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.

Just What Does “Unprecedented” Mean Anymore?

Here we are… a year and a half after COVID-19 first came into the global consciousness with unprecedented lockdowns in China, with other countries to follow soon after that.

I know that I have used the word “unprecedented” more than I ever had previously… and I’ve seen it in a million headlines so I know that everyone else is too. In an era where everything sometimes feels unfamiliar and unprecedented… has the word lost all meaning?

A sizeable share of the Freedonia analytical team has 15+ years of experience forecasting and analyzing prospects for a variety of industries. We’ve watched recessions and recoveries, dot com booms and busts, financial crises, multiple housing and capital investment cycles, terrorist attacks, disruptive innovations, shifting consumer attitudes, regional pandemics, changes in trade dynamics, and more. And now we’re working through a global pandemic that has included supply chain crises, inflation, worker shortages, major changes in living and shopping habits, and very rapid acceleration of pre-pandemic trends.

Comparisons to previous economic periods aren’t what they used to be… “unprecedented.” Still, we collect reported tidbits, look for clues, watch patterns, consider impacts, analyze from multiple perspectives, seek out the knowns in the unknown while we look to make the new connections and relationships tell the story of an industry, of our economy, of our times.

When will “unprecedented” become “normal”? Stay tuned…

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    

Surging Demand Spurs Construction of New OSB Mill

While there’s been a lot of talk about the nationwide shortage of lumber – which has caused prices to rise and led to delays at numerous construction sites across the US – that is not the only construction material that’s in short supply. Construction professionals across the country face supply issues with a number of other construction materials, too, among them oriented strand board, or OSB. OSB is an engineered wood product used in a wide range of construction applications, key among them:

  • roof, floor and wall trusses
  • siding
  • wall sheathing
  • sub- and finish flooring
  • pack

Demand for OSB has been elevated over the past year due to high levels of new housing construction (where OSB is used extensively) and homeowner interest in home remodeling, which has boosted used of the material as homeowners add bathrooms, expand kitchens, and convent old spaces into home gyms and offices.

Thus, the announcement by Huber Engineered Woods – a leading OSB supplier – that it would be erecting a new OSB plant was welcome news to the construction industry. The new site will take advantage of its proximity to the extensive forest stocks in the Upper Midwest to obtain raw materials for OSB that can be used in construction projects across the region and in the US as a whole. While the facility is not expected to begin operations until 2024, demand for new housing and home improvement projects is anticipated to remain strong going forward.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly such studies as Flooring Wood Panels and Oriented Strand Board, as well other studies in the Construction and Building Products and Consumer Goods areas. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Shortage of Vinyl Resins Affecting Construction & Medical Goods Industries

Amidst all the talk of product shortages and supply chain issues, there’s another factor that plays a key role here: that of the availability of the raw materials needed to make finished goods. No matter how the strong the demand for a particular product, firms are helpless to meet surging demand for goods without key raw materials. Outside of lumber and similar products, lack of polyvinyl chloride (PVC) resins is also causing havoc in a number of industries.

As this article indicates, strong demand for PVC had already affected the supply chain in 2020, and the winter storms that cut across Texas early in 2021 caused more difficulties. Plants that make PVC resins – as well as the refineries that make the feedstocks needed to produce to these resins – were forced to shut down due to a lack of electricity. In the meantime, demand for products made from PVC has continued to climb. For instance:

  • High levels of new home construction have boosted demand for PVC windows and doors, pipe, vinyl siding, and other building and construction products.
  • Strong shipments of medical goods (such as PPE) have promoted demand for vinyl films – often  specified because of their sterile properties.
  • Continuing need for ventilators and other related medical equipment has boosted use of PVC tubing.

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 as well as packaging-related topics such as Pouches, Converted Flexible Packaging, Medical Device Packaging, and Global Disposable Medical Supplies. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Acquisition Shows Effect of High Lumber Prices on Pallet Industry

While there have been a number of articles about the effect of the lumber shortages on the housing market, much less has been said about how the national lumber shortage has affected other industries. For instance, a leading end use for lumber in the US is pallets. Indeed, with more than 90% of pallets in the US made from hardwood and softwood lumber, the shortage of lumber has severely affected the pallet industry. Many sawmills have been prioritizing shipments to home builders and big-box retailers – who have more purchasing power – leading many pallet producers and retailers facing critical shortages of pallet cants and other lumber components needed to fix and repair pallets. Not only can firms produce fewer new pallets, but firms’ ability to repair damaged pallets has also been affected by the lumber shortage – companies unable to obtain replacement cants are faced with the difficult choice of cannibalizing one pallet to repair several others.

A recent acquisition announcement shows how one firm in coping with the shortage of lumber. Kamps – one of the nation’s leading pallet repair and management firms – announced that it would purchase Buckeye Diamond Logistics, a firm that also provides pallet repair and management services. The acquisition:

  • expands Kamps’ national pallet stock – a key consideration when firms are looking to lease as many pallets as possible to ensure timely shipment of their goods
  • boosts the company’s network of pallet repair and maintenance facilities
  • increases Kamps’ inventory of trailers used to haul pallets, making it better able to quickly shift pallets to a customer experiencing a temporary shortage
  • adds to Kamps’ purchasing power – some sawmills will only sell to firms willing to buy large quantities of lumber

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


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