feeling more confident and those who have PTO benefits will enjoy at least some of it this year with extended weekend holidays and longer trips.
  • We won’t fully unplug. Remote work will enable some to relocate for longer periods to combine work and play in a vacation setting.
  • Staycations will stay. Those who couldn’t get a pool or other sought-after summer item in 2020 will likely have better luck finding it this year. Additionally, while most children are still not yet able to be vaccinated, many families remain reluctant to travel or reengage in sports leagues or other camps
  • Gardens are back. Some pandemic habits will remain as spring spending at lawn and garden retailers indicate many are planning to keep their gardens going or start new ones in 2021.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Consumer Goods areas, including Outdoor Furniture & Grills; Freedonia Focus Reports such as Amusement Parks: United States and Travel Services: United States; and Packaged Facts reports such as Home Food Gardening: US Market Trends & Opportunities and Food Carryout & Delivery. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Consumer Goods      Covid-19      Services    

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