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.

COVID-19…Forgotten (Almost), But Not Gone

This past week, COVID-19 outbreaks in Chinese industrial regions, Hong Kong, and elsewhere (including positive cases with the First Gentleman and former President Obama) pushed the pandemic back into the news, if not back onto the front pages where it had been for so long.

“Nonessential” business in several Chinese cities and movement between major industrial and financial areas such as Shenzhen, Shanghai, Tianjin, Qindoa, and Hong Kong have been restricted. Warehouses closed, and freight drivers face additional testing. Truck drivers must change at designated checkpoints around Hong Kong. These and other measures combine to challenge a global supply chain that was already seeing stresses from fighting in Ukraine and the corresponding sanctions on Russia.

However, China is seeking to institute more targeted coronavirus response actions to keep the economy from grinding to a halt when infections surface. The result has been that – following a week-long suspension of “nonessential” businesses – many are allowed to resume business if they meet specific criteria, including heightened testing and on-site dorms for workers. Still, those measures require resources and more rural and less economically developed areas are still subject to 2020-style lockdowns.

As responses change and outbreaks continue to come up (with the ongoing risk of new variants), there will continue to be hiccups in output and distribution. Companies will continue to watch for changes, particularly around key export producers, distribution hubs, and sea ports as well as shifting levels of openness in response to outbreaks.

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.

  Covid-19    

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.


What’s in a Name? Potentially Trouble

A rose by any other name would smell as sweet… with apologies to William Shakespeare, consumer products suppliers and branding professionals know differently.

Corona, the well-known Mexican beer brand (sold in the US by Constellation Brands), was initially thought to take a hit in sales in 2020 as its name was so similar to the coronavirus pandemic then raging largely unchecked. False associations with the virus turned out to not be as damaging as initially feared. This ended up being a case more closely related to the idea that there is no such things as bad publicity. The hubbub over the brand’s similarity to the virus ended up having the brand frequently discussed in the news. The company believed that its customers knew the difference between the virus and the beer; they did.

The current negative associations in the US with Russian branded products may be a little harder to refute. Vodka brands such as Stolichnaya and Smirnoff have long enjoyed positive associations as Russian vodka is seen as a premium product in the US. So, despite being made elsewhere, the brands have had little reason to loudly refute that perception.

For instance, the Stolichnaya vodka sold outside of Russia is made in Latvia and owned by Luxembourg-based Stoli Group. The company, which had been stepping back from labeling as “Russian Vodka” (the company had been sourcing ethanol from Russia, but is now shifting to Slovakia, despite the higher cost), is now changing the vodka’s name to Stoli to allow for even more separation.

None of this is new. It has happened before and will happen again. Companies and brands must stay aware of perceptions of their products and remain flexible to adapt.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly Consumer and Packaging industries, as well as Food & Beverage industry analysis and consumer insights from our sister publisher Packaged Facts. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Food & Beverage      Packaging    

Sanctions, War, & Indirect Effects

So you think your business won’t be impacted by the fighting in Ukraine and accompanying sanctions on Russia? Maybe…

But do any of these statements sound familiar?

“I don’t source my wheat from Russia.”

Other companies do and substitutes for Ukrainian and Russian wheat have to come from somewhere.

Global food processors that typically source from Ukraine and Russia might approach US farmers and processors to get what they need. Result: rising prices for wheat worldwide.

“We’ll transition to electric vehicles as a way around Russian oil and rising gas prices.”

That might a good long-term strategy to become less dependent on oil in general, and many companies are making moves in that direction with stated goals to convert their fleet.

But that won’t necessarily help if you’re in Europe, where your electricity might still be generated by Russian natural gas.

It also might not be much near term help if you can’t get access to a hybrid or electric vehicle to replace your conventional gas-powered vehicle. Semiconductor chip shortages and supply challenges in accessing parts of all stripes are still leaving car dealers and medium- and heavy-duty vehicle vendors with reduced inventory and potentially long wait times.

“I source from Eastern Asia & the EU, not Russia.”

Closures of ports and changes in air space regulations and allowances might slow the international flow of goods, even if they don’t actually come from Russia. Russia is a very large country, so any shipping routes (air, land, or sea) that need to go around Russia or its ports could take longer and require more fuel. Result: potentially more time to ship and rising shipping costs in an era already challenged by high shipping costs and long lead times.

Freedonia analysts will continue to watch changes in sanctions and economic losses (crops, industrial and transportation infrastructure, worker productivity) as well as both the direct and indirect effects leading to price changes or opportunities to supply goods and services into new markets.

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.


COVID-19: Back to the Office?

COVID-19 infection, hospitalization, and death updates no longer dominate the news. The wave of infections from the Omicron variant has ebbed.

CDC and state and local governments and health departments are loosening COVID restrictions, including requirements to wear a mask or to verify vaccine status when entering indoor spaces such as restaurants, offices, retail stores, and event spaces.

A growing number of companies are again announcing return dates in March and April, calling workers back at least one or two days per week.

So everyone is headed back to the office, right? Maybe…

But now we’re seeing gas prices rising dramatically, particularly as the Biden Administration today announced an import ban on Russian oil:

  • This could make commuting a lot more expensive, leading workers to push back on the return to offices as gas prices rise and transportation accounts for a larger share of household budgets.
  • There could be a social movement or other type of interest in making sure fuel resources are allocated for emergency vehicles, public mass transit, and for the transportation of needed goods throughout the country and locally.

Still, businesses that rely on workers returning to the offices are investing in innovations and new ways to market to these workers. For instance, Sweetgreen, a company that has traditionally had lunchtime and away-from-home workers as its target customers, is rapidly expanding its Outpost program again. The company is now up to 500 Outpost locations (spots in office buildings, hospitals, and other places where customers can pick up remote orders without going to a restaurant or incurring delivery costs), with 17 more opening this week.

Freedonia analysts will continue to watch corporate return-to-office plans and companies making moves to seize potential opportunities involving office workers, the flex workers, and the remote workers.

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