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.

High Diesel Prices To Further Strain US Consumers

For all the talk of the supply chain issues that have riled the US economy since the beginning of the COVID-19 pandemic, there is another factor that’s contributing to the high prices that are confronting consumers at nearly every retail outlet: the cost of diesel fuel is at a record high.

This surge in pricing – caused by high crude oil prices and decreasing domestic production of diesel fuel – is set to cause further angst across many segments of the economy:

  • Truckers of every stripe – from those driving tractor trailers across America’s highways to the smaller trucks filling grocery shelves – will have to pay more for fuel, and will in turn charge more for their services.
  • Diesel fuel also powers the locomotives that carry cargo on the rails and the container ships that sail the high seas – and again, railroad companies and shippers will pass these costs on to consumers.
  • The construction industry relies on diesel fuel in myriad ways – from the generators that power equipment during a home remodel to the bulldozers, loaders, and other vehicles used in infrastructure projects. Construction professionals will have to figure these increased costs into the bids they submit.

Sadly, there does not appear to be serious price relief on the horizon. Winter is expected to continue for at least another month in the US, and any serious storm can affect refinery outputs, thus making it difficult for US producers to increase domestic supplies. Even more seriously, global uncertainties – of war in the Ukraine, for instance – have pushed petroleum prices to nearly $100 a barrel, and efforts to increase production (and lower prices) have remained modest.

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


Is Your Carryout or Delivery Habit Filling Your Junk Drawer? Some People Suggest to #skipthestuff

Many Americans already had a habit of ordering carryout or delivery meals from their favorite restaurants. In the COVID-19 pandemic era, more people ordered carryout as a replacement for their former visits to dine-in restaurants. As of the October-November 2021 edition of the Freedonia Group National Online Consumer Survey, 35% of respondents reported that they had increased their pattern of ordering carryout from a restaurant because of the pandemic and had not returned to pre-pandemic levels. Approximately one-quarter said they were increasingly ordering restaurant meals for home delivery either from a 3rd party app or from the restaurant directly because of the pandemic and had not returned to pre-pandemic habits.

The result of that increased carryout, delivery, and drive-thru ordering was more napkins, straws, plastic utensils, chop sticks, and condiments filling up our junk drawers. With more people ordering carryout or delivery to eat at home rather than on-the-go or at their office, more of us are eating carryout with our own utensils and often on our own plates. While many of us were already used to getting more napkins than we needed with each order, now the utensils, straws, and condiments also stacked up.

One movement looks to deal with that accumulation of carryout paraphernalia… #skipthestuff. This social media movement and the local ordinances that go along with it encourage people to ask restaurants to leave the utensils, napkins, straws, and condiments out of their bags, or to at least ask for only what they need. They also encourage restaurants to see this as an opt-in situation; to ask customers if they want them before automatically tossing them in the bag.

Since most of these items are destined for landfills, more consumers see this as an easy way to use less disposable paper and plastic. Many restaurants – some of which had already limited the inclusion of these items as a cost reduction measure – increasingly make “no utensils”, “no napkins”, and “no condiments” an option on their internet ordering platforms.

Freedonia analysts remain on top of changing consumer habits, supply levels, local regulations, sustainability pushes, cost reduction needs, and other reasons for shifting trends in this area.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly our collection of packaging reports, including Foodservice Single-Use Products and Global Foodservice Single-Use Products. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Packaging    

Strong Growth in Kitchen Cabinets Demand in 2021: Will It Continue?

A recent press release from the Kitchen Cabinets Manufacturers Association (KCMA) reported strong gains in cabinet sales in 2021, with a gain of 14.6% from 2020. This is not surprising, given:

  • high levels of housing starts, particularly of single-family units with the largest kitchens (and thus have more cabinets)
  • strong homeowner interest in home improvement projects, such as kitchen remodeling – when homeowners often replace older cabinets with newer ones

These bursts of activity are demonstrated by the growth seen in the various kitchen cabinet types. Stock kitchen cabinets sales rose over 16% in 2021, bolstered by the increase in housing starts – home builders are more likely to buy these basic cabinets to more quickly install them, thus making a residence more ready sale.

Custom cabinets – those individually designed and crafted for installation in a home – saw the most rapid advances in 2021, growing 19.5% in that year. These advances were driven by the large number of homeowners who invested in kitchen remodeling projects during the COVID-19 pandemic. Consumers who had significant savings because of the pandemic – due to stimulus outlays and a lack of entertainment options – often put these funds in their homes. One way in which to do so was to upgrade their kitchens, installing custom cabinets with such features as pet beds, spice racks, and pull-out shelves.

Will these elevated kitchen cabinet sales continue in 2022?  Early indicators say “yes”. Home builders are continuing to erect houses as fast as they can as demand remains unquenched. Similarly, many remodelers expected continuing strong demand for their services – including kitchen renovations – as homeowners continue to invest in their residences. As of the December 2021 edition of The Freedonia Group National Online Consumer Survey, 30% of respondents reported that they were still doing more DIY home improvement and 13% were still hiring contractors for additional home improvement projects at an elevated rate than prior to the pandemic.  

For more information and discussion of opportunities, see The Freedonia Group’s study of the US cabinets industry, Cabinets, as well as the Freedonia Group’s extensive collection of off-the-shelf research, particularly our series of studies in the Construction and Building Products catalog. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Strong Year for Asphaltic Roofing Industry Indicative of US Construction Market

The recent production report of the Asphalt Roofing Manufacturers Association showed that US firms – after a solid year in 2020 – posted even stronger sales in 2021. Domestic production of asphalt shingles (the most commonly installed roofing material in the US) rose nearly 5% in 2021, while US manufacturing of modified bitumen membranes (MBMs) – one of the leading low-slope roofing materials installed in the US – advanced at a double-digit pace in 2021.

For asphalt shingles, this increase in production was spurred by high levels of housing starts as builders capitalized on demand for housing by erecting as many houses as they could (which, given shortages of lumber and other materials, was often a challenge!). Furthermore, reroofing activity in the US remained robust. While some of this work was in response to the many storms that occurred late in 2020, much of this demand for shingles was spurred by homeowners – flush with cash and buoyed by record home values and low interest rates – opting to fix and repair their residences. Many homeowners decided that 2021 was a good time to finally replace that aging roof – not only boosting home values, but adding a more durable and weather resistant product.

In the MBM segment, production was supported by a number of factors, key among them:

  • growth in the construction of such structures as manufacturing plants, warehouses, and self-storage centers, where MBMs are frequently specified due to their moisture resistance
  • the ease of installing these membranes, many of which feature self-adhesive peel-and-stick backings that facilitate use, especially by modestly trained installers
  • shortages (and higher prices) for plastic single-ply roofing membranes due to refinery shutdowns in Texas and Louisiana that lowered production of many of the plastic resins needed to make roofing membranes – MBMs were a much more affordable and available alternative

While it is still too soon to make broad predictions about the US roofing market for 2022, initial signs look good. Demand for housing remains high, while homeowners continue to invest in their residences, thus supporting demand for asphalt shingles. In the commercial market, the prospect of rebounding construction activity as the COVID-19 pandemic recedes should bode well for manufacturers of MBMs.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly our series of Roofing studies in the Construction and Building Products catalog. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


December Retail Sales Report a Positive One for Building Materials Retailers

The release of the December 2021 retail sales report was in general a positive one for retailers of building materials and garden equipment and supplies. Sales in December declined around 3% from their November level. This monthly fall in sales activity can be attributed to a number of factors, such as:

  • supply chain difficulties that led to shortages of popular items often purchased at these stores, such as appliances
  • the onset of winter weather, which causes many DIYers and some contractors to put off outdoor work, such as the installation of decks – thus affecting lumber sales
  • the muted nature of many holiday gatherings due to the COVID-19 pandemic – many people delayed large family gatherings to minimize the risk of COVID, and thus put off purchases of gifts

For the year, though, overall retail sales by building materials and garden equipment and supplies were up 13.5% from 2020. This surge was spurred by:

  • high lumber prices – for most of the year, lumber prices remained well above their historical average
  • continuing high levels of housing starts and home remodeling activity, fueling demand for a wide range of building materials most often purchased at big-box retailers and hardware and garden stores
  • increased homeowner interest in outdoor activities, such as gardening, supporting purchases of seed, fertilizer, and related products

Industry professionals are remaining optimistic that the strong sales of 2021 will carry over to 2022. Home building and home remodeling activity remains high, while many consumers – despite rising inflation – are looking to upgrade their homes by replacing older appliances, applying a fresh coat of paint, and – once the weather clears – engaging in some landscaping work. 

TFG analysts will continue to monitor retail sales – as well as numerous other indicators – to gauge their effects on the US economy going forward.

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. Freedonia Custom Research is also available for questions requiring tailored market intelligence.