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.

RVs: the New Mobile Office & Socially Distant Travel Option

RV industry leader Thor Industries recently reopened manufacturing facilities after shutting down due to shelter-in-place regulations in mid-March to an enthusiastic market. Key factors driving sales gains in this market as dealers reopen include:

  • The idea of “work from home” can be moved to “work from anywhere” as many office jobs can be done in any location with an internet connection and RVs can act as mobile offices.
  • Essential workers can use RVs to avoid cross contamination between work and their homes.
  • RVs allow travelers to do socially distant travel by avoiding high density areas such as airports and hotels and gives them greater control of their environment and possible exposures.
  • Recreation dollars are being reallocated – if consumers cannot go to traditional vacation destinations, children’s camps are canceled, and sporting events are not an option, the 20% down payment no longer seems like an obstacle to ownership.

Although RV owners have traditionally included families and retirees, younger people – including younger couples without children – have increasingly accounted for a greater share of RV owners. These trends are likely to increase the participation by this demographic.

For more information, see The Freedonia Group’s report Recreational Vehicles. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Covid-19    

Potential Long-Term Effect of COVID-19 Pandemic – A Shift Away From Central Cities?

Over the past decade, America’s cities have seen something of a revival, and in part this has been fueled by an increase in the numbers of people who have chosen to live in “downtown” communities. From young professionals to empty nesters, more people are looking to be closer to the entertainment and cultural amenities they desire. This has spurred construction of high-rise apartments and condominiums in central peoples to meet this demand for living space.

However, this may be changing, as many people are increasingly wary of living urban centers, as many more densely populated parts of the US were most affected by the COVID-19 pandemic. Indeed, people moving out of urban cores into nearby neighborhoods or into the suburbs altogether will spur a number of changes to the US residential construction market in the near term. These changes may include:

  • a general uptick in remodeling activity as older structures are rehabilitated and upgraded to make them more welcoming to potential new tenants or owners
  • an overall increase in the size of residences – there is more space to build – that will support demand for such building materials as lumber, roofing, siding, flooring, and drywall
  • interest in adding outdoor amenities to residences, such as decks, outdoor kitchens, and other outdoor features (such as pavers or pergolas)
  • growth in consumer spending – consumers are likely to accumulate more possessions when they move into larger residences, as they have more space to store things

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including an expanding 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.

  Construction & Building Products      Consumer Goods      Covid-19    

The “R” Word — It’s Official

In an announcement that surprised absolutely no one, the National Bureau of Economic Research declared on Monday June 8 that the US dropped into a recession after economic activity hit a monthly peak in February 2020. This expansion lasted 128 months, dating back to June 2009, the beginning of the last recession. It was reported to be the longest expansionary business cycle since such records began in 1854; however, it was also noteworthy for generating unspectacular annual growth rates.

A recession is typically understood as two consecutive quarters of economic contraction. Although the US has not yet officially registered a second consecutive quarter of decline in economic activity, it is a foregone conclusion given the depth, breadth, and speed of the contraction.

Economists expect that we are likely already in recovery – from a very low base – on a monthly basis now that large segments of the economy are reopening. With the economy registering 2.5 million additional jobs in May, this could end up being the shortest and the deepest recession on record. Although even the smallest movement in the positive direction would be enough to officially end a recession, there is still a long way to go before returning to pre-recession levels.

Although the expected speed of the recovery is being actively debated, many believe that further economic good news awaits. Consumers – having been cooped up in their homes for weeks on end – are starting to dine out and shop in stores in person. For instance, a recent survey showed consumers were not only looking forward to going to eat in restaurants but were planning on spending more to broaden their palates. Seasonal shopping for things such as outdoor recreation products and gardening supplies will further contribute to consumer spending activity. Additionally, reopened businesses are expanding output and often seeing sales gains.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions, as well as US and global macroeconomic updates surrounding the pandemic. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19    

Economic & Survey Data Suggest Some Effects of COVID-19 Pandemic Passing

The US received an unexpected bit of good news Friday when it was revealed that the nation’s jobless rate had declined in May as many states loosened – or eliminated altogether – the various shelter-in-place measures enacted in March when the coronavirus began widespread infections. Businesses across the nation have begun to recall furloughed employees or, in some cases (such as grocery stores, janitorial businesses, and home delivery operations), added staff to meet burgeoning demand for their services.

Surging new home sales for May also indicate the pent-up buying power of the consumer. While some of this activity reflects the fact that fewer homes were sold while potential buyers were in quarantine, this sharp increase in new homes sales indicates that many US consumers – perhaps tired of living in less spacious apartments or other such rental properties – were ready to buy their own homes. This is especially good news, as people tend to make other purchases after buying homes, such as:

  • appliances
  • lawn mowers and other gardening equipment
  • furnishings
  • other necessities, such as paint, curtains, and rugs

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including an expanding 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.


What Will Businesses Look Like on the Other Side of the COVID-19 Pandemic?

It’s important to keep in mind that the effects of the COVID-19 pandemic will not just be on the demand side (e.g., what do people want? what can they afford?) of global markets. Additionally, the effect of the pandemic on the supply side of industries will not be limited to supply chains.

Companies are widely rethinking what they should be doing – what services to provide and what products to make – and what they don't need to be doing. These decisions are being made both by choice and by circumstance, but many businesses will emerge from the crisis following different structures and models than the ones they relied on before.

For instance, General Motors’ CEO Mary Barra noted recently that the company is carefully going through each line item of expenses and seeking greater efficiency in process. She noted that GM might permanently reduce the number of vehicle platforms and reduce their complexity, with an eye toward keeping only the versions that customers want most.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including an expanding 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.

  Covid-19