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.

Forklift Market in North America Weathers COVID-19 Storm

The Industrial Truck Association noted that although forklift sales in North America were down 5.1% from the strong 2019 figure, the forklift segment of the materials handling equipment market still exceeded expectations in 2020.

The COVID-19 pandemic had a major impact on North America’s manufacturing, trade and distribution, construction, and mining sectors A wide range of companies greatly reduced spending on forklifts and other material handling equipment as economic conditions deteriorated, restrictions on businesses were put in place, and international trade declined during 2020. In the face of changing economic activity, industrial enterprises, warehouses, construction firms, and other operators delayed strategic investments and the opening of new facilities, further reducing North America’s forklift needs.

On the other hand, forklifts are essential for the standard operations of many companies, so the region’s replacement needs moderated losses. In some cases, the pandemic provided opportunities to suppliers of fork lifts and other material handling equipment:

  • The onset of the COVID-19 pandemic boosted demand for a variety of goods sold via e-commerce. To meet that need, Amazon and other companies added warehouse and fulfillment spaces, which required the purchase of new forklifts and related equipment.
  • The vaccination campaign resulted in the construction of new specialty warehouses and the purchase of additional forklifts in order to facilitate the transportation of vaccines at a variety of sites.

The Industrial Truck Association notes that the material handling industry is poised for a strong 2021 having weathered the COVID-19 storm.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly Global Materials Handling Equipment and Global E-Commerce. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Machinery & Equipment    

Pandemic-Era Home Cooking: Consumers Are Searching for Convenience & Ways To Stretch Food Budget; Some Answers Lie in Packaging

As 76% of respondents to The Freedonia Group National Online Consumer Survey (conducted February – March 2021) noted, people are still less likely to be eating in a restaurant because of the coronavirus pandemic. That means that we are still mostly cooking at home. After a year of doing more home cooking than normal, a lot of consumers are looking for short cuts…anything that makes preparing a meal, especially if it is a new food option, easier.

Similarly, the pandemic era also has changed how we think about food waste. For instance, 59% of respondents to the same survey noted that they were more conscious of not wasting food because of the coronavirus pandemic. Factors include:

  • Consumers seeing their budgets tighten and wanting to watch their food spending – 38% of respondents to this recent survey noted that they still have reduced work hours (voluntarily or involuntarily) and 56% of respondents noted that they were still cutting back on spending because of the pandemic.
  • Consumers wanting to minimize trips to the stores – 54% of respondents on this recent survey noted they were still spending less time shopping in brick-and-mortar stores because of the pandemic.

This presents opportunities for packaged food companies and for packaging companies, including:

  • Convenient preparation: 54% of respondents to the November – December edition of the survey indicated that microwave cook-in packaging was a high or medium priority when shopping for food. Microwaveable pouches allow home cooks to quickly add elements such as rice, quinoa, pasta, beans, and tuna to a dish as an ingredient or as a standalone part of a meal.
  • Food protection: 76% of respondents to the November – December edition of the survey indicated that packaging that extends shelf life was a high or medium priority when shopping for food. Such packaging not only allows customers to stretch their food budget by limiting waste, but it also allows food products to travel in e-commerce channels which have become increasingly popular during the pandemic.  

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including the packaging category with titles such as Pouches and Frozen Food Packaging. Related food and beverage industry analysis from our sister publisher, Packaged Facts, include Home Baking: US Market Trends & Opportunities, US Food Market Outlook 2020: Home Cooking, Grocery Shopping & Food Trends in the Age of Coronavirus, Global Food E-Commerce, and Online Grocery in the US. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Covid-19      Food & Beverage      Packaging    

A Legacy of the COVID-19 Pandemic: Vacant Commercial Space

In a recent tracker, we discussed how Google is planning to build more offices and data centers in expectation of its employees returning to work at the office. This was noted as an anomaly, as many companies were planning on reducing their office footprints in expectation that more and more work would be done from home.

A pair of recent articles illustrate how pervasive this notion is, and how it offers a challenge to the construction industry.

The first article noted that many large firms were planning to sublease their unused space or, if possible, not renew their rental arrangements – putting millions of square feet of office space on to the market. While a potential boon to smaller firms or startups looking for inexpensive office space, the prospect of numerous office buildings and commercial parks with floors of empty space is daunting to owners and managers of these properties.

The second article showed that the US restaurant industry is also facing an issue of empty buildings, reporting that more than 10% of all US restaurants have closed permanently. While in some ways this is not as dire as was expected (some reports had 25% of all US restaurants closing), this is still grim news for many parties – restaurant employees, communities that relied on these businesses for tax revenues, and suppliers of food, beverages, and relative supplies.

The construction industry also faces a number of challenges in dealing with this glut of empty commercial real estate. Construction of new office buildings and restaurants will undoubtedly lag going forward, as there will be little need to erect new sites when thousands of inexpensive properties are available for rent or purchase. This will affect demand for a wide range of building materials and related products, such as plumbing fixtures and fittings. Furthermore, while many of these buildings will require some refurbishment when they are repurposed, most will have far less wear and tear than those were permanently. Thus, less of such materials as drywall, paint, and related items will be needed to get buildings back into working shape.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products and Consumer Goods areas. Related Freedonia Focus Reports include Real Estate: United States and Office Furniture: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


COVID-19 Pandemic Continues to Support Demand for Home Furnishings

That US consumers have invested considerable in their homes during the coronavirus is no surprise to regular readers of this blog, as we have regularly pointed out the continuing surge in home remodeling activity. Homeowners – such as those with excess time or money on their hands, or those replacing vacations with “staycations” – have taken to remodeling kitchens and bathrooms, adding home offices and gyms, and installing pools and decks to enhance their residences.

In addition to all of these remodeling projects, US consumers have also been buying furniture – either as part of a more complete home renovation or as a less costly alternative to a more complex project. For instance, among the respondents to the Freedonia Group National Online Consumer Survey (conducted February – March 2021):

  • 60% noted that they were buying products to make staying at home more comfortable because of the coronavirus pandemic
  • 22% noted that they had bought furniture to work from home in the last 12 months
  • 22% had bought home furniture in the last 12 months
  • 20% noted that they had bought outdoor furniture in the last 12 months

And, much as lumber mills and contractors have seen demand for their products and services skyrocket, so too are furniture manufacturers. Indeed, this increase in demand has caused one producer to announce plans to double its workforce – and thus its production capacity – to meet the demand for its products. Consumers saw this reflected in the challenge of getting their furniture purchases delivered in a timely manner.

Not only does this bode well for the company and its employees, but increasing demand for furniture will also support demand for such other products as:

  • hardwood and softwood lumber
  • engineered wood products (e.g., particleboard, plywood)
  • upholstery and fabrics
  • polyurethane foam (for interiors)
  • builders’ hardware (such as casters, handles and pulls, and hinges)

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products and Consumer Goods areas, including Outdoor Furniture & Grills, and Freedonia Focus Reports such as Household Furniture: United States, Office Furniture: United States, Furniture: United States, and Furniture & Furnishings: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19    

Google’s Construction Plans: More Offices As Well As Data Centers

A recent announcement by Google that it would be expanding its physical footprint across the US. That this plan included increasing its number of building office complexes was surprising to many people, as the COVID-19 pandemic – and the general success of the working from home – has caused many companies to entertain the notion of downsizing office spaces. Google’s building push will be welcome by construction professionals in the cities and localities in which these new sites will be located, as thousands will be employed in not only erecting these structures, but also in manufacturing and supplying the materials and components needed for their construction.

However, that this expanded physical footprint would include more data centers was not surprising. The increasing need for more data centers is related, at least in part, to a pandemic shift as more employees are and are expected to continue to work from home more frequently. In addition to health concerns (employers may be leery of having fully staffed offices), many workers have been just as productive at home as if they were in the office and appreciate the flexibility of working from home. Furthermore, increasing interest in e-commerce activity, stock trading online, and online entertainment such as video streaming and gaming has driven gains in Internet usage, which in turn supports demand to data centers to handle surges in Web traffic.

This increasing construction of data centers will support demand for a wide range of building materials, key among them:

  • cement and ready-mix concrete
  • prefabricated building components, such as roof and wall panels and floor and roof trusses
  • roofing and siding materials
  • HVAC systems
  • insulation – especially important to help structures at a constant temperature while using energy efficiently
  • flooring materials, especially those that are static-dissipative to minimize fire risk
  • wiring, generators, and electrical equipment

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products and Consumer Goods areas. Freedonia also offers 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.