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.

Pallets: An Opportunity

There’s a lot of talk about the risks of transmitting the coronavirus through personal contact, but there exists another method of transmitting the virus. According to disease experts, coronavirus can remain viable on a surface for up to a day after an infected person makes contact with it. While a number of structures and surfaces are being subject to regular disinfection, the pallets on which the vast majority of consumer goods – including the disinfectant wipes and hand sanitizer being used to treat surfaces – are seldom subject to decontamination, and thus are inadvertently potential sources of infection.

This is a matter of concern, given the key role China plays in the global trade market – everyday, millions of pallets enter and leave Chinese ports and warehouses with goods and materials that are shipped around the world. Given this volume of pallet movement, it is not unlikely that pallets can be a source of potential infection.

Whether a real threat exists – the COVID-19 virus only lasts on smooth surfaces for anywhere from a few hours to several days and ocean shipments from China to the US take a month or more – the perceived fear can be enough to drive people to action. While pallets can be disinfected or sterilized, it is more likely that pallets thought to be contaminated will simply be scrapped and removed from pallet stocks. This will have the potential to boost demand for new pallets, as enough pallets could eventually be removed from trade network that pallet stocks erode. Indeed, if government agencies – such as those in China or the European Union – mandate the removal or disinfection of pallets felt to be contaminated, millions of new pallets will be needed to replenish global stocks.

For more information, see The Freedonia Group’s coverage of the Pallets industry.

  Covid-19      Packaging    

Instacart Expands from Personal Delivery by Launching “Leave at My Door Delivery” Feature for Groceries

Mimicking the contactless delivery practice that has become not only popularized, but also required, in many parts of China, Instacart has sped up the rollout of its “Leave at My Door Delivery” feature. The feature had been in the testing phase, but Instacart decided on March 5 to launch the drop-off service option more broadly in response to widespread consumer interest, which is growing on the back of consumer fears about the coronavirus.

Under this option, customers have their groceries dropped at their door at a designated time rather than waiting for a representative to hand-deliver the items. Drop-off delivery is a way to limit contact with people who might carry the virus as well as a way to limit the spread from people who are self-quarantined and concerned that they have it.

However, even after the virus outbreak subsides, contactless delivery is likely to remain a popular option because it gives customers more flexibility and reduces the likelihood of missing a delivery altogether. If you are ordering perishables on a warm day, you will still want to time your deliveries carefully so your ice cream won’t melt – but you also won’t miss out on your delivery completely if you end up stuck in traffic.

For more information, see The Freedonia Group’s Global E-Commerce report as well as Global Food E-Commerce and Online Grocery Shopping from Packaged Facts, our sister publication.

  Covid-19    

COVID-19 & US Plastic Resins – Salt In The Industry’s Wounds

In a recent Plastics News article, watchers of the chemical market give a relatively optimistic outlook for the effect of COVID-19 on plastic resin markets. Market disruptions are described as likely to be “temporary” and to even provide some growth opportunities, such as PET for water bottles and polyethylene for cleaning chemical containers. Additionally, China appears to be recovering from its virus-induced economic shutdown.

However, the coronavirus could hardly come at a worse time for US plastic resin producers. The industry is going through a shale gas-driven building boom, with billions of pounds of new resin production capacity opening in the past few years and billions more in the works. Yet sluggishness in the US manufacturing sector during 2019 dried up demand for plastic resin, raising the question of where all the new capacity is going to go. Sustainability pressures – including bans on single-use plastic products – are also on the rise.

Resin producers had hoped for a rebound in 2020, but instead are faced with another economic shock from COVID-19. While the jury is still out on how severe the economic effects of the virus will be, even a “minimal” or “temporary” downturn is not what the US plastics industry was looking for.

For more information, see Freedonia Group’s coverage of the plastics industry.

  Chemicals      Covid-19      Plastics & Other Polymers    

Chinese Agricultural Drone Company Is Repurposing its Products to Combat the Spread of COVID-19

XAG, a manufacturer of agricultural robots and drones, has pledged 5 million yuan and has repurposed some of its products to fight the spread of COVID-19 in China. The fund will be used to support the nearly 400 professional operators of XAG drones who have joined the disinfection operation.

Drones provide a number of unique advantages when used for human disinfection, including reducing the risk to operators by limiting the potential for exposure to COVID-19 and disinfecting a wider area more accurately and in less time.

XAG’s drones are particularly well suited for disinfecting rural areas – which present little obstruction – but densely populated urban areas are a challenge for UAVs to operate in effectively. In urban areas, XAG’s R80 robotic utility vehicle proves more effective; it can more easily traverse and disinfect urban terrain than drones, and has successfully demonstrated that it can operate both in and out of buildings.

While still in a limited testing phase, XAG’s demonstrations show that the use of automated vehicles can efficiently provide both air and ground coverage while limiting human exposure to COVID-19.

Creative adaptation of existing equipment and technologies will help businesses thrive as problem solvers in this volatile time.

For more information, see The Freedonia Group’s Global Agricultural Equipment.

  Covid-19      Machinery & Equipment    

Major Conferences – Including SXSW – are Being Canceled; Effects Will Be Widespread for Attendees & Businesses Throughout Host Cities

A growing number of major conferences, conventions, and other events are being canceled as the coronavirus outbreak spreads. A few major tech conferences – such as Google’s I/O developer event – are moving to digital-only formats and canceling the in-person side.

Conference and other event organizers will lose out both on the planned income and – most likely – any money already spent on developing and promoting the event, since most are refunding tickets and admissions. Those who had planned to attend these conferences and conventions will suffer from reduced chances to network, collaborate, make sales, and learn about new products and processes.

Such cancellations have a broader economic impact in host cities, as businesses from hotels and restaurants to local event planners and transportation providers lose revenue opportunities. Cities will also lose out on the bump in tourist activity and the resulting exposure of business people traveling to their city. Organizers of South by Southwest say Austin area businesses took in $335.9 million in business associated with the 2019 edition of the event.

Even when events do take place, attendance will be down given how many major companies are barring or sharply curtailing business travel. Meeting Professionals International, and industry association, is providing additional guidance for planners and suppliers in this changing business environment.

 Freedonia Custom Research is available for questions requiring tailored market intelligence to better understand our changing market conditions.

  Covid-19