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.

Coronavirus Concerns Causing Starbucks to Temporarily Eliminate Beverage Service in Reusable Cups

In January 2020, Starbucks announced a new set of sustainability goals through 2030, which included further movement from single-use to reusable packaging. This shift includes cups as the company has been both participating in the NextGen Cup Challenge and giving customers $0.10 discounts if they bring their own cup or request to use a reusable ceramic mug in-store.

However, Starbucks, which is headquartered in Seattle where a virus cluster has resulted in 10 reported deaths related to COVID-19 to date, announced on March 4 that it would be suspending the use of reusable cups as part of its efforts to respond to the public health crisis. This move is framed by Starbucks as temporary, and the reusable cups will be back when the outbreak dissipates.

The impact, although temporary, is not insignificant. This is a speedbump on the path toward getting Starbucks customers – and others – to change their habits, something that is needed for greater adoption of reusable cup policies.

Still, foodservice businesses are expected to increasingly consider more sustainable packaging options (e.g., fiber-based, recyclable, compostable, and reusable products) for cups, lids, and carryout containers in the coming years.

For more information see The Freedonia Group’s Foodservice Single-Use Products report.

  Covid-19      Packaging      Plastics & Other Polymers    

Possible Construction Supply Shortages?

Developers are starting to wonder about the impact of COVID-19 on their ability to complete existing projects or to begin new large projects.

US and European contractors rely heavily on Chinese imports for building products ranging from steel to wiring to cabinets. Work stoppages at China’s manufacturing facilities and ports have constrained supplies for building products, leading to delays in the receipt of crucial materials that were not shipped prior to major shutdowns.

Financial fallout for both contractors and customers is expected, although the total impact will vary significantly based on the duration of the outbreak. Although major projects purchase the supplies they need well in advance and therefore may not be effected, others may not be so lucky.

In the meantime, firms are looking for alternate supply channels – both in the US and outside of China – even though they are more expensive. Additionally, contractors may be looking to buy up available supplies in order to have a stock on hand, which would drive prices up even further. Overall, these behaviors drive up prices and shift demand.

As a result, even construction material firms with adequate domestic supplies available to sell might be challenged by unpredictable sales trends that contradict typical seasonal patterns.

For more information, see The Freedonia Group’s extensive collection of reports on the Construction & Building Product industries.


Indoor Air Quality: HVAC Systems & the Coronavirus

March 5, 2020 - The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHARE) has published resources on how building HVAC systems can properly combat airborne infectious diseases, including a dedicated webpage that provides proactive guidelines for building industry professionals concerned about COVID-19. 

Keeping indoor air quality high and having proper air circulation and ventilation are extremely important in reducing a person’s risk of contracting viruses like COVID-19, especially in high-risk areas like healthcare facilities. ASHARE recommends a two-step approach: exhausting air out of the building, and cleaning air within the building with filters and by circulating clean air from outside.

Filtering air, however, is not by itself an effective in reducing the transmission of COVID-19. Many commonly used air filters, such as many types of HEPA filters, are only rated to capture particles 0.3 microns or larger. Coronaviruses, on average, are 0.1 microns in size and may not be captured by an air filtration system. To be effective, any system that incorporates filtration fine enough to capture such small particles will still require additional power to overcome the pressure drop involved in pushing air through smaller pore sizes and to be designed so that air does not leak past the filter.

Furthermore, the virus will continue to live on the surface of the filter for a time, so extra care must be taken by those changing the filters. Which all comes back to the core recommendation: wash your hands often, and do not touch your face!

For further information, see Freedonia’s reports HVAC Equipment, Global HVAC Equipment, Global Filters, and Consumer Air Treatment Systems in the US.

  Covid-19      Machinery & Equipment    

COVID-19 & the US Pet Industry: Initial Reports

Addressing the health of pets and their owners in relation to the novel coronavirus outbreak, the Centers for Disease Control and Prevention (CDC) recommends that those infected with COVID-19 avoid contact with pets and other animals. This position gained force today with news reports that the dog of an infected owner in Hong Kong is “now believed to be the first case of human-to-animal transmission.” 

Nonetheless, and even though COVID-19 “seems to have emerged from an animal source,” the CDC advises that there is no evidence that pets themselves can spread COVID-19 to humans – a point reiterated by the American Veterinary Medical Association (AVMA) in its coronavirus bulletin.

On the pet medications front, according to the FDA’s February 27, 2020, Coronavirus (COVID-19) Supply Chain Update, veterinary pharmaceuticals or pharma ingredients sourced from China “soon could lead to shortages.” 

On the pet food side, there have been reports of in-store signage attributing out-of-stocks to coronavirus-related shipment delays.

For pet products as for many consumer markets, supply chains often link to China. Any disruptions from shutdowns in China are likely to be amplified by pet owners stocking up against shortages. Challenges for the US pet industry may deepen unless suppliers in China return quickly to full capacity operations and supply chains are restored.

See the Packaged Facts website for more information from our sister publishing brand’s extensive coverage of the pet industry.

  Covid-19    

Can More Open International Trade Ease the Impact of COVID-19?

Much of the economic impact of the COVID-19 coronavirus deals with its disruption of international trade. Global supply chains are intricately linked, expertly optimized, and – as a result – often inflexible in the face of disruption. These fragile international linkages, key to the modern economy, are the reason why most economists predict that the coronavirus will have a much larger negative impact than the SARS outbreak in 2003.

In an article, Bloomberg Economics looks at the flipside – how can international trade help ease the economic impacts of the coronavirus? Remedies such as reducing tariffs and increasing international coordination would help grease the wheels of trade and mitigate the downside to the virus. But in today’s atmosphere of divisive, confrontational politics, hoping for greater international cooperation and easing of tensions may be a tall order.

  Covid-19      Tariffs