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.

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    

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