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.

Trans-Pacific Shipping Is Such a Big Concern That Home Depot Contracted Its Own Ship

Business is booming for many, but the question is…how’s inventory and how are the stocks of key supplies looking? With major ocean shippers struggling to fully meet contract commitments and limited other available space on ocean liners, logistical challenges remain.

Home Depot – a major importer which had resorted to costly air freight to keep tool stocks up during this era of high demand and production challenges – recently announced that it has booked its own ship dedicated to carrying only its goods between China and the US. Companies without the means to take this step for its own charter have started ordering shipments for holiday season stocks earlier than usual – now or earlier, rather than August and September. However, as other companies make that move, it could lead to more delays and congestion in ports.

Even if taking the the unprecedented step of contracting a dedicated ship, retailers still face potential port congestion. It also leaves us wondering…will there be enough trucking capacity to move the goods that make it to port by the holiday season? That has been a challenge this whole pandemic era and continues to cause breaks or delays in logistics supply chains.

Companies will continue to get creative, but customers will still have to order early and be prepared for delays in delivery for at least the near term.

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, as well as Freedonia Focus titles such as Freight by Waterway: United States, Freight Services: United States, Freight by Rail: United States, and Freight by Truck: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Consumer Goods      Covid-19    

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    

Pandemic-Era Home Bakers Go Pro

The pandemic led to baking booms. In fact, according to the November-December 2020 edition of the Packaged Facts National Online Consumer Survey, 25% of respondents who bake noted that they have baked more than usual since the start of the pandemic. Additionally, 6% of home bakers noted that they have taken up sourdough baking – a particularly trendy type on social media – this year.

Many of these home bakers turned it from a hobby into a serious endeavor. Enrollment at culinary schools and the launch of small baking businesses is up as more home bakers consider turning the hobby into a career change. Some were driven by necessity as their previous employment was shut down or limited by public health rules while others were motivated by the now-or-never types of emotion of the pandemic to follow their bliss.

As these new home/pro bakers expand, key opportunities to do so in a manageable way include:

  • upgrading home kitchens and appliances
  • joining a commercial kitchen cooperative
  • leasing “ghost kitchen” space with a foodservice operator
  • going mobile with home delivery and food trucks

Regardless of how they expand, the 59% of us who have been eating more comfort foods because of the pandemic (November-December 2020 edition of the Packaged Facts National Online Consumer Survey) will find more ways to enjoy a variety of fresh baked breads, cakes, and treats.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Packaging area and Global Major Household Appliances, as well as analysis from our sister publisher Packaged Facts, including Home Baking: US Market Trends & Opportunities and Chocolate Candy: US Market Trends & Opportunities. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19      Food & Beverage    

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    

Despite Slight Decline, Retail Sales Outlook for Building Materials Retails Remains Strong

The release of the May retail sales report by the US Department of Commerce on June 15 showed that the US market for building materials and construction products remained strong during the month. Retail sales by building materials and garden equipment and supplies dealers declined slightly from their level in April. Some of the possible causes of this decline can include:

  • high prices for lumber and other building materials (such as copper wire and plastic products), which caused some consumers to delay work until prices became more affordable
  • shortages of key materials due to supply chain issues – disruptions in one phase of a project can delay others, and with high prices, builders and contractors may hold off on product purchases until materials are actually needed
  • shifts in consumer spending – with many states and localities “reopening” and lifting restrictions on dining out and other forms of entertainment, many consumers (especially those who have already invested in their homes) might have opted to spend on other things

However, retail sales by building materials and garden equipment and supplies dealers remained strong. Indeed, compared to this time in 2020, sales in 2021 were more than 20% higher. Most building materials and garden equipment and supplies dealers remain confident in the strength of their industry due to such factors as:

  • continuing high levels of new home construction and homeowner interest in home renovation and repair projects, boosting demand for building materials
  • the advent of summer, which means longer days with better weather that allow for more time for construction projects
  • summer is a traditional buying period for both lawn and garden supplies and equipment, as well as the products (pool supplies, outdoor toys) frequently sold at home improvement and garden centers
  • the end of school means more teenagers will be available to work landscaping jobs – offering time-pressed contractors a way to catch up with their backlogs of work

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. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Construction & Building Products      Consumer Goods      Covid-19