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.

Short Term Effects of Coronavirus COVID-19 on the Global Pharmaceutical Industry

The rapid spread of the coronavirus (COVID-19) is projected to continue through the third quarter of 2020 or longer and have a mixed impact on the pharmaceuticals industry. 

During the pandemic, individuals will continue to take prescription and over-the-counter medicines to treat their various health problems and needs. In fact, medication consumption will likely rise, both because of patients taking medications to treat the symptoms of COVID-19 and because the virus imposes pressures on the primary healthcare system and inhibits the access to hospitals and physicians for elective procedures.

However, the supply side faces its own challenges.

  • On March 3, India issued restrictions on the export of 26 active pharmaceutical ingredients (APIs) and the medicines and vitamins made from them, certain antibiotics, the hormone progesterone, and vitamins B12, B1 and B6. This was due to reduced stockpiles of key ingredients sourced from China and the inability to get more. The US and Europe rely on supplies from India.
  • By March 13, suppliers noted that supplies were returning, as import shipments have resumed, with airlifts in the case of high-value ingredients. Still, the restrictions remain in place, with the option to apply for a waiver.
  • China is also a key supplier to the US. US officials are considering ways to increase domestic capacity of such drugs. Others are at least considering ways to diversify supply chains. Still, the need for regulatory oversight makes changes expensive and time consuming.
  • Additionally, US production facilities themselves could be closed or capacity could be temporarily redirected to items crucial to either treating or limiting the spread of COVID-19.

Supply shortages appear to be largely a short-term issue. Though it could encourage production of APIs outside of China, there are a number of issues relating to raw material availability, expertise (or lack thereof), logistics, and government regulation. As a result, changes in supply will have a very slow transition and may not actually shift much in the long run.

For more information, see The Freedonia Group’s Global Pharmaceutical Packaging and US Pharmaceutical Packaging studies, with additional coverage from Freedonia Focus (Pharmaceuticals: United States) and our sister publisher Packaged Facts (Pet Medication in the US). Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Chemicals      Covid-19      Healthcare & Life Sciences    

What Does It Look Like On the Other Side of “Social Distancing” & Closed Businesses

As we’re all facing or currently operating in conditions of remote work, closed restaurants, limits on large gatherings, and curfews, many start to wonder: what does recovery look like?

The Freedonia Group is based in Ohio, where restaurants and bars closed on Sunday night, K-12 schools closed on Monday, colleges are doing remote learning, the primary election was postponed, and waterparks, movie theaters, and gyms closed as well. Other states are following suit, based on recommendations from the Center for Disease Control.

The Freedonia Group also has an office in Beijing. Reaching out to colleagues there, we find that people are returning to work, but in limited numbers so that people are still not gathered in large groups or in close quarters. Health inspectors make period appearances to ensure that people are not sitting too close together and are wearing the mandated masks.

A number of retail outlets are still closed, as there are few customers out in malls and shopping centers. Reservations are sometimes needed for public transportation to restrict the number of people at given stations.

Some goods – particularly marks – are still in short supply and customers need an appointment to get an opportunity to buy them, kind of like trying to buy tickets for a hot concert. Prices of in-demand goods, including personal electronics like tablets and laptops that enable remote education and work, are up and not likely to see any sales for the foreseeable future.

China is several weeks ahead of the US in terms of development of and recovery from COVID-19, so it seems that the return to normal will likely come in stages and not happen overnight.

For more information, Freedonia Custom Research is available for questions requiring tailored market intelligence.

  Covid-19    

Industries That Have Grown & Still Present Opportunities in China & Elsewhere Due to the Coronavirus Crisis

Despite closures elsewhere, opportunities for market expansion exist in technology and hygiene:

  1. Online Shopping: In addition to the major online retailers – Taobao and JD – local supermarkets are also starting to operate their own website or apps. They can deliver within two hours, faster than the major retailers because these are often closer to the shoppers’ homes. 
  2. Online Education: Most children didn’t previously take online courses, but now it is all online for the time being. However, parents are concerned about eye strain and the difficulty of learning, as children might be less focused when they don’t have face-to-face contact with teachers. Even subjects like sports, piano, dancing, and drawing – which aren’t considered typical avenues for online learning – are being taught remotely because there is no other option. In many cases, different apps are required for each course, which could lead to greater adoption on a permanent basis, particularly for electives and tutoring that takes place outside of school hours.
  3. Electronic devices (e.g., tablets, laptops, desktop computers) are needed by remote workers and students alike. Families that previously had only one such device to share now find that they need more or versions with larger screens so that the children can study at the same time the parents work.
  4. Online payment: Consumers are encouraged to avoid using cash for the time being because it might carry the coronavirus. Plus, with contact-free deliveries, payment must be made remotely rather than be given to the delivery person. Even older generations are learning how to use these options. This might be the nail in the coffin for cash among many younger people who were already preferring credit/debit cards and mobile payments.
  5. Hygiene Products: Hand soaps, face masks, wipes, hand sanitizers with at least 60% alcohol may see just a short-term increase, but the virus may also cause consumers to develop new habits, as is what happened in areas that were hard hit by SARS.
  6. Medical products, especially forehead/ear thermometers: With increased vigilance, consumers and various businesses and public agencies are checking workers and visitors on a regular basis. These products are more hygienic and faster for testing a lot of people, and are therefore poised to see fast growth.

For more information, see The Freedonia Group’s Industrial & Institutional Cleaning Chemicals, Global Nonwovens, and Global E-Commerce reports, as well as information from our sister published Simba Information (e.g., Electronic Education Report Newsletter). Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Healthcare & Life Sciences      Textiles & Nonwovens    

Wipes to Clean Your Smartphone & Other Frequently Touched Surfaces

On Monday March 9, Apple issued new guidance for how to clean its devices. The statement notes that 70% isopropyl alcohol wipes or Clorox Disinfecting Wipes can be used on the hard nonporous surfaces (e.g., display, keyboard, and other exterior surfaces). The company cautioned not to submerge the products or allow moisture to get into any openings.

Infection prevention specialists have long noted that smartphones and other such hand-held devices are germ magnets since people carry them with them all the time, pass them among other people, and put them to their faces when making phone calls. As such, wiping down these and other commonly touched surfaces is good practice.

It is reported that wipes and other products that are effective at protecting against colds, flu, and other human coronaviruses are probably helpful against COVID-19 as well. The EPA generated a list of registered antimicrobial products for use against novel coronavirus SAR-CoV-2, the cause of COVID-19. It notes that the registration number, found on the product label, is the more important piece of information to look for when purchasing, since the antimicrobial agent might be used in a variety of products or sold under multiple brand names.

The Freedonia Group National Online Consumer Survey, conducted July-August 2019, found that women were more likely than men to have purchased any type of disposable wipe product at any point in the last 12 months. Women were far more likely to have bought a surface cleaning wipe product, but men had a slight edge on buying antibacterial skin cleaning wipes.  

For more information, see The Freedonia Group’s Wipes, Industrial & Institutional Cleaning Chemicals, Global Disposable Medical Supplies, and US Disposable Medical Supplies reports.

  Consumer Goods      Covid-19      Textiles & Nonwovens    

Is the Crude Oil Situation a “Double Punch”, a Two-Sided Coin, or Both?

March 10, 2020 - On Monday March 9, crude oil fell to its worst day since 1991, with the coronavirus hampering demand at the same time OPEC and Russia went into a supply-side trade war. This is the double-punch that hit the energy industry hard and was a big reason for the S&P 500 having its 19th worst one-day drop by percent change and the worst since 2008.

However, there’s a flip side. Crude oil and gas prices are falling, potentially benefiting industrial users and consumers. Not only is industry using less oil as global demand pressures are reduced by curtailed business travel and manufacturer closures in quarantined areas, but Saudi Arabia is increasing supply.

Lower crude oil prices will help chemical producers outside of the US, at least on the raw material side, since there are a number of companies that produce ethylene and other basic chemicals from crude oil instead of from natural gas. However, that will likely not be enough to offset the drop in demand for more chemical end-use products as the effects of canceled events, flights, vacations, etc., ripple their way through the global economy.

Consumers will likely be happy about the lower gas prices. However, with many limiting or delaying travel plans out of real and/or perceived risk of either contracting COVID-19 or being stuck in a quarantine zone in this volatile time, they are not likely taking advantage of it in the way they ordinarily would. A return to higher levels of consumer confidence will be needed for consumers to absorb this higher level of production.

For more information, please see The Freedonia Group’s coverage of Chemicals, Plastics & Other Polymers, and Consumer Goods. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Chemicals      Covid-19      Energy & Petroleum      Plastics & Other Polymers