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 Need for Change as More Workers Are Called to Return to Offices

The old adage follows that you can’t do what you always did and expect different results. As infection rates ease and pandemic fatigue hits us all big-time, many of us are ready for “normal”. But what is that? A life that looks like 2019 with the same commute, the same office, the same lunch routine, the same happy hours, the same gym, concerts and events at the same venues?

But infectious disease experts say that this won’t be our last global pandemic of an airborne virus. So what then?

Infectious disease experts also agree that there are reasonably accessible ways we can improve public health now and for future cold, flu, or other outbreaks with little or no change in habits by workers and event attendees. These measures include:

  • Ventilation – out with the old air and in with the new air! Even where windows can’t be opened, HVAC systems can be designed to have appropriate rates of fresh air exchange.
  • Filtration – HEPA filters are still the gold standard for air cleaning, but an increasing number of systems also include ultraviolet lights in ducts or at air exchange points to kill viral particles in the air.
  • Hand hygiene – hand washing is never a bad idea.
  • Routine cleaning of frequently user surfaces – while most infectious disease experts believe we have been over-cleaning our buildings given that COVID-19 is airborne, routine disinfecting of high-touch areas such as phones, desks, elevator buttons, bathroom faucets, and community coffee pots contribute to reducing spread of other illnesses.

Plexiglass barriers between certain types of workers – e.g., cashiers, receptionists – and the public may also continue to be helpful as mask wearing eases. Many think of these as the sneeze guards for the modern era.

Freedonia analysts will continue to watch for innovations in building air quality as well as preferences of occupants, builders, and owners to see how our construction elements can contribute to overall worker wellness and productivity.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly Indoor Air Quality Equipment, Global HVAC Equipment, and Nonwovens. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Masks… Still. Masks… Again.

While many never stopped wearing masks and some never wore them consistently and properly, guidance from the CDC this week shifted back to recommending wearing masks indoors, regardless of vaccination status, particularly in areas with high transmission of COVID-19.  

In response, some major retailers such as Walmart are reintroducing mask mandates for their staff and placing signage that strongly encourages customers to wear masks as well. Other companies are considering following suit.  

Additionally, the American Academy of Pediatrics released guidance recommending that all students over 2 years old and all staff – regardless of vaccination status – wear masks while indoors.

The result of all this extended and reintroduced mask wearing means sales of masks have been perking up again as well. The reusable masks many of us have been wearing for months are starting to look it, particularly those worn by children who are prone to fidgeting with or even chewing on them. Faced with continued occasions to wear them and the prospect of wearing them for another season or another year, many are starting to shop for fresh masks again.

First responders and medical personnel still need their stocks as well, but suppliers of N95 medical-grade masks, such as 3M and Honeywell, are seeing decelerations in demand. Still, suppliers are being sure to keep production flexible and ready for future emergencies.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly titles such as Global Disposable Masks & Respirators, Global Meltblown Nonwovens, Global Spunbond Nonwovens, US Nonwovens, and Medical Nonwovens in the Textiles & Nonwovens segment. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


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.

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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.

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Biden Administration to Investigate Global Supply Chain Issues

On February 24, US President Joe Biden signed an executive order mandating that federal agencies conduct a 100-day review of critically important supply chains, as the COVID-19 pandemic has raised focus on issues regarding access to certain products and materials generally sourced from abroad (and particularly those from China).  The review will focus specifically on four items, some of which have faced supply chain problems even before the pandemic:

  • Semiconductors:  Access to these chips, which are used for multiple purposes in motor vehicles and also are essential components of iPhones, personal computers, smart TVs, gaming systems, and more, increasingly became a problem during the pandemic. As remote working became more commonplace, demand for these chips increased greatly to accommodate the need for more personal computers and laptops. Additionally, trade restrictions placed on imports from China also caused difficulties, as many of China’s leading chip manufacturers had export restrictions placed on them by the United States. Additionally, some of these companies claim plans to expand manufacturing to the United States have been hindered by national security concerns raised by the Committee on Foreign Investment in the United States (CFIUS), due in part to the possible military applications of these products. The US-based Semiconductor Industry Association claims that the US’s share of global semiconductor manufacturing has fallen from 37% in 1990 to 12% today, and US manufacturers are pushing the White House to work with Congress to provide investment that they claim will support research and design operations and to increase domestic semiconductor production.
  • Pharmaceuticals: Shortages in certain drugs during the pandemic has also prompted a deeper examination into the pharmaceutical supply chain. A combination of increased demand for drugs to address the rising number of hospitalizations and the shutdown or slowdown of some international shipping ports led to key shortages. There are also concerns about being too reliant on China for key pharmaceutical ingredients, which has doubled over the last decade
  • Electric vehicle batteries: Global manufacturing of electric vehicle batteries is currently heavily concentrated in China, with Japan and South Korea ranking numbers two and three leading manufacturers, and the US back at number six, according to a report from S&P Global. With major US automobile manufacturers increasingly focusing on electric vehicles – including General Motors, which has announced that it intends to phase out all gas-powered vehicles by 2035 – reliable access to these batteries will be crucial in the coming years. 
  • Critical minerals: Rare earth minerals are used in a wide variety of applications, including airplanes, steel, light bulbs, wind turbines, and many more. Supply chain issues for these minerals long predate the COVID-19 pandemic, as China is the leading global producer of rare earth minerals. This problem of production being so heavily concentrated in a single country has been intensified by some of the Chinese government’s behavior in the past, including a brief restriction of rare earth exports to Japan in 2010 in response to a dispute in the East China Seas. These concerns have led to increased efforts from the rest of the world to ramp up rare earth mineral production, which has lowered China’s share over the last decade from around 98% down to 63%. In a continuation of efforts from the Obama and Trump administrations, Biden’s executive order will examine means of addressing weaknesses in the rare earth minerals supply chain. This will likely include both strengthening the US rare earth mineral industry and transitioning reliance on imports to countries with whom the US has friendlier reliance – primarily meaning a transition away from China.

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.

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