The COVID-19 pandemic is having a mixed impact on the nearly $50 billion global industrial and institutional (I&I) cleaning chemical market, according to a new Freedonia Group analysis. While global demand is expected to rebound in 2021 about as quickly as it’s projected to fall in 2020 as economies reopen around the world, the near-term impact will vary by market:
- The commercial market will be most severely affected and post sharp declines, and the manufacturing market is also expected to fall. These sectors are seeing a major impact as restrictions implemented to contain the virus cause economic activity to slow.
- The institutional and government market will see increases in 2020 as rising demand in healthcare settings offsets reduced demand from educational institutions closed by the pandemic, as well as lower consumption from governmental institutions struggling to deal with declining tax revenues.
Decreased Foodservice Activity Will Be a Sore Spot for Commercial Market
The largest commercial application for I&I cleaners, foodservice applications accounted for over 32% of global commercial cleaning chemical demand in 2019. Foodservice establishments, along with other commercial businesses that were deemed “nonessential” in many countries and faced extended closures – such as retail outlets and health clubs – will see the biggest demand drop for I&I cleaners in 2020.
While the economy will remain subdued in 2021 and many businesses closures will prove to be permanent, higher levels of cleaning chemical use and increased frequency of sanitation during the pandemic will drive a robust increase in consumption in 2021 as it recedes. Although the pace of growth is expected to slow after 2021, demand will remain elevated as businesses maintain somewhat stricter cleaning regimens as a means to reassure consumers that these businesses remain safe to patronize.
Manufacturing Market to Fare Better than Commercial, But Still Drop
Accounting for a quarter of global I&I cleaner demand in 2019, the manufacturing sector will contribute to demand declines in 2020, as the slowdown or closure of “nonessential” manufacturing will lead to a loss of cleaning chemical demand.
Demand in all manufacturing markets is forecast to return to pre-pandemic levels by 2021. Meanwhile, one bright spot will be the leading food and beverage manufacturing segment, which is seeing minimal disruption due to its designation as an “essential” industry.
However, because these operations are subject to strict sanitary and cleanliness guidelines – particularly in developed economies like the US and Western Europe – they already use I&I cleaners intensively, limiting additional demand opportunities during the pandemic.
Growth in the Institutional & Government Market to Prevent Steeper Total Losses in 2020
Unlike the commercial and manufacturing segments, demand for I&I cleaning chemicals in the institutional and government market is expected to rise in 2020 as a result of the COVID-19 pandemic and remain strong through 2024. A sharp jump in healthcare utilization worldwide and the necessity to frequently clean and sanitize “essential” governmental facilities will help drive demand.
In the leading healthcare segment, increased intensity and frequency of cleaning and sanitization, as well as the use of higher performance cleaners certified for use against the coronavirus will drive near-term demand. Growth is expected to slow in 2021, however, as the pandemic recedes and healthcare utilization rates return to more normalized levels.
Looking for More?
Global Industrial & Institutional (I&I) Cleaning Chemicals is now available from The Freedonia Group.
About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.