Industry Impacts of Coronavirus (COVID-19)

The impacts of coronavirus and COVID-19 continue to be felt differently across various industries. During resulting quarantines, some industries have seen a rise in demand and a push to be deemed “essential” for local, state, and national governments, while other industries have experienced a decline in demand or have struggled to survive numerous shutdowns and shelter-in-place orders.

Data is updated on a regular basis, so check back frequently to get the most up-to-date information.

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May 1, 2021

  • Real disposable income, a driver of spending on advertising, increased 23% in March following an 8.2% decrease in February and an 11% increase in January. The increase in disposable income in March largely reflected an increase in government transfer payments to individuals, primarily the additional round of direct economic impact payments authorized in The American Rescue Plan Act. The January increase was driven in large part by government transfer payments, which rose 52% from the prior month, reflecting both stimulus checks and the supplemental $300 weekly jobless benefit payments. Real personal consumption expenditures increased 3.6% in March following a 1% decrease in February, following a 2.4% increase in January.
  • Direct-to-consumer (D2C) sales growth has drawn the interest of advertising agencies. Boomn, Homestead Studios, Freelance Crew, and several other agencies are expected to launch in-house D2C brands in 2021. Industry experts expect agencies to focus on streaming and digital television to drive sales growth and new user acquisition for clients, as D2C brands have likely reached the point of diminishing returns on Facebook and other social outlets.
  • Time spent with media supported primarily by advertising dollars fell to an all-time low in 2020, according to PQ Media's annual Global Consumer Media Usage Forecast. The time the average American spent with all forms of media rose 2.9% to 73 hours weekly in 2020, largely due to the impact of the global pandemic. The share of that 73 hours spent with ad-supported media fell to 44.8%, however.
  • The Conference Board Consumer Confidence Index increased for the fourth month in a row in April, rising to 121.7 from 109.7 in March(1985=100). The Present Situation Index, which is based on consumers' assessment of current business and labor market conditions, increased to 139.6 in April from 110.1 in March. The Expectations Index, which is based on consumers' short-term outlook for income, business, and labor market conditions, increased to 109.8 in April from 108.3 in March. Confidence remains below the pre-pandemic level of 132.6 in February 2020.
  • Local advertising will rebound along with the greater economy through 2021, according to the latest US Local Advertising Forecast published by BIA Advisory Services. BIA expects total local advertising expenditures to rise 2.5% year over year in 2021. About 22.7% of the increase is expected to come from direct mail and 17% each from mobile and online advertising. Local TV and radio round out the top five, accounting for 11.4% and 9.2% of the total, respectively.
  • Total advertising spending is expected to have declined 8% in 2020. Spending on traditional media that includes linear TV, out-of-home, standard radio, print, and direct mail is expected to have declined 30%.

May 1, 2021

  • Agricultural chemicals including herbicides and fungicides are in tight supply this spring as shipping backlogs and pandemic-related delays have run headlong into higher demand caused by increased row-crop acreage this year, according to Progressive Farmer magazine. Experts say that some farmers may need to use unfamiliar generic herbicides, which can come with mixing and quality issues depending on their age. Others may have to hunt down substitute pesticides, which will require studying efficacy charts.
  • Ethanol blending activity, a measure of demand for ethanol and the corn from which most ethanol is made, increased to 890,000 barrels per day (bpd) during the first week of April. It was the highest blending activity rate since the declaration of a national emergency due to the pandemic on March 13, 2020. Almost a third of the US corn crop is used to make ethanol and its byproducts.
  • The Energy Information Administration (EIA) maintained its reduced ethanol production forecasts for both 2021 and 2022 in its latest Short-Term Energy Outlook, released on April. The forecast for 2021 is now at 960,000 barrels per day (bpd), down from the 980,000 bpd estimate made in February. Ethanol production in 2022 is currently expected to average 990,000 barrels per day, down from the forecast of 1.02 million barrels per day made last month. Production averaged 1.03 million barrels per day in 2019 but was negatively impacted by the coronavirus pandemic in 2020.
  • Field trials of some agricultural chemicals have decreased during the pandemic, according to Agribusiness Global. Universities have been notifying companies that they will accept less field trial work due either to directives from university administration or the lack of field staff to conduct the work. It has been difficult for universities to get accepted trials done with the same degree of consistency and detail, as a large staff complement and student workers are required to get many of the daily tasks done. The student worker resource pool hasn’t been available due to pandemic-related issues.
  • Federal aid payments were estimated to account for 40% of total net farm income in 2020, but the record payments of last year may not continue. The Food & Agriculture Research Institute (FAPRI) of the University of Missouri finds that baseline updates for US agriculture markets estimate federal farm payments will fall from $32 billion in 2020 to $16 billion in 2021. The analysis also estimates that without a strong economic recovery, farm income, a driver of demand for animal feed, will decrease by more than $10 billion.
  • China is forecast by the US Department of Agriculture (USDA) to import a record $27 billion worth of farm products in fiscal 2021 (started on October 1) and regain its rank as the top foreign market for American farm products.
  • The American Chemistry Council expects total US chemical exports to rebound in 2021 and grow 10.9%, but a full recovery to pre-pandemic levels is not expected before 2022.
  • Agricultural chemical industry employment increased 3.6% year over year in February, according to the US Bureau of Labor Statistics.

May 1, 2021

  • Departures of jets powered by engines from General Electric (GE) and its CFM International joint venture are still down about 34% from the pre-pandemic baseline, according to GE officials.
  • GE Aviation expects maintenance shop visits, a driver of demand for parts, to be flat in 2021 compared with the prior year’s depressed level. Revenue from maintenance and repair work was down 43% in Raytheon Technologies' Collins Aerospace parts division and 35% in the Pratt & Whitney engine unit in early 2021. Boeing CEO David Calhoun called 2021 and the vaccine distribution a “key inflection point” but also warned of an uneven recovery.
  • The coronavirus pandemic has resulted in fewer planes sold, fewer flying hours, and older aircraft retiring early as fleets are pruned. Aircraft engine and part manufacturers, whose profits rely heavily on keeping aircraft running for years after they are sold, have been negatively impacted. Pratt & Whitney reported a 20% year-over-year revenue decrease for 2020. GE Aviation’s sales decreased 33% year over year in 2020.
  • The F-35 Lightning II Joint Strike Fighter hasn’t entered full-rate production due in part to pandemic-related issues, according to the US Department of Defense (DOD). Lockheed Martin, which fell short of the 2020 goal to produce 142 F-35s, cited pandemic-related supply chain disruptions as a primary cause. It could take until at least 2023 for the manufacturer to catch up on the missed deliveries.
  • Several companies, trade groups, and non-profits are developing digital passports intended to show proof of coronavirus vaccination and testing status, but public health officials are urging policymakers to resist calls for digital passport systems. It is hoped by many that the passports will boost a variety of industries, including those involved in air transportation, by acting as a credential for access to airlines, events, and tourist destinations. Opponents say, however, that the protection which coronavirus vaccines offer is very far from complete and very little is known about the effectiveness of vaccines in preventing infection or even asymptomatic disease against several variants circulating in different countries. The World Health Organization released a statement in late January stating that governments should "not introduce requirements of proof of vaccination or immunity for international travel as a condition of entry" at present.
  • The US government is requiring travelers to show proof of a recent negative COVID-19 test before boarding flights to the US. A senior Centers for Disease Control and Prevention official said in late January that the government is also weighing whether to require coronavirus tests before domestic flights.
  • Robert Spingarn, investment bank and financial services company Credit Suisse's aerospace analyst, estimates that the active commercial airline fleet decreased 37% in 2020. Spingarn says that about 70% of the fleet that was flying at the end of 2019 could be brought back using only engines that won't need overhauls until 2023 or later.
  • Most of American Airlines' parked aircraft are in an "active parked state," which means the airline can call them back into service at any time. Aircraft maintenance doesn't stop, even when planes are grounded: "The whole process is designed around ensuring that when the aircraft comes back into the operation it's as safe and reliable as it was when it entered into that storage program," said Craig Barton, the head of technical operations for American Airlines. Demand for replacement parts may rise initially as idle planes provide an opportunity to complete maintenance routines, but may eventually fall if planes remain out of service for an extended period.
  • Boeing CEO David Calhoun said that the company plans to have 130,000 employees at the end of 2021, down from 160,000 at the beginning of 2020. Boeing had already announced that more than 19,000 employees would be leaving this year, according to The Associated Press.
  • Aircraft engine manufacturer Rolls-Royce said that the impact on the company of the coronavirus pandemic will last seven years.

May 1, 2021

  • Many analysts expect the Biden administration to maintain 10% tariffs on aluminum imports that were set under former President Trump. "Those tariffs have worked in so far as they have leveled the playing field for American producers of steel and aluminum," Commerce Secretary Gina Raimondo said in April. US producers, many of which have been negatively impacted by the coronavirus pandemic, have urged the Biden administration to keep the tariffs in place.
  • The Biden administration has already decided to maintain tariffs on aluminum imports from the United Arab Emirates, reversing former president Trump's move to end the levies on his last day as president. A 10% tariff was imposed on most aluminum imports in 2018. Trump had previously excluded Argentina, Australia, Canada, and Mexico from the tariff.
  • President Biden presented a $2 trillion infrastructure spending plan which, if passed by congress, is likely to benefit aluminum producers. The proposal that would rebuild 20,000 miles of roads, expand access to clean water and broadband, and invest in care for the elderly. Biden has encountered Republican pushback on the scope of the plan and its reliance on corporate tax increases for funding. Axios news services said that President Biden's transition team indicated to business leaders in December 2020 that it sees an opening to use an infrastructure deal as a driver for more economic and job relief as the US emerges from the coronavirus pandemic.
  • Aluminum producer Novelis projects global aluminum demand to remain on a growth trajectory that will not be negatively impacted long-term by the coronavirus pandemic. The company expects demand for aluminum flat-rolled products to increase approximately 5% in 2021. Growth will be driven by increasing demand from automakers and aluminum can producers.
  • The spot price of aluminum was $2,418.65 per ton on April 30, up from $2,213 per ton on March 31. The spot price had fallen to $1,461 per ton on May 11, 2020 from about $1,820 per ton in January.
  • Several industry analysts expect new auto sales to increase about 6.9% in 2021. The National Automobile Dealers Association expects 2021 sales of 15.5 million. Forecasters at car-shopping web site Edmunds also predicted 2021 sales of 15.5 million. Charlie Chesbrough, senior economist for Cox Automotive, said that Cox expects 2021 sales of 15.7 million. US auto sales in 2020 were 14.5 million, down 15% from 2019. It was the fourth-largest annual decline since at least 1980.
  • Analysts surveyed by Reuters news service expect a surplus of 1.8 million tons of aluminum, on average, in 2021 A 2.6 million ton surplus was expected for 2020. Many industry experts say that additional capacity needs to be idled to balance supply and demand, but many producers will not do so, partly because the cost of inputs such as electricity, carbon, and alumina have tumbled, supporting their margins.
  • Aluminum manufacturing industry employment decreased 4.2% year over year in February but was up 3.1% compared to the pandemic-related low of April 2020, according to the US Bureau of Labor Statistics.
  • The Institute for Supply Management’s monthly Purchasing Managers’ Index (PMI) increased to 64.7% in March from 60.8% in February. The figure indicates expansion in the overall economy for the 10th month in a row after contraction in April 2020. The increase indicates a faster rate of expansion compared to the prior month. Any reading above 50% indicates expansion compared to the prior month, while anything under 50% indicates contraction. The New Orders Index registered 68%, up from February’s reading of 64.8%. The Production Index registered 68.1%, up from the February reading of 63.2%. The Employment Index registered 59.6%, up from the February reading of 54.4%.

May 1, 2021

  • A Centers for Medicare and Medicaid Services (CMS) waiver authority included in the American Rescue Plan Act of 2021 authorizes reimbursement to ambulance services for treatment in place delivered to Medicare beneficiaries during the public health emergency. The Act also provides additional funding for the Provider Relief Fund for rural EMS.
  • The US Department of Health & Human Services (HHS) has renewed the Public Health Emergency (PHE) declaration for COVID‑19 for another 90 days, beginning on April 21 (the date the PHE was previously scheduled to expire) and extending through July 19, 2021. Industry stakeholders should remember that HHS retains the discretion to terminate the PHE at any time.
  • The No Surprises Act included in the coronavirus stimulus package passed in December 2020 includes air but not ground ambulances. The Act, which took effect in January 2022, bans surprise medical bills in emergencies as well as those from out-of-network providers who treat insured patients at an in-network medical facility. Research published in 2020 found that 79% of all ground ambulance rides could result in an out-of-network bill. The study was based on a large national health insurer’s claims data from 2013 to 2017. Another study, published in 2019, found that 86% of ambulance rides to hospital emergency departments resulted in an out-of-network bill for patients with private insurance, a far higher rate than from other physician specialists encountered in an ER visit, including ER doctors and anesthesiologists.
  • The Department of Health and Human Services announced is providing $1.48 billion for ambulance services from the Provider Relief Fund. The $1.48 billion is an addition to the $350 million that ambulance services had received from the federal government since the beginning of the pandemic, for a total of $1.83 billion.
  • EMS personnel are at a higher risk of dying from COVID-19 than other healthcare or emergency services professionals, according to an analysis conducted for industry news site EMS1. Researchers estimate that the number of EMS personnel COVID-19 related deaths is about three times higher than that for nurses and about five times higher than that for physicians. EMS professional fatalities were highest in New Jersey (36% of fatalities), New York state (22%), and Pennsylvania (8%).

May 1, 2021

  • About 72% of ambulatory surgery centers (ASC) remain independent despite a high level of mergers and acquisitions in 2020, according to VMG Health. ASC chains anticipate growing market share in the coming months by adding new centers, working with physicians on new facilities, and partnering with health systems to enter new markets.
  • Ambulatory surgery centers are reporting shortages of gloves, gowns, and blue sterile wrap that is most frequently used for instruments, kits, and trays. Adjustments include a combination of working with alternative vendors, ordering through multiple vendors, and deploying alternative practices like using more pans or switching to one-tray systems to reduce the amount of blue wrap that is needed.
  • The COVID-19 pandemic accelerated the move away from large traditional hospital institutions and expedited the move toward technology, telemedicine, and ambulatory surgery centers (ASCs), according to Elizabeth LaBouyer, RN, executive director of the California Ambulatory Surgery Association. The pandemic has likely accelerated even further the level of consumer acceptance for ASCs based on their desire to avoid hospital settings, she added. ASCs are working through a backlog of care in early 2021 and will rebound in the months ahead. They are likely to benefit from a lasting perception by both patients and physicians that ASCs don't pose the same risk of exposure to infection as a hospital setting.
  • Video-based post-discharge visits were noninferior to in-hospital follow-up in terms of the proportion of patients returning for a hospital encounter within 30 days of discharge after low-risk surgery at an ambulatory surgery center, according to a study completed at Carolinas Medical Center in Charlotte, NC. Moreover, the virtual visits were typically about a half hour shorter than the usual in-person visit but still provided patients with the same amount of time actually spent with their surgeons. The improvement in successful follow-up was accompanied by significantly greater satisfaction among participating nurses and no drop in patient satisfaction.
  • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
  • The Centers for Medicare and Medicaid Services (CMS) revised its guidance for allowing same-day, ambulatory surgical centers to temporarily certify as hospitals and provide inpatient care for periods longer than 24 hours before being required to transfer patients to an acute-care hospital. The update clarifies that ambulatory surgical centers need only to provide 24-hour nursing services when one or more patients are on-site instead of having nurses be present even when no patients are in the facility in order to achieve hospital certification. The actions are a response to reports from hospitals that they are running out of beds as a result of the surge in COVID-19 cases.
  • Ambulatory surgery centers may benefit from the Centers for Medicare & Medicaid Services (CMS) initiative known as ‘Hospitals without Walls’. CMS has authorized new regulatory flexibility through the initiative that will allow hospitals to provide hospital-level care for patients in non-traditional settings. The waiver is intended to ensure that local hospitals and health systems have the capacity to handle the anticipated surge of COVID-19 patients through the duration of the public health emergency. Industry experts say that, due to their facility standards, personnel, equipment, and usual proximity to hospitals, ASCs a most likely candidates to serve as an alternate location for hospital services.
  • Knee replacements are expected to triple between 2020 and 2040, with hip replacements not far behind, according to the Journal of Rheumatology.

April 26, 2021

  • The Centers for Disease Control and Prevention said in April that, based on analysis of the latest available data, cleaning once a day is usually enough to minimize the chance of coronavirus transmission in most settings. Amusement parks and arcades are likely to benefit if the guidance results in lower pandemic-related cleaning costs. The CDC did identify one appropriate situation for deep cleaning: an indoor environment where a case of COVID-19 had been confirmed within the past 24 hours.
  • Michael Browning Jr., the co-founder and CEO of Urban Air Adventure Parks, said that his theme parks in states that have reopened after coronavirus-induced shutdowns, like Texas and Florida, are outperforming their pre-COVID levels. “For example, in Texas, we’re [at] 120% of our 2019 numbers, our pre-COVID numbers,” Browning said. He attributed the dramatic increase in part to pent-up demand.
  • Consultant Dennis Speigel estimates that US theme parks, worth $25 billion in 2019, have lost $10 billion since the beginning of the pandemic. The impact, he says, has been larger than that of all economic downturns of the past 20 years combined. Spiegel estimates global losses during the pandemic to be $30 billion.
  • Health officials in several states are using large gathering areas like amusement parks as COVID-19 vaccination sites. Disneyland in Anaheim, CA, Minute Maid Park in Houston, TX, and Fairgrounds in Dallas, TX, are among the facilities that are being used as vaccination sites. California health officials plan to vaccinate as many as 12,000 people per day at sites like Disneyland.
  • Disney will lay off 32,000 employees in the first half of fiscal 2021. Prolonged closures at Disney's California-based theme parks and limited attendance at its open parks is a primary cause of the layoffs, the majority of which will be from its parks, experiences, and products division. The total includes the 28,000 workers that the company previously announced in September.
  • Employment in the amusements, gambling, and recreation industry decreased 42% year over year in February.
  • Pandemic-related practices adopted by amusement parks include selling tickets in intervals and only allowing a set number of guests enter during the interval; limiting daily attendance to far below capacity; allowing guests to scan themselves in; and adjusting to one-way traffic flow to minimize guest contact (similar but not identical to IKEA).
  • Theme parks are also leaving seats or rows vacant on rides. Compliance with social distancing while waiting in the long lines that characterize popular rides remains an issue, as is dining room capacity, which will likely be reduced. COVID-19 may end 3-D rides that require reusable glasses. Shanghai Disneyland has successfully restarted its popular character dining programs.

May 1, 2021

  • Pandemic-related supply chain issues that have resulted in rising corn prices and possible corn shortages have some livestock farmers preparing to switch to wheat feed. “We are running out of the corn in the country and wheat got really cheap,” said Joe Nussmeier, a broker at Frontier Futures in Minneapolis. By mid-June, “the only thing to feed critters at that time will be wheat.” Changing the diet of animals comes with some risk: wheat shouldn’t be fed to younger cattle and cows can get bloated if they eat too much of it. Researchers at North Dakota State University recommend that wheat make up no more than 15% of an animal’s diet when it’s being introduced. The color of a bird’s skin can also vary depending on what it eats, with corn-fed chicken looking yellowish, a trait shunned in some countries.
  • The US Department of Agriculture (USDA) allocated an additional $1.1 billion to increase payment rates for more than 410,000 cattle producers under the Coronavirus Food Assistance Program (CFAP) 1 program. USDA will continue taking applications from swine producers and contract growers for CFAP-AA but would not release payments to pork producers as of late March. The department stated that the payments "are likely to require modifications to the regulation as part of the broader evaluation and future assistance."
  • The USDA also reopened enrollment for CFAP-2 on April 5 and began accepting new applications for at least the next 60 days. USDA also announced it will spend another $6 billion on other producers that earlier COVID-19 aid programs have missed.
  • Livestock receipts are expected to increase $8.6 billion in 2021 but higher grain prices will increase animal feed costs and eat into producer’s profits, according to the US Department of Agriculture. Many experts say that support for the animal production industry may be curtailed in future coronavirus stimulus packages as a result.
  • About 87% of an additional $2.3 billion in COVID-19 aid to farmers is earmarked for those who raise pigs and poultry under contracts with food companies. The aid, which comes from money allocated to the US Department of Agriculture from previous pandemic stimulus legislation, follows record federal government subsidies for farmers in 2020. Contract farmers were not eligible for COVID-19 aid under previous USDA programs. They can receive payments if they produced hogs or poultry under a contract for the last two years and had lower revenue in 2020 than 2019.
  • Livestock producers will be compensated for animals culled during the pandemic under the $900 billion coronavirus relief bill that was signed into law in late December 2020.
  • Industry experts say that the agricultural provisions in the latest coronavirus stimulus package are far more detailed than in previous aid packages — which gave Agriculture Secretary Sonny Perdue great leeway in distributing aid — and direct aid to producers and processors who hadn't yet received assistance.

May 1, 2021

  • Some analysts expect the Paycheck Protection Program (PPP) to run out of funding before the May 31 application deadline. Lenders and borrowers are asking for additional funding. Lawmakers allocated $284 billion to the program when it reopened in January. Sam Sidhu, chief operating officer of Customers Bank in Wyomissing, PA, estimates that $100 billion to $150 billion more would probably be enough funding for the PPP make it to May 31 with some money left over.
  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Rising demand from the health care and electronics manufacturing sectors will boost sales of nonwoven cleanroom apparel, according to the Global Trade news site. Pharmaceutical, medical equipment, and electronics manufacturers use clean rooms to ensure the purity and/or sterility of their products. Nonwoven cleanroom garments are gaining wider popularity in comparison to other materials as they do not necessitate the need for spinning or weaving the fabrics and can be derived from different sources of raw materials according to Global Trade. Activewear manufacturer 99Degrees began making reusable and disposable isolation gowns in 2020 in response to the pandemic-driven demand increase.
  • Americans are buying apparel again, though they’ve shifted to the casual and athletic wear more suitable to working or lounging at home, says Sue Welch, CEO of supply chain software provider Bamboo Rose. “People are bored with everything” in their wardrobes, Welch says. The sales rebound has led to shortages of some items, as demand has risen faster than supply.
  • Apparel manufacturing employment decreased 8.3% year over year in March but was up 33.9% from the low of April 2020, according to the US Bureau of Labor Statistics.
  • Clothing and clothing accessory store sales increased 18.3% month over month on an adjusted basis and 104% year over year on an unadjusted basis in March, according to the US Census Bureau.

April 28, 2021

  • Consumers stocking up on food at the onset of the pandemic drove a 45% year-over-year increase in deep freeze sales in the first quarter 2020, according to the Association of Home Appliance Manufacturers. After an initial run on appliances in the early days of the pandemic, manufacturers cut back on production amid factory shutdowns and an anticipated reduction in consumer spending. Appliance production has also been affected by a scarcity of key components such as wiring harnesses, compressors, steel, and semiconductors, which also saw production disruption earlier in the pandemic.
  • Consumer Priority Services (CPS) is using Zoom Video services to communicate with customers and remotely diagnose appliance issues, walk owners through troubleshooting steps, and determine what parts may be needed if an onsite visit is required. Repair and maintenance firms have also created safety protocols, often based on CDC guidelines, to protect technicians and property owners. Repair firms are outfitting service personnel with masks, gloves, and hand sanitizer. Trucks are sanitized frequently. Technicians request the shortest route through the home to reach the appliance and offer touchless payment options (phone or online). As vaccine distribution increases, consumers and technicians may be more comfortable with in-home services. On April 19, all Americans over age 16 became eligible to be vaccinated. As of April 27, about 96 million Americans were fully vaccinated or nearly 29% of the US population.
  • The value of manufacturers’ unfilled orders for household appliances increased more than 78% in February 2021 compared to a year earlier, according to the US Census Bureau. Factory shutdowns and supply chain disruption slowed appliance production and some appliance retailers report demand is outstripping supply. In the early days of the pandemic, refrigerator and freezer sales skyrocketed as consumers stocked up on food, and retail appliance inventories became depleted. Some appliance retailers report long wait times on new appliance orders. Longer wait times for new appliances have driven repair demand as consumers try to make do with older products until supplies return to normal.
  • Shortages of steel and computer chips have affected much of the US manufacturing sector so far in 2021, including makers of appliances and appliance components. The lingering effects of plant shutdowns early in the pandemic, combined with high demand for semiconductors from a range of industris, has logjammed supplies of computer chips. Some types of steel products are also in short supply. US steel mills that trimmed production or shut down temporarily have gradually begun to ramp production back up. Capacity utilization in US steel mills the week ending April 24, 2021 was 78.4% compared to 55.4% a year earlier during the lockdown, according to the American Iron and Steel Institute. The shortages may also limit appliance repair firms’ ability to stock key replacement parts and components. Executive at semiconductor firms believe the chip shortage will likely persist into 2022, according to The Wall Street Journal.
  • The appliance repair industry is starting to attract new entrants as people who have lost their jobs or seek a career change are attracted by the uptick in demand and potential for good wages. Prior to the pandemic, appliance repair jobs were expected to decline nearly 7% between 2019 and 2029, according to the Bureau of Labor Statistics (BLS). However, the industry’s main US trade group – the United Appliance Servicers Association – says demand for technicians is strong, primarily because there are only two major appliance repair schools in the US where new technicians can receive training.
  • The pandemic-related appliance shortage and resulting rise in demand for repair services has brought more attention to Right to Repair legislation initiatives in some states. Some manufacturers restrict access to parts, tools, and repair manuals for appliances and electronics that contain digital technology, which is more prevalent with the increased popularity of IoT-enabled smart appliances. Such restrictions require repairs to be performed by manufacturer-approved technicians, which critics argue stifles competition and consumer choice. Opponents to Right to Repair argue it can result in unauthorized access to intellectual property. The US Public Interest Research Group, which is supportive of Right to Repair initiatives, says the average US family could save more than $300 per year by having appliances and electronics repaired instead of replacing them.

May 1, 2021

  • Prices for flat-rolled and plate steel products continue setting new record highs week after week. Near-term supply constraints still weigh on the market, pushing prices higher for longer, as steel companies report record profits and are expected to remain disciplined with regards to US steel production, according to financial information and analytics firm S&P Global.
  • President Biden presented a $2 trillion infrastructure spending plan which, if passed by congress, would benefit firms that make bar joists, concrete reinforcements, and structural metal for bridges. The proposal that would rebuild 20,000 miles of roads, expand access to clean water and broadband, and invest in care for the elderly. Biden has encountered Republican pushback on the scope of the plan and its reliance on corporate tax increases for funding. Axios news services said that President Biden's transition team indicated to business leaders in December 2020 that it sees an opening to use an infrastructure deal as a driver for more economic and job relief as the US emerges from the coronavirus pandemic.
  • Some analysts expect the Paycheck Protection Program (PPP) to run out of funding before the May 31 application deadline. Lenders and borrowers are asking for additional funding. Lawmakers allocated $284 billion to the program when it reopened in January. Sam Sidhu, chief operating officer of Customers Bank in Wyomissing, PA, estimates that $100 billion to $150 billion more would probably be enough funding for the PPP make it to May 31 with some money left over.
  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Construction spending decreased 0.8% month over month on an adjusted basis but increased 3.4% year over year on an unadjusted basis in February, according to the US Census Bureau. Residential construction spending decreased 0.2% month over month but increased 19.7% year over year in February. Nonresidential construction spending decreased 1.3% month over month and 7.8% year over year in February.
  • Spending on nonresidential building projects is declining and will do so through 2021, according to a mid-year update to the American Institute of Architects’ (AIA) Consensus Construction Forecast. The AIA estimates an 8% spending drop in 2020 and just under 5% in 2021 due to pandemic-induced economic disruptions. This is the first time in nearly a decade that nonresidential construction spending has trended downwards, according to the AIA.

May 1, 2021

  • Some analysts expect the Paycheck Protection Program (PPP) to run out of funding before the May 31 application deadline. Lenders and borrowers are asking for additional funding. Lawmakers allocated $284 billion to the program when it reopened in January. Sam Sidhu, chief operating officer of Customers Bank in Wyomissing, PA, estimates that $100 billion to $150 billion more would probably be enough funding for the PPP make it to May 31 with some money left over.
  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Architectural services may benefit from an anticipated return to co-working spaces when the coronavirus pandemic recedes. Facilities are likely to be renovated if co-working spaces prove to be an attractive option for firms that adopt so-called hybrid work policies, with people working remotely as often as three or four days a week and only visiting the office for essential face to face meetings, according to Realty Biz News.
  • Architecture firms are being asked to renovate buildings because millions of Americans are expected to continue working from home for years. The lack of workers returning to the office on a consistent basis means that rows of office cubicles will likely be phased out, according to NBC News. Spaces will also be designed with a focus on flexibility, so areas can be easily transformed to fit the specific needs of the day, whether that includes a small brainstorming meeting, medium-sized collaboration session, or a large gathering. Redesigned work stations will be more versatile and will feature a strong focus on access to fresh air.
  • Architecture firms are getting many requests to upgrade HVAC systems. High-density filtration is a common request from office building owners, as are ion technology and UV lighting in HVAC systems. Clients are also requesting a change from inoperable windows to operable ones to access outdoor fresh air, and installation of more hands-free technologies for doors, sinks, toilets, etc. Much of the work is being done when building leases turn, which happens every 5, 7, or 10 years, depending on the contract.
  • The coronavirus relief package signed into law in late December 2020 explicitly states that small businesses which received Paycheck Protection Program (PPP) loans and used those funds to incur otherwise deductible eligible expenses can deduct the expenses even if they reasonably expect to receive forgiveness of the PPP loan. The relief package deductibility rule is a reversal of the Internal Revenue Service (IRS) position that taxpayers cannot claim such a deduction because it would be an impermissible double tax benefit to have income on debt forgiveness not to taxed as income, and then to also allow tax deductions for the expenses paid with the forgiven loan money. • Architectural serv
  • Architectural services industry employment declined 3.7% year over year in February but was up 1.9% from the pandemic-related low of April 2020, according to the US Bureau of Labor Statistics.
  • Construction spending decreased 0.8% month over month on an adjusted basis but increased 3.4% year over year on an unadjusted basis in February, according to the US Census Bureau. Residential construction spending decreased 0.2% month over month but increased 19.7% year over year in February. Nonresidential construction spending decreased 1.3% month over month and 7.8% year over year in February.
  • Many industry experts say that the coronavirus outbreak may slow or reverse the development of high-density housing. Transportation and denser housing have been critical for cities struggling with a severe affordable housing shortage. “I wouldn’t make any big development decisions right now,” said Dr. Jackson, a former officer in the Epidemic Intelligence Service at the Centers for Disease Control and Prevention. The era of a single architect designing buildings is over, Dr. Jackson added. Transit-oriented development will need to bring in the best minds from design, health, and transit to create living spaces that are conducive to community but also the well-being of residents.

April 23, 2021

  • Industry experts expect a strong rebound as the pandemic wanes. The collective wealth of America’s 651 billionaires has jumped by $1 trillion since the start of the pandemic, according to Americans for Tax Fairness and the Institute for Policy Studies. Some of those gains are likely to be used to purchase works of art.
  • Global sales of art and antiques were estimated to have decreased 22% year over year in 2020, largely due to pandemic-related closures of galleries and art fairs, according to the annual Art Basel and UBS Art Market report published in March. Combined dealer and auction house sales totaled $50.1 billion, their lowest level since the financial crisis of 2009. Dealer sales decreased an aggregate 20%, to $29.3 billion, while public auctions, many of which were conducted in online-only formats, were down 30%, to $17.6 billion. Private transactions at auction houses increased 36%, to $3.2 billion, according to the report.
  • Traditional auction houses such as Sotheby’s and Christie’s have taken significant hits due to the coronavirus pandemic, according to the Wall Street Journal. Christie’s sales decreased 22% year over year in 2020, while Sotheby’s decreased 12% despite efforts by both firms to transition to a digital platform.
  • Galleries that operate online only increased to 35% of total galleries in 2020 from 15% in 2018 and 2019, according to Artsy, an online platform for fine art.
  • About 75% of galleries have partnered with an online marketplace in 2020, according to Artsy.

April 11, 2021

  • Some uncertainty remains about road construction in 2021. So-called "shovel-ready" road construction projects may be fewer, as contractors took advantage of less congested roadways during the coronavirus pandemic to race through project backlogs in 2020. Funding may be available for new projects, however, as many states have been able to preserve highway funding despite the pandemic through program cuts or by transfers from their general funds.
  • The $900 billion coronavirus relief package signed into law in late December 2020 includes $10 billion for state highways. Industry experts say that the funding is intended to help offset severe losses in state transportation revenues due to reduced vehicle travel during the pandemic.
  • Q4 shingle shipments increased 44.9% year over year in 2020 while shipments for the full year were up 10.1%, according to the Asphalt Roofing Manufacturers Association.
  • A coalition of construction industry associations and businesses including building material manufacturers and contractors is urging Congress to consider a new tax credit proposal that could spur property owner investment in roofing and other renovation and repair projects. The proposal includes a refundable tax credit of up to 30% of the cost of qualified home improvements, which makes improvements more affordable but also helps to support manufacturers of building materials and contractors by encouraging property owners to buy materials and have them professionally installed.
  • Employment in the asphalt product manufacturing industry decreased 6.7% year over year in February.
  • Manufacturers of asphalt paving and roofing materials increased their prices 2.7% year over year in March, and 1.4% since the beginning of the year. The cost to manufacture asphalt products is affected by the price of oil, a major feedstock. Crude oil spot prices rose from about $47 per barrel on January 4 to $59.32 on April 9.

April 11, 2021

  • New auto sales, an indicator of demand for some audio and video equipment, increased 8% year over year during Q1 2021 as strong March sales far outpaced last year when the coronavirus pandemic began. A shortage of computer chips is forcing automakers to cut production, however, and that could affect sales later in the year.
  • The COVID-19 crisis drove digital media consumption to new heights, while traditional media stagnated, according to eMarketer. Time spent with digital increased 15% year over year in 2020 to 7 hours, 50 minutes daily. Connected TV usage increased 33.8% year over year to 1 hour, 17 minutes per day. Subscription streaming usage increased 33.9% to 1 hour, 12 minutes per day. Digital audio usage increased 8.3% to 1 hour, 29 minutes per day. eMarketer predicts that these formats will claim even more daily media time going forward. Traditional TV, social media, tablets, and desktops/laptops will likely decrease year over year in 2021.
  • A pandemic-induced spending shift from restaurants, bars, salons, travel, live events, movie theaters, etc., contributed to a $100 billion uptick in e-commerce spending, notably on consumer electronics like audio and video equipment, according to eMarketer. Online consumer electronics sales during 2020 are estimated at $179.3 billion, up 19.5% from the pre-pandemic estimate of $150.1 billion.
  • Many legal experts agree that corporations can require COVID-19 vaccinations for employees. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with the union before mandating a vaccine.
  • TV remains the primary source of entertainment for 92% of Americans, according to “Content in the COVID-19 Era: Current Realities and Future Opportunities” report from the Consumer Technology Association (CTA). The report also finds that 60% of video content viewing time takes place in front of TV screens; the rest is on smartphones, computers and tablets. “Consumers are watching more content and watching longer, as new innovations in format and delivery draw in millions of first-time users," said Sayon Deb, manager, Market Research, CTA.
  • Production of audio and video equipment increased 5.9% year over year in February, according to the Federal Reserve.
  • The audio and video equipment industry is playing a pivotal role in connecting people and helping to keep businesses running through virtual meetings as the pandemic plays out. Businesses, entertainers, news organizations, and individuals have invested in AV equipment to remotely produce and broadcast content.
  • The AV industry is helping schools with technology to support distance learning. Manufacturers have an opportunity to work with schools and universities to develop technology plans, train staff, and supply them with audio and video equipment to make distance learning easier to execute.
  • Pro AV industry advertising spending is not expected to recover until late 2021 or 2022, according to financial firm PJ Solomon.
  • The pandemic is expected to drive innovation in the audio production industry. The need is rising for equipment that is wireless, hands-free, and less susceptible than traditional microphones, booms and audio filters to capturing and spreading infection. Greater demand for smaller but high-quality equipment is expected as individual and smaller crews produce content and broadcast live. Finally, consumers have become more comfortable with online streaming platforms and new content will need to be produced to keep these platforms running and viewership up. This will further drive demand for AV equipment.

April 20, 2021

  • Fewer vehicles are moving through the wholesale market and most are in rougher condition than usual, according to the Black Book vehicle history information service. “Condition of units is trending toward the ‘edgier’ side with damage, dash lights illuminated, and/or vehicles running on red and yellow lights,” Black Book notes.
  • Remarketers expect the shortage of available units to last well into the summer, according to Black Book. “Reduced rental returns to the market and lack of substantial volume of repossessions continue to have the largest impact on the wholesale supply levels.”
  • Industry analysts expect pending income tax refunds coupled with the latest round of COVID-19 stimulus checks to boost used-vehicle sales more than usual during the spring of 2021. Demand for used vehicles, usually strongest in the spring, is rising. The economic effects of the pandemic and the shortage of new-vehicle inventory at retailers have consumers looking for used options. Microchip and other supply constraints have further limited new-vehicle production.
  • There has been a noticeable increase in the number of vehicles being offered for sale with open recalls, according to Black Book. There have been some 250 million vehicle recalls over the last 10 years and one in four of those never got fixed, according to consumer advocacy organization Consumers' Checkbook.

April 22, 2021

  • A record 289 dealership transactions occurred during 2020, a 24% year-over-year increase, according to Kerrigan Advisors, a national sell-side advisor to dealerships. That is 47 more transactions than in the previous record year of 2015. “Owners of large dealership groups are choosing to sell their businesses at today’s high valuations rather than accommodate the changes and investments required in terms of electric vehicles and digital retail sales,” Kerrigan Advisors analysts said. “This resilient—and resurgent—auto retail performance of 2020 has increased demand for dealerships and has continued to fuel valuations.”
  • GM executives say that purchases through its Shop-Click-Drive online service, which was launched in 2013, have increased during the pandemic by about 40% from pre-COVID levels. About 85% of GM dealers are now using the service.
  • Retail sales for auto dealers increased 15% in value month over month on an adjusted basis and 82% in value year over year on an unadjusted basis in March.
  • The average price of a used vehicle increased nearly 14% — roughly 10 times the rate of inflation — to over $23,000 during 2020. It was among the fastest intra-year increases in decades, said Ivan Drury, a senior manager of insights for Edmunds.com. Charlie Chesbrough, senior economist for Cox Automotive, predicted a tight used-vehicle market with high prices for several more years.
  • Several industry analysts expect new auto sales to increase about 6.9% in 2021. The National Automobile Dealers Association expects 2021 sales of 15.5 million. Forecasters at car-shopping web site Edmunds also predicted 2021 sales of 15.5 million. Charlie Chesbrough, senior economist for Cox Automotive, said that Cox expects 2021 sales of 15.7 million. US new auto sales in 2020 were 14.5 million, down 15% from 2019. It was the fourth-largest annual decline since at least 1980.
  • Average new vehicle transaction prices increased 4.3% year over year but decreased 1.5% ($608) month over month in March to $40,472. Minivans had the biggest year-over-year growth, up 16.75%. The High-Performance segment followed closely behind with more than 11% growth year-over-year in the average transaction price. Electric Vehicles had the largest drop in transaction pricing year-over-year for March, down 4.93%.
  • Employment in the auto dealer industry decreased 4.1% year over year in March but was up 22.2% from the low of April 2020.

May 2, 2021

  • United Microelectronics Corporation (UMC), the world’s fourth-largest contract chipmaker, is expanding its capacity to produce "mature technology" chips like those used in many auto parts. A pandemic-related shortage of semiconductors has slowed production of auto parts, leading to shortages. UMC said it would add capacity for manufacturing 20,000 wafers a month at 28 nanometers, one of the process technology nodes worst-hit by the global chip shortage, at an existing fabrication plant.
  • Auto parts distributors may be impacted by pandemic-induced changes in logistics strategies that are being implemented in the auto industry. Many companies in the supply network are reducing reliance on the just-in-time, lean production practices that have guided automotive manufacturers for nearly 40 years, according to Reuters news service. Firms are sourcing products from multiple suppliers, asking suppliers to hold in warehouses a backlog of critical inventory, and building out software networks to better track suppliers. Companies are looking at the total cost of any approach instead of simply its upfront price tag, according to BorgWarner Chief Executive Frederic Lissalde.
  • The coronavirus pandemic is accelerating the transition to an e-commerce model that may threaten the viability of many auto parts distributors, according to some industry experts. Rapid development of e-commerce features including advanced search by year/make/model, exploded parts views, component search, and search by product specification may eliminate customers’ need for distributor expertise. The software advances may ultimately allow parts manufacturers to significantly increase direct sales without investing heavily in customer support. Experts say that a key distributor response to the challenge will be ensuring quick parts delivery through careful placement of distribution centers that resolve "last mile" delivery issues.
  • Supply chain disruptions and delivery delays caused by the coronavirus pandemic are likely to continue well into 2021, according to financial information and analytics firm S&P Global. A lack of air freight capacity and a shortage of empty containers and other equipment needed to haul products away from port facilities are creating difficulties for supply chains in all industries. Deliveries are likely to take longer and costs of in-demand items are likely to rise as container shipping rates jump.
  • Vehicle miles traveled (VMT), an indicator of demand for auto parts, decreased 0.4% month over month and 12.1% year over year in February, according to the Federal Highway Administration. VMT was down 13.2% year over year for all of 2020. The February year-over-year drop in VMT was largest in the Northeastern US (-18.5%) followed by the North Central (-14%), South Gulf (-13.9%),  South Atlantic (-9.9%), and West (-7.1%).
  • The average vehicle age, an indicator of demand for auto parts, rose to 11.9 years in 2020, one month older than in 2019, according to IHS Markit. The market research firm cites a pandemic-related decline in vehicle sales as the primary cause of rising average vehicle age, but notes that the higher average price of a new vehicle and the fact that many new vehicles last longer are also causing the average vehicle age to rise. New vehicles represented 6.1% of vehicles on the road in 2019, but IHS Markit predicts that they will be around 5% of vehicles in 2020.

May 2, 2021

  • Auto parts maker Dana raised its full-year earnings forecast in late April after beating first-quarter estimates. The company now expects full-year adjusted earnings of between $2.10 and $2.60 per share, compared to a prior forecast of between $1.90 and $2.40 per share. "Dana realized higher sales... as a result of continued strength in the light-truck market, as well as growth in both the commercial-vehicle and off-highway markets," said Chief Executive Officer James Kamsickas. He warned, however, that despite a recovery in end-markets from last year's downturn, higher costs due to supply-chain disruptions and shipping constraints continue to challenge the industry.
  • A letter addressed to congressional leaders of both parties and to White House officials from groups representing some of the world’s biggest technology companies argues against specifying what kind of semiconductor manufacturing should get federal financial support for domestic expansion. The letter specifically objects to requests from some companies -- like auto parts manufacturers -- seeking an increase of manufacturing capacity for more basic chips. “The market-distorting effect of ‘setting aside’ a portion of new capacity for legacy chips for any single, private sector would squeeze the remaining chip-consuming industries into the remaining new manufacturing capacity, artificially constraining supply,” the letter states. Industry experts say that pandemic-related supply chain problems have boosted support for federal funding of domestic semiconductor manufacturing.
  • Auto parts manufacturers are currently focusing on securing their supply chains due to pandemic-related shortages. Dana has begun sourcing key commodities including resin, castings, forgings, and some electrical components from multiple suppliers, is asking suppliers to hold in warehouses a backlog of critical inventory, and is building out its software network to better track suppliers. The company is also helping its smaller suppliers recruit workers and secure shipping space on containers to avoid any impact on its operations. Such approaches may cost more upfront, according to David Simchi-Levi, a professor of engineering systems at the Massachusetts Institute of Technology, but they are likely to pay for themselves if they help companies avoid the higher cost of parts shortages.
  • Industry experts cite a combination of pandemic-related issues as major contributors to the semiconductor chip shortage that is spreading across all aspects of the auto industry. The roots of the shortage lie in the early weeks of the pandemic, when auto plants worldwide abruptly shut down amid widespread stay-at-home orders and plummeting auto sales, according to consulting firm AlixPartners. Car companies and parts suppliers drastically cut their semiconductor purchases just as computer and consumer electronics manufactures increased purchases due to increasing sales that were also caused by the abrupt shutdown and widespread stay-at-home orders. “Semiconductor manufacturers weren’t getting orders from auto manufacturers. They were getting orders from other industries, so they started to reallocate production,” said Shawn DuBravac, chief economist of IPC, an electronics industry association. Auto sales recovered faster than expected, and automakers trying to increase chip orders found their suppliers busy making different, more advanced components for computer and consumer electronics manufacturers. Switching manufacturing lines from one type of chip to another is a lengthy process, and many chip manufacturers are reluctant to switch from producing the higher-margin advanced chips ordered by computer and consumer technology manufacturers to low-margin chips needed by the auto industry.

April 23, 2021

  • Auto parts retailers eager to capitalize on hopes that the end of the coronavirus pandemic is in sight may have trouble finding workers. Job seekers say that the wages being offered by employers in the post-lockdown job market are simply too low, according to NBC News. “They can't literally scoop up folks at the end of their rope without assuming anything beyond bare minimum pay,” said Atlanta resident John Huston, 59, a former senior marketing associate. “The reason that there are so many openings is that they do not pay a living wage."
  • Semiconductor manufacturer Intel plans to build two major factories in Arizona. The news comes amid a pandemic-related chip shortage that is slowing production in the auto industry. Intel's foundry will offer an alternative to Asian chip factories. President Biden has said that domestic semiconductor manufacturing is a priority for his administration.
  • A group of 15 US senators have urged the White House to work with Congress to address the global semiconductor shortage that is slowing or in some cases stopping auto parts production. The senators urged the White House "to support efforts to secure the necessary funding to swiftly implement the semiconductor-related provisions in the most recent National Defense Authorization Act, which would boost production of semiconductor manufacturing and incentivize the domestic production of semiconductors in the future." Auto parts retailers may soon face inventory shortages due to semiconductor-related production problems.
  • Vehicle miles traveled (VMT), an indicator of , decreased 11.3% year over year but increased 1.2% month over month in January, according to the Federal Highway Administration. VMT was down 13.2% year over year for all of 2020. The December year-over-year drop in VMT was largest in the Northeastern US (-16.2%) followed by the North Central (-11.8%), West (-11.2%), South Atlantic (-11.1%), and South Gulf (-7.9%).
  • Employment in the auto parts and accessories store industry decreased 1.2% year over year in February, but was up 12.5% from the low of May 2020.
  • The auto parts e-commerce market is expected to rise to $22 billion by 2023. The growth will be driven in part by a pandemic-induced shift away from bricks-and-mortar stores.
  • Major retailers Advance Auto Parts, AutoZone, NAPA Auto Parts, O’Reilly Auto Parts, and Pep Boys offer free curbside pickup for customers who opt to buy online and pick up their parts in the stores, according to Counterman. Advance Auto Parts offers same-day-delivery in several of its markets, an enhancement of the company’s ship-to-home service.

April 23, 2021

  • A rental car shortage combined with rising demand is driving up rental car prices. Many firms quickly sold large portions of their fleet and canceled upcoming orders at the beginning of the pandemic. Demand dropped as much as 90% in the early weeks, forcing companies like Hertz to file for bankruptcy. Car rental firms are now unprepared for a surge in new bookings as travel rebounds. Eighteen of 20 airports in Florida were sold out of rental cars on one weekend in February. Rates in Phoenix approached $200 per day and rental cars on some Hawaiian islands went for $400 to $500 per day, according to Jonathan Weinberg, CEO and founder of car-rental comparison website AutoSlash. People are sitting on huge amounts of unused vacation days, Weinberg said. The weather is warmer and vaccination rates are rising. "Demand will be everywhere all at once."
  • Rules that allocate about $2.8 billion to airports in federal coronavirus stimulus packages require the airports to use $200 million of the funding to provide rent abatement and relief from minimum annual guarantees to airport concessionaires, including car rental companies.
  • Federal stimulus funding also contains $2 billion in grants for “providers of transportation services” (CERTS program). Bus and ferry companies are specified as eligible under the law, but the Departments of Treasury and Transportation can identify additional providers, such as car rental companies, to qualify for the grants as well.
  • Total US car rental revenue is projected by Auto Rental News to have declined 27.4% year over year in 2020. The projected $23.22 billion in revenue for 2020 is the lowest since 2011. Avis Budget Group and Hertz Global Holdings reported a cumulative drop in revenues of over 50% for the second and third quarters.

April 22, 2021

  • Depending on the state or city where they operate, repair shops may experience a rise in demand as driving activity continues to normalize. Since April, vehicle miles traveled has gradually increased as more states fully reopened, according to traffic data from the Federal Highway Administration. In January, the number of vehicle miles traveled was down 11% compared to the same month a year earlier. January traffic volumes were up 31% compared to the lows seen in April during the lockdowns. Aided by wider vaccine distribution, daily new COVID-19 cases have dropped since the spike seen in mid-January, but have been rising in some areas. As of April 19, the 7-day average for daily new cases was about 67,000, and while deaths were declining, hospitalizations were up. Most states have eased or removed restrictions which may improve miles driven.
  • More driving during the summer of 2021 may help boost demand for auto repair shops as motorists get current on routine maintenance, such as oil changes, prior to road trips. Driven in part by optimism brought on by vaccine availability as well as stimulus checks, demand for petroleum products during the summer 2021 driving season is expected to increase 15% over 2020 levels, according to the US Energy Information Administration (EIA). However, highway travel this summer will still be lower than in 2019.
  • COVID-19 and related economic factors are expected to reduce US automotive aftermarket sales by 8.8% in 2020, according to a jointly-prepared forecast by the Auto Care Association (ACA) and the Automotive Aftermarket Suppliers Association (AASA). However, the ACA/AASA forecast projects US automotive aftermarket sales to reach $314 billion in 2021 after sales of $281 billion in 2020. Aftermarket sales are forecast to rise as the number of miles driven continue to increase and as the average age of the US car fleet increases. The average age of the US car fleet hit an all-time high of 11.9 years in 2020, according to IHS Markit. About 25% of cars on US roads are at least 16 years old.
  • Repair shops are taking precautions like disinfecting door handles and steering wheels as well as wearing gloves and masks while in customers’ cars and communicating. Repair shops are reconfiguring seating in their waiting rooms to ensure social distancing. The pandemic has increased the popularity of mobile mechanics that fix cars without physical shops. Mobile repair startup Wrench has seen strong growth as more consumers and fleet owners opt for its touchless, app-scheduled services and quick turnaround times, according to GeekWire.
  • Auto repair shops that have seen business drop off during the pandemic may seek relief via the reauthorization of the Paycheck Protection Program (PPP). The PPP was revived with the December passage of the $900 billion COVID-19 Economic Stimulus Relief Act. The legislation includes $300 billion in funding for Small Business Administration (SBA) loans. The round of PPP passed in December lets eligible borrowers get a second draw loan. It also simplifies loan forgiveness for loans under $150,000 and makes forgiven loans tax deductible. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act which included an additional $7.25 billion for PPP. The PPP is set to wind down on May 31, but funding could run out before then. As of mid-April, the program had $44 billion in funding left, according to the SBA.
  • As consumers have driven less, some are finding problems with their vehicles that were caused by long periods of sitting idle. Mechanics have reported higher instances of calls for dead batteries that need recharging or replacement. Other problems related to parking for long periods include rusty brake rotors and calipers, flat spots on tires, and motor oil contamination caused by condensation. Repair shops may see more calls related to idled vehicles as vaccinations gather pace, new COVID-19 cases drop, and state and local economies continue to return to pre-pandemic ways of life.

April 21, 2021

  • Auto manufacturing firms, which have been forced to slow or stop the production of some models due to a pandemic-related semiconductor shortage, are now facing a natural rubber shortage caused in part by the coronavirus pandemic. Slow shipping has disrupted the delivery of natural rubber, which is a key material in many auto parts and components. Analysts say that reliance on the just-in-time manufacturing process to reduce costs left automakers with limited flexibility when the pandemic hit.
  • Parts shortages are increasing for many firms, including automakers, partly because of pandemic-related congestion in freight transportation networks. A pandemic-driven shift in consumer purchasing habits from experience purchases to consumer goods purchases, particularly for the home, led to a dramatic increase in imports from Asian manufacturing centers, according to The Detroit News. The increase in imports resulted in backups at overwhelmed ports and freight hubs across the US. Businesses of all types are now forced to wait months instead of the usual weeks for deliveries, and no one knows when the situation will be resolved. The Fitch Ratings credit ratings agency said in its ‘Fitch Ratings 2021 Outlook: US Transport’ that the coronavirus pandemic will continue to be an impediment, even though performance will improve in 2021.
  • General Motors expects the semiconductor chip shortage to cut its earnings by $1.5 billion to $2 billion in 2021. Ford Motor said the situation could lower its earnings by $1 billion to $2.5 billion. Honda Motor and Nissan Motor combined expect to sell 250,000 fewer cars through March due to the shortage. Automakers are scrambling to get chips, which have extremely long lead times due to their complexity. Some automakers, like GM and Ford, have confirmed plans to partially build products and store them until chips become available. Others have said they may look to directly purchase the parts from smaller suppliers, cutting out much of the current supply chain.
  • Several industry analysts expect new auto sales to increase about 6.9% in 2021. The National Automobile Dealers Association expects 2021 sales of 15.5 million. Forecasters at car-shopping web site Edmunds also predicted 2021 sales of 15.5 million. Charlie Chesbrough, senior economist for Cox Automotive, said that Cox expects 2021 sales of 15.7 million. US auto sales in 2020 were 14.5 million, down 15% from 2019. It was the fourth-largest annual decline since at least 1980.
  • Fleet sales to rental car companies, corporations, and government agencies are likely to recover more slowly than sales to private individuals, according to Cox Automotive (CA). Fleet sales are not a major concern now for automakers focused on ramping up production to restore dealer inventories for higher-profit sales to consumers, according to CA, but they will become a challenge when inventories are replenished because production must be maintained to keep automakers profitable. “If we don’t see a rebound in 2021, this will be a problem for automakers,” said Zohaib Rahim, economic and industry insights manager at CA. “But right now they’re using all their production to supply dealers.”

April 29, 2021

  • The COVID-19 crises caused the global airline industry to have its worst year on record in 2020, according to the International Air Transport Association (IATA). Worldwide passenger traffic, as measured by revenue passenger kilometers (RPKs), fell 65% in 2020 compared to 2019. International passenger demand was off more than 75%, and domestic demand declined nearly 49%. Traffic in 2021 is expected to reach about 49% of levels seen in 2019, but will be up 26% over 2020. Domestic passenger traffic is projected to recover quicker, returning to 96% of pre-pandemic levels by the second half of 2021. Vaccination and testing regimens, primarily in the US and Europe, are expected to enable some international travel by the second half of 2021, but international traffic will still be only 34% of that seen in 2019. Airline industry revenue is forecast to reach $458 billion in 2021, only 55% of what it was in 2019 but 23% higher than the low point of 2020.
  • Amid weak passenger traffic, demand for used parts is likely to be strongest for cargo conversions of older narrowbody aircraft and for engine work on existing cargo aircraft. When air traffic improves, airlines’ MRO demand will likely favor used parts over new ones in order to reduce costs
  • Industry watchers suggest the COVID-19 pandemic will accelerate MROs digital transformation efforts as they look for ways to increase efficiency and trim costs. Key trends include remote inspection and training that’s enhanced with augmented reality (AR) technology, analytics-based predictive maintenance, and IoT-enabled inventory systems.
  • Prior to the pandemic, global air travel was strong, which kept some older aircraft in service. Now that much of the global fleet is grounded, as many as 4,000 planes may never return to service and instead be dismantled for spare parts over the next three years, according to AeroDynamic Advisory. Teardown and part-out services could be a growth area for MROs, but it may take time to fully materialize. Many widebody aircraft such as the Airbus A380 and older widebodies like the Airbus A340 and Boeing 747 may leave service as airlines focus on smaller, newer, and more efficient aircraft, according to aviation consulting firm IBA. Industry watchers suggest MRO firms that operate large hangars to maintain older widebodies should use the slowdown to retool for work on newer large aircraft like the Boeing 787 and Airbus A350.
  • Some industry watchers suggest that the coronavirus pandemic may cause airlines to rethink the strategy of keeping aircraft on their balance sheets. If airlines instead lease aircraft from manufacturers, it could further the pre-pandemic trend of aircraft OEMs bringing MRO in-house. As the pandemic has worn on, more airlines are leasing aircraft from aircraft leasing firms as they take on long-term liability in exchange for short-term liquidity, according to Aviation Week. However, with air traffic demand down, aircraft lessors may not have new lessees lined up when aircraft come off-lease. Under these market conditions, MROs that offer full-service technical and aircraft storage capabilities may be advantaged because they can store and maintain lessors’ planes until demand picks up.
  • In early October, Boeing released its annual 20-year Boeing Market Outlook (BMO) forecast for the aerospace and defense market. The BMO expects the global market value to be $8.5 trillion over the next decade, down from $8.7 trillion forecast in the 2019 BMO. The global commercial fleet will add about 18,500 aircraft over the next 10 years, or 11% lower than the 2019 projection. Single-aisle aircraft seating 90 or more passengers are expected to account for more than 32,000 of about 43,000 global aircraft deliveries between 2020 and 2039. During that period, Boeing expects the global aviation industry will need 739,000 new maintenance technicians, down 3.9% from the 770,000 projected in 2019.
  • Some MRO firms have fared better than others during the pandemic, often determined by which types of aircraft they service. In the early days of the pandemic, commercial flights were essentially grounded, but those with the means to do so took private planes to quarantine destinations. In some cases, the downtime that followed was used to provide scheduled maintenance, or avionics and interior upgrades. Throughout the pandemic, business and charter aviation have generally enjoyed greater demand than commercial flying, which has helped prop up demand for private jet MRO services. In 2021, total MRO activity it expected to be on par with 2020 levels through the first half of the year, according to Forbes. By the second half of 2021, business jet flights are projected to be within 10% of normal levels while airlines are expected to recover to 25%-50% of typical traffic levels.
  • As airlines await a gradual return of passenger traffic, most are hesitant to make significant changes to their MRO strategies, according to Aviation Week. Large airlines tend to have more in-house MRO operations and many of them have no major plans to shift toward outsourcing. However, as airline traffic recovers, smaller airlines that already depend on outsourced MRO are likely to lean on outsourcing even more to keep up with maintenance as scheduled flights increase.
  • Several major US airlines, including Southwest, American, and United are bringing back pilots and flight crews in anticipation of a rebound in domestic travel demand over the summer, according to The New York Times. By July, the eleven largest US airlines plan to offer nearly as many seats as they did in July 2019, according to aviation data firm Cirium. Vaccinations, pent up demand, and stimulus checks are expected to help boost air travel. The Centers for Disease Control and Prevention (CDC) has said the coronavirus poses little risk for those who have been fully vaccinated. The US domestic airline industry is expected to be fully recovered from the effects of the pandemic by early 2022, according to aviation consulting firm Oliver Wyman.

April 24, 2021

  • All 50 states have either opened coronavirus vaccinations to everyone eligible under US Food and Drug Administration emergency use authorizations, or have announced when they plan to do so. Bars and nightclubs are likely to benefit if social distancing restrictions are eased as vaccination rates increase.
  • Bars and nightclubs that closed during the pandemic will need to proceed carefully when lockdown orders are lifted, as hospitality employers in some jurisdictions must offer certain former employees their jobs back. A new Washington, DC, law, for example, provides eligible non-exempt workers in the hospitality industry who were displaced by COVID-19 the right to be reinstated to their former positions. The law may also apply when there has been a change of ownership. Covered employees can sue their employers for violations of the law on an individual and class basis. Prevailing employees can be awarded back pay, the cost of lost benefits, punitive damages, and attorney’s fees. A sunset provision was included in the law that expires on June 30, 2023.
  • States that have reopened bars experienced a doubling in the rate of coronavirus cases three weeks after the opening of doors, on average, according to a Washington Post analysis. A study that relied heavily on cell phone data found a statistically significant national relationship between foot traffic to bars one week after they reopened and an increase in cases three weeks later.
  • With bars, restaurants, and nightclubs across the US forced to close because of COVID-19, Americans shifted their drinking patterns to off-premise consumption. “That frequent on-premise drinker is 60% more likely to have purchased more alcohol in the past month through delivery or pick up from a store, 80% more likely to have purchased online from a bar or restaurant, and 55% more likely to have increased their online purchases from a brewery, winery or wine club, or distillery,” said Danelle Kosmal, Nielsen’s vice president of beverage alcohol.

April 11, 2021

  • Some industry experts say that pandemic-related growth in the chemical industry is likely to end as the pandemic wanes and spending on manufactured goods slows. Consumer spending is likely to shift to services like dining and cinemas, which were hit hard during the pandemic.
  • Most pharmaceutical companies do not plan to change their manufacturing network despite the possibility that events like the COVID-19 pandemic may disrupt supply channels, according to a GlobalData survey. About 68% of the companies surveyed expect no changes to the finished dose manufacturing sites, while 57% expect no changes in the small molecule API manufacturing site network. Approximately 25% of the companies opined that they will need small molecule API manufacturing sites in more countries, while 7% seek to trim their manufacturing sites to fewer countries. Further, 17% of the companies opined that they need to expand their finished dose manufacturing network to more countries, while 15% opined that they need production sites at fewer countries than that they have today.
  • The basic chemical manufacturing industry could see significant demand if pharmaceutical manufacturing is re-shored in the US from low cost foreign producers like China and India. The US government has invested $354 million in Phlow, a start-up tasked with developing a low-cost production process for generic drugs in the US and reducing reliance on foreign suppliers. The company uses the flow chemistry method to manage the production process and reduce waste, ultimately to make products cheaper and readily available. If successful, Phlow’s strategy could overhaul the drug production and delivery system in the US.
  • The American Chemistry Council’s (ACC) Chemical Activity Barometer (CAB) rose 1.2% in March on a three-month moving average basis following a 1% increase in February. Production-related indicators were positive. Trends in construction-related resins and related performance chemistry were solid and suggest further expansion past the weak February home sales and housing starts. Resins and chemistry used in other durable goods were strong. Plastic resins used in packaging and for consumer and institutional applications were positive. Performance chemistry for industry was mixed. U.S. exports were positive, while equity prices showed further gains. Product and input prices were positive, as were inventory and other supply chain indicators. The barometer rose 5.5% year over year in March.
  • Chemical production decreased 3.8% year over year in February, marking the 21st consecutive month of year-over-year declines, according to the American Chemistry Council. Chemical output fell in all regions as winter storms disrupted chemical production in the Gulf Coast and other parts of the country that rely on raw materials from the region.
  • Employment in the basic chemical manufacturing industry decreased 1.3% year over year in February but was up 0.7% from the low of May 2020, according to the US Bureau of Labor Statistics.
  • Chemical manufacturers are taxed with maintaining operations and production, but with limited contact and staff in many cases. Effective, remote communication is critical as this industry has hazardous operations, environmental impacts, health and safety protocols, and strict product quality requirements. Most chemical manufacturing plants run on shifts, making the continuity of remote communications even more important. Insiders highlight the need to maintain up-to-date and accurate activity and production logs online, allocate time at the end of each shift to document conditions in preparation for the shift handover, and use video conferencing to disseminate information and ease shift handover.
  • The prices that manufacturers charge for their basic chemicals has increased. Prices increased 2.8% for basic inorganic chemicals year over year in March and 23.9% for basic organic chemicals.

April 21, 2021

  • Demand for batteries used in consumer products is likely to increase if an expected post-pandemic surge in consumer spending is realized. Bloomberg Economics estimates that consumers have amassed about $1.7 trillion in savings since the beginning of the pandemic through January. That’s being bolstered by a new round of stimulus payments. Consumer spending during Q2 and Q3 2021 is likely to be the strongest such period in at least 70 years, according to economists at financial services firm Wells Fargo.
  • Input shortages are increasing for many firms partly because of pandemic-related congestion in freight transportation networks. A pandemic-driven shift in consumer purchasing habits from experience purchases to consumer goods purchases, particularly for the home, led to a dramatic increase in imports from Asian manufacturing centers, according to The Detroit News. The increase in imports resulted in backups at overwhelmed ports and freight hubs across the US. Businesses of all types are now forced to wait months instead of the usual weeks for deliveries, and no one knows when the situation will be resolved. The Fitch Ratings credit ratings agency said in its ‘Fitch Ratings 2021 Outlook: US Transport’ that the coronavirus pandemic will continue to be an impediment, even though performance will improve in 2021.
  • Some battery manufacturers are likely to benefit from the one-year extension of the 30% credit for installing electric vehicle chargers that was included in the federal stimulus package passed in December 2020. The credit is capped at $1,000 for home installations and $30,000 for businesses. The stimulus package also extended the 10% credit for two-wheeled plug-in electric vehicles, capped at $2,500 per vehicle.
  • Some communities are developing plans to capitalize on pandemic-driven attempts to re-shore industries that have been identified as essential. Hickory, NC, has allocated $90 million to attract these and other industries as part of a local revitalization plan. Targeted essential industries include battery manufacturing, pharmaceuticals, medical supplies and personal protection equipment, medical devices and testing equipment and products, medical and R&D labs, logistics and transportation parts and equipment, information and data storage, food production, and advanced textiles. Scott Millar, president of the Catawba County, NC, Economic Development Corporation, sees a trend, driven by the pandemic, for site selectors to opt for less densely populated areas instead of large urban metros.

April 26, 2021

  • About 77% of prospective travelers are less or much less concerned about travel safety for the second half of 2021 compared to the same period in 2020, according to a Global Rescue survey of more than 2,000 of its current and former members. The global vaccine rollout is helping boost consumer confidence, according to Global Rescue.
  • The expiration date of the Paycheck Protection Program (PPP) has been pushed back to May 31 and the SBA has been given the authority to continue processing pending applications for another 30 days after that. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible. The measure passed the US House of Representatives in mid-March and moved to the Senate.
  • The latest round of Paycheck Protection Program (PPP) funding increases loan amounts available to food service providers including bed and breakfasts. These providers are eligible for loans amounting to 3.5 times their payroll instead of the normal 2.5 times. The $900 billion coronavirus relief package signed into law in late December 2020 includes $248 billion for the Small Business Administration, the agency overseeing the PPP.
  • Tourism will not fully rebound in New York City (NYC) for at least four years, according to NYC & Company, the city’s tourism promotion agency. Bed and breakfast inns are likely to be among the businesses that are negatively impacted. NYC & Company counts all overnight guests and anyone who travels from more than 50 miles away as a visitor. Its new forecast calls for 38.2 million visitors in 2021, rising to 69 million by 2024. NYC drew a record 66.6 million visitors in 2019.
  • Many bed and breakfast inns have adopted the American Hotel and Lodging Association’s Safe Stay protocols and tailored them to small accommodations. Touchless check-in, in which guests are handed a sealed container with their room key, single-use bath amenities, and any other essentials that might otherwise be left in the room, is widely used. In-room nonessentials, such as pillows and shams, bed throws, and decorative figurines have been removed. "...owners are sacrificing some of their inns’ much-loved character to keep people safe," says Heather Turner, marketing director for the Association of Lodging Professionals.

May 2, 2021

  • Two measures released in late April show craft beer sales rebounding to pre-pandemic levels. Craft beer pushed through the 50 mark on the National Beer Wholesaler Association’s (NBWA) beer purchasers index in April after four straight months below. An index of 50 points or more indicates that purchasing in a segment is expanding, while a reading below 50 indicates contraction. BeerBoard, which measures draft sales in the on-premise channel, reports craft increasing its share of the draft beer business relative to domestics and imports by a full percentage point during the weekend of April 22-25 as compared to two weekends in late March and early April.
  • Many analysts say that beer distributors should prepare for an upcoming pandemic-related spending shift that is likely to boost on-site sales. Consumers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time. The bounce back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues.
  • Quick adjustments have been a key element of the successful response to the coronavirus pandemic, according to Lester Jones, chief economist for the National Beer Wholesalers Association. The market “kind of worked itself out” in response to the pandemic, Jones said. Home consumption increased where the restaurants, bar, and entertainment venue channels of trade left off. The beer industry managed to get the beer originally slated for on-side consumption in kegs repackaged in aluminum cans for at-home consumption. Cans of beer, typically 60% of the industry’s production, rose to 66-67%. Keg or draft beer sales, typically about 10% of the US beer market, decreased 50% during 2020. The total beer supply increased just 0.1% year over year in 2020. A lot of product was spoiled and destroyed in March and April 2020, the earliest days of the pandemic. The association has not yet done an accounting of the volume involved.
  • Consumers increasingly bought 12-packs of beer in 2020, according to beverage alcohol trade news site SevenFifty Daily. Twelve-packs are the most popular beer size sold on ecommerce platform Drizly, accounting for 42% of overall beer sales in 2020.
  • Demand for beverages of all kinds is rising during the coronavirus pandemic, but beer distributors may struggle to maintain adequate supply due to an aluminum can shortage. "Aluminum cans are in very tight supply with so many people buying more multi-pack products to consume at home," Coca-Cola spokesperson Ann Moore said. Can manufacturers have announced plans to build at least three new factories within the next 18 months. Can maker Ball Corp. will open two new US plants and is adding two new production lines to existing US facilities.
  • The National Beer Wholesalers Association’s Beer Purchasers’ Index (BPI) decreased to 63 in March from 70 in February. The BPI surveys distributors’ monthly buying behavior. An index of 50 points or more indicates that purchasing in a segment is expanding, while a reading below 50 indicates contraction. The trend continues to show a slow return to the long-running average total BPI of 57. The "at-risk inventory" measure (inventory at risk of going out of code in the next 30 days) decreased to 37 in March from 42 in February.

April 19, 2021

  • Legislation that would make permanent a pandemic-related waiver allowing Texas restaurants to sell beer, wine, and mixed drinks to-go advanced to the state Senate. Supporters say that the legislation would safeguard a source of revenue that has been critical to the survival of many restaurants throughout the pandemic. Sales at beer, wine, and liquor stores sales may be negatively impacted. Industry experts say that the legislation, if signed into law, may prompt similar efforts in other states.
  • Many analysts say that beer, wine, and liquor stores should prepare for an upcoming pandemic-related spending shift that is increasingly referred to as revenge shopping. Consumers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time. The bounce back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues. A significant portion of alcohol sales may shift from beer, wine, and liquor stores back to bars, nightclubs, and restaurants as a result.
  • Many distributors have made high-priced wines that are typically sold only to restaurants available to retailers at discounted prices, according to The Washington Post. Distributors typically make one yearly purchase of several pallets of wine (a pallet is 56 cases), then make deliveries throughout the year to one or more restaurants as needed. Distributors, stuck with these wines when restaurants closed, made them available at a heavy discount to retailers, as larger distributors tend to want to move that wine even at deep discounts, and smaller distributors may have an urgent need to move product. “There are some smoking-good deals for consumers, if they know what to look for,” says Jeff Leiker, a buyer for Tower Wine & Spirits in Atlanta.
  • Legislation under consideration in Alabama would allow home delivery of alcohol. The bill would allow for delivery of distilled spirits in original containers from package stores, as well as from bars and restaurants with a meal purchase, according to the Distilled Spirits Council of the United States. The bill has passed the state Senate and is now in the House of Representatives. Home delivery legislation is under consideration in several states, including Florida, Mississippi, and Oklahoma.
  • Global e-commerce alcohol sales are estimated to have increased more than 40% during the coronavirus pandemic, according to IWSR Drinks Market Analysis. Experts expect the pandemic to continue impacting on-premise sales for at least the first half of 2021. Alternatives to on-premise consumption — especially alcohol delivery, DTC and off-premise sales — are likely to carry momentum well into the year.
  • Beer, wine, and liquor stores are likely to benefit from the addition of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) to the $900 billion coronavirus relief package passed by the US Congress on December 22, 2000. The CBMTRA will make existing federal excise tax rates for small and independent breweries permanent. The current Federal Excise Tax rates for small and independent breweries, which were set to expire on December 31, 2020, could have increased as much as 100%. Sales may have declined if higher tax rates were passed on to consumers.
  • American adults say they’re drinking 14% more often during the pandemic, according to a report in the journal, JAMA Network Open. The World Health Organization (WHO) has advised limiting access to alcohol during the pandemic. “Alcohol compromises the body’s immune system and increases the risk of adverse health outcomes,” the WHO stated. “Therefore, people should minimize their alcohol consumption at any time, and particularly during the COVID-19 pandemic.”
  • Most liquor stores have been allowed to remain open during the coronavirus pandemic. Beer, wine, and liquor stores technically fall under the “food and agriculture” category of establishments, like grocery stores, which are considered essential. Some states, such as Maryland and Texas, allow alcohol deliveries to customers.

May 2, 2021

  • Biotechnology research firms have begun developing vaccines that work against coronavirus variants. Dr. Noubar Afeyan, co-founder and chairman of Moderna, says that it is more likely than not that even those who are vaccinated will need some form of a booster to make antibodies against variants. Afeyan foresees a booster that would be a combination of half a dose of the existing vaccine and half a dose of a new variant vaccine.
  • Researchers at the Georgia Institute of Technology and Emory University are developing inhaled treatments that may be able to deliver a coronavirus vaccine. Treatments are delivered to the lungs via a nebulizer, which could make it simple for patients to administer at home. The researchers say that the treatments can be quickly modified to be effective against variants of contagions, including the new variants of the coronavirus that have begun to circulate.
  • Two COVID-19 vaccines developed by US firms have been found to be over 95% effective, a standard no other country’s vaccines have yet met in clinical trials. The US retains a dominant position in research, development, and commercialization, accounting for almost half of all biotech patents filed from 1999 to 2013, according to the Information Technology & Innovation Foundation.
  • There has been a massive pivot of biotechnology companies to pursue infectious disease research, according to Dr. Michelle McMurry-Heath, PhD, president and CEO of BIO. The complexity of COVID-19 disease has allowed a role for many types of drug mechanisms to be effective. Companies that pivoted to infectious disease work may have opportunities to pursue new classes of therapeutics and areas of research. There are 191 COVID-19 vaccine candidates and over 800 clinical trials for various treatments and vaccines, McMurry-Heath said, many under development by companies with no prior experience in the infectious disease space.
  • Industry experts say that a key challenge in vaccine development is determining which vaccine candidates should move forward through the costly clinical trial process. Running even a small study to test safety and dosing is beyond the reach of most academic groups, and smaller teams face an uphill struggle to get their candidates noticed. Scientists acknowledge that it would be a waste of resources to take every candidate to clinical trials. But they argue that it’s essential to have a diverse selection of COVID-19 vaccines in development.

May 2, 2021

  • Blood banks are starting to move away from collecting plasma from COVID-19 survivors as vaccination rates increase, according to the Red Cross. Clinical trials are starting to show that plasma doesn't help much with COVID-19, and banks say they already have plenty of it.
  • The Food and Drug Administration (FDA) tightened its requirements for donors and recipients of COVID-19 convalescent plasma after reviewing findings from clinical trials. Some patients did not benefit from receiving convalescent plasma, according to the FDA review. Others only benefitted during specific circumstances. Those who received a COVID-19 vaccine can donate plasma if they have proof of a positive COVID-19 test result, received the vaccine after diagnosis, and are within six months after symptoms resolved, according to the updated guidance.
  • Blood banks are seen as a key player in a proposed global surveillance system that would check blood samples for the presence of antibodies to hundreds of viruses. The system would provide detailed, real-time information on how many people have been infected during a pandemic and how their bodies responded. It may also function as an advanced warning system that shows when large numbers of people start acquiring immunity to a particular kind of virus. Operators of the system would require agreements with blood banks and other sources of blood, and a system for acquiring consent from patients and donors.
  • Some blood banks are offering a free COVID-19 antibody test with any successful blood donation. The test can indicate whether someone was exposed to the coronavirus. Vitalant, the largest independent nonprofit blood collector in the US, began testing all blood donations for antibodies on June 1, 2020. Those who donate blood at Vitalant facilities will be able to see positive or negative test results about two weeks after completing successful blood donations by logging into private online donor accounts. The Vitalant antibody test, authorized by the US Food and Drug Administration, will indicate if donors’ immune systems have produced antibodies to the virus, regardless of whether they showed symptoms.
  • Red Cross is testing all blood, platelet, and plasma donations for COVID-19 antibodies. Red Cross said that it's using an antibody test that the US Food and Drug Administration has authorized for emergency use, and results will be available to donors within seven to 10 days in the Red Cross Blood Donor App or donor portal.

April 10, 2021

  • The number of first-time boat buyers increased 10% year over year in 2020, according to the National Marine Manufacturers Association (NMMA). It was the first time in over 10 years the number of first-time buyers increased. The average first-time-boat-buyer's age has decreased for the first time in 20 years, according to the NMMA.
  • New powerboat shipments decreased 15% year over year in 2020, according to The National Marine Manufacturers Association (NMMA). Shipments of personal watercraft, outboard boats, jet boats, and sterndrive boats increased 17% month over month in December, however.
  • “Boat builders are shipping approximately 20,000 new boats monthly and operating at 13% above normal levels to restock anemic inventories ahead of peak selling season,” Vicky Yu, NMMA's Director of Business Intelligence, said in early March.
  • Retail unit sales of new powerboats increased 12% year over year in 2020, according to the NMMA. More than 310,000 new powerboats were sold in 2020, levels the recreational boating industry has not seen since before the Great Recession in 2008.
  • Boat building growth is expected to be constrained through the remainder of Q1 2021, turn up in mid-2021, and hold steady through 2023, according to ITR Economics.

April 10, 2021

  • Many boat retailers are still fulfilling their pandemic-induced backlog of orders in early 2021, according to business news channel CNBC. “There is not one new boat on the property that is not sold," said Jack White, of 3A Marine Service in Massachusetts. "We have a waiting list of people waiting for boats and have people who have already placed orders for their 2022s. They don't want to be left out.”
  • Social distancing measures are expected to stay in place for the near future throughout the country, so people are still purchasing boats as a way to safely enjoy the outdoors, especially in the more temperate months. Health officials say that they are increasingly worried that more COVID-19 variants will emerge and reduce the effectiveness of vaccines. As many as 85% of Americans must become immune to COVID-19 – either by recovering from the disease or by getting vaccinated – to halt the virus’s spread, according to some epidemiological estimates.
  • The Orlando Boat Show, held in early March, had its highest attendance in a decade and topped 2019 attendance by 66%. (COVID scuttled the 2020 show.) It was the first indoor major-market show since the pandemic began in March 2020. First-day attendance at the Bonita Springs Boat Show, also held in Florida in early March, doubled that of the prior show. “While some dealers reduced space because of inventory issues, the show was still big, loaded with boats and impressive," said John Good, executive director of the Southwest Florida Marine Industries Association.
  • Retail unit sales of new powerboats increased 12% year over year in 2020, according to The National Marine Manufacturers Association. More than 310,000 new powerboats were sold in 2020, levels the recreational boating industry has not seen since before the Great Recession in 2008.

May 2, 2021

  • About 73% of consumers who typically visited shopping centers before the pandemic intend to return again after they have been vaccinated, according to a global survey by IBM's Institute for Business Value. Retailers should look to in-store promotions, which ranked as the most compelling reason for consumers to shop in a physical store, especially for Gen X (54%) and those over 55 (52%), according to the survey.
  • Many analysts expect a wave of discretionary expenditures on items like books when the pandemic wanes. Bloomberg Economics estimates that consumers have amassed about $1.7 trillion in savings since the beginning of the pandemic through January. That’s being bolstered by a new round of stimulus payments. Consumer spending during Q2 and Q3 2021 is likely to be the strongest such period in at least 70 years with a rebound in services leading the way, according to economists at financial services firm Wells Fargo.
  • Cookbook sales increased 17% year over year in 2020, according to NPD BookScan, which tracks about 85% of US book sales. Experts attribute the growth to pandemic-related lockdowns that boosted home cooking. Some of the most popular guides were written by influencers on multiple platforms. “Half Baked Harvest Super Simple” by Tieghan Gerard, the Colorado food blogger whose Instagram account has nearly three million followers, reached number 7 on the BookScan list. “Salt Fat Acid Heat” by California chef and New York Times contributor Samin Nosrat became a Netflix show and was the fifth-best-selling cookbook on The New York Times best-seller list.
  • The two largest US printing companies, Quad and LSC Communications, have been under intense financial strain, according to The New York Times, and their condition has weakened during the pandemic. LSC declared bankruptcy in April 2020. Quad completed the divestiture of its book manufacturing platform in November 2020. Some publishers are having difficulty bringing books to market on schedule. “The infinite printer capacity hasn’t been there for a while, now enter COVID and a huge surge in demand, and you have an even more complex situation,” said Sue Malone-Barber, senior vice president and director of Publishing Operations for Penguin Random House.
  • Some book publishers are racing to publish accounts of the coronavirus outbreak. Published works range from reported narratives about the science of pandemics and autobiographical accounts of being quarantined through spiritual guides on coping with grief and loss to a book about the ethical and philosophical quandaries raised by the pandemic. Upcoming works include examinations of the economic consequences of the pandemic, studies of the coronavirus, and histories of other pandemics.

April 19, 2021

  • Unit sales of print books increased 23.9% year to date through March 20 on a year-over-year basis at outlets that report to NPD BookScan. Young adult fiction sales increased 54.1% during the period, juvenile fiction sales increased 33.4%, and adult fiction sales increased 30%.
  • Book store sales decreased 28.3% year over year in 2020, according to the US Census Bureau. Book store sales were lower despite an 8.2% year-over-year increase in print book unit sales, suggesting that many purchases moved online. Book store sales decreases generally eased as 2020 moved toward the end of the year: December sales decreased 15.2% following drops of 21.5% in November and 28.9% in October.
  • Print book sales rose in 2020 to the highest level since 2010, according to the NPD Bookscan, which tracks sales through about 80% of the market. Unit-sales volume for print books rose 8.2% year over year in 2020 to reach 751 million units. Every category posted gains, led by juvenile fiction print books, which saw sales rise 11%. Adult non-fiction print books, the largest category of books in the US by both volume and sales revenue, increased 4.8%, or 14 million units. Juvenile non-fiction grew 23%, also a gain of 14 million units.
  • It may take up to five years for retailers to absorb and integrate the acceleration of e-commerce into a new operating model that matches pre-pandemic retail profitability, according to management consulting firm Kearney. Many brick-and-mortar retailers layered more expensive e-commerce offerings and new customer service options, from curbside pickup to home delivery, on top of normal business operations, putting pressure on their already-stressed profit margins. Firms must now create sustainable business and operational models that can hold or increase margins once COVID-driven artificial demand vanishes, as the cost of added digital platforms will not vanish.
  • Sales at sporting goods, hobby, musical instrument, and book stores increased 23.5% month over month on an adjusted basis and 80% year over year on an unadjusted basis in March. Sales increased 37.2% year over year on an unadjusted basis for the first three months of 2021.
  • Book store owners' responses to the COVID-19 outbreak varied based on the products and services they offer and on orders or recommendations made by government officials and health experts. Some stores closed completely due to mandates by state or local officials or to declining sales as customers avoided gathering places. Others closed bricks-and-mortar locations but kept e-commerce sites open. In some markets, home delivery and curbside pick-up replaced in-store browsing. Videoconferencing replaced in-store book groups, according to the New York Times.

April 10, 2021

  • Some bowling center owners are opting to remain closed in areas where low capacity limits are in place. Sam Amenta, the owner of Gardena Bowl in California, said that it doesn't make sense to reopen at the 25% capacity limit because of the size of the facility. "With only 16 lanes, that's going to basically be a one person per lane. Our pool area has nine pool tables, that's probably going to be limited to about 12 people," Amenta said. "So, at those numbers, we're just not going to open. It's just not going to be feasible enough to get this building running." Amenta said he doesn't have plans to welcome guests back until he's able to operate at 50% capacity
  • Guidance released by the Centers for Disease Control and Prevention says that vaccinated Americans should still avoid medium- and large-sized in-person gatherings, and they should also continue wearing face masks and social distancing when in public. The CDC says that a person is considered fully vaccinated two weeks after receiving the last required dose of vaccine.
  • As nonessential businesses, bowling centers across the country were forced to close to help prevent the spread of COVID-19, a measure that has been especially difficult because the bowling market was vulnerable and contracting even before the pandemic.
  • The Bowling Proprietors Association of America advised operators to expect business to be at between 20% and 25% of pre-pandemic volume upon reopening and to offer a condensed menu in on-site restaurants and snack bars.

May 2, 2021

  • Craft breweries produced 23.1 million barrels of beer in 2020, about 9% less than in 2019, while total sales decreased 22%, to $22.2 billion, according to the Brewers Association (BA). It was the first production decline since the BA started tracking sale and volume numbers in the 1980s.
  • Brewery closures totaled 346 in 2020, on par with the previous year, but 716 new breweries opened. There is now an all-time high of 8,764 breweries operating in the US.
  • The coronavirus pandemic is driving consumer interest in buying beer directly from brewers, according to the Direct-to-Consumer Beer Shipping Report from Sovos ShipCompliant and the Brewers Association. About 84% of regular craft beer drinkers — defined as those who drink craft beer at least once per month — say that they want to be able to legally purchase beer via direct-to-consumer (DtC) shipping to their homes. About 73% of regular craft beer drinkers surveyed for the report said that the pandemic has increased their interest in purchasing craft beer via DtC shipping.
  • Some breweries and brew pubs are increasing investment in outdoor drinking areas as the weather gets warmer. The move may be influenced by experts' suggestions that pandemic-induced restrictions on indoor seating, which spurred the creation of minimal outdoor seating spaces as a matter of survival, may have normalized the practice of drinking beer outdoors. Crowded indoor spaces would take some getting used to again, and the new normal may see more consumers seeking outdoor dining and drinking options. Some cities have plans to help businesses maintain al fresco drinking and dining as a safe option. Solutions range from weatherized outdoor spaces, free tent and heater permits, and government-backed financial support.
  • Nonalcoholic beer sales increased 38% year over year in 2020 with $188 million in sales, according to market research company IRI. Industry experts cite increasing interest in wellness-related products and increasing quality and variety of nonalcoholic beers as key drivers of sales growth. Companies ranging from craft operations like Athletic Brewing to industry giants like Heineken are offering alcohol-free IPAs, coffee stouts, Oktoberfests, and more.
  • Breweries are likely to benefit from the addition of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) to the $900 billion coronavirus relief package signed into law in late December 2020. The CBMTRA will make existing federal excise tax rates for small and independent breweries permanent. The current Federal Excise Tax rates for small and independent breweries, which were set to expire on December 31, 2020, could have increased as much as 100%.
  • Breweries are rapidly shifting their business models, with delivery, either by the brewery or a third party, seeing the largest increase, according to BA's most recent survey of brewers.

April 9, 2021

  • The National Association of Homebuilders’ Remodeling Market Index (RMI), an indicator of demand for building inspections, posted a reading of 86 in Q1, up from 79 in Q4 2020. An index number above 50 indicates that a higher share view conditions as good than poor. All components and subcomponents of the RMI were 82 or above. The Current Conditions Index averaged 89, up from 84 in Q4 2020, with large remodeling projects ($50,000 or more) yielding a reading of 85, moderately-sized remodeling projects (at least $20,000 but less than $50,000) at 90 and small remodeling projects (under $20,000) with a reading of 92. These readings were all up substantially year-over-year, indicating strength for remodeling across all types of projects. The Future Indicator Index averaged 84,up from 72 in Q4 2020, with the rate at which leads and inquiries are coming in at 86 and the backlog of remodeling jobs at 82.
  • Online real estate marketplace Zillow expects home sales, a driver of demand for building inspection services, to rise 21.9% year over year in 2021, the largest one-year gain since the early 1980s. The 6.9 million existing home sales expected by Zillow would be the most since 2005.
  • Industry experts say that the digitization of licensing, permitting and inspection services, which account for a substantial percentage of state budgets, represents the next phase of digital transformation in the public sector, and the coronavirus outbreak is accelerating the process. The city of Oakland, CA, for example, has launched a new application that allows people to schedule building inspections online. The Oakland Building Inspection Request application is expected to make it easier to schedule inspections and help the Planning and Building Department operate more efficiently. Customers using the app will get notified on the day of the inspection of the window of time the inspector will arrive, reducing long wait times for customers.
  • The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, decreased to 110.3 in February from 122.8 in January, according to the National Association of Realtors. An index of 100 is equal to the level of contract activity in 2001. Contract signings decreased 0.5% year-over-year in February.
  • Sales of previously-owned homes, a driver of demand for paint and wallpaper increased 9.1% year over year but decreased 6.6% month over month in February, according to the National Association of Realtors. The median existing-home price for all housing types in January was $313,000, up 15.8% year over year, with all regions posting double-digit price gains. January's national price increase marks 108 straight months of year-over-year gains. Housing inventory remained at a record-low of 1.03 million units at the end of February, down by 29.5% year-over-year – a record decline. Properties typically sold in 20 days, also a record low.
  • The number of building permits issued increased 10.4% month over month and 22.5% year over year in January. Housing starts decreased 6% month over month and 2.3% year over year in January. Housing completions decreased 2.3% month over month but increased 2.4% year over year in January.
  • The COVID-19 pandemic and related recommendations for social distancing have altered the way building inspection service providers operate. Home sellers became reluctant to allow strangers, including inspectors, into their homes for two to three hours, while stay-at-home orders in many states complicated the ability to perform physical inspections, which were often part of contractual obligations with deadlines.

May 2, 2021

  • The Associated Builders and Contractors (ABC) trade association expects a "... tsunami of economic and employment growth across America." The US may end up growing faster than China this year due to federal stimulus spending, according to ABC Chief Economist Anirban Basu. "Much of the stimulus to come will directly affect construction. While any infrastructure stimulus should be geared toward projects generating the highest rates of return and open to bids by all competent contractors, the sheer volume of money flowing into the economy is set to create massive forward momentum for the balance of 2021 and likely through 2022," Basu added.
  • Pandemic-induced rapid product pricing and production changes, coupled with somewhat diminishing ability to use historical trends in predicting seasonal or cyclical market direction, are driving the need for closer partnering with suppliers and customers to ensure adequate inventory, according to Steve Hansen of Professional Builders Supply. Purchasing strategies that feature collaboration and better communication with customers and suppliers can maximize product availability and margins throughout the entire supply chain from mills to builders, Hansen said.
  • Lumber prices hit $1,502 per thousand board feet on April 30, according to Business Insider. Lumber began 2020 at $407 per thousand board feet in January, fell to a low of $259 on April 1, then surged to a record of $941 on September 7. The price retreated to $496 on October 29 before beginning a steady rise that continued into 2021.
  • Pandemic-induced material shortages will continue into 2021, according to the Q4 2020 US Chamber of Commerce Commercial Construction Index. About 83% of construction contractors surveyed by the Chamber of commerce are experiencing product delays and 71% are struggling to meet schedule requirements. Some 58% are putting in higher bids on projects and 39% are turning down work opportunities.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, increased to 83 in April from 82 in March. The Index was at 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. The outlook for home sales in six months decreased to 81 from 83 in March, but was up from 80 in February, The buyer traffic component of the Index increased to 75 in April from  72 in March.
  • Construction industry experts expect a surge in commercial renovations in 2021 due to tax changes included in the 2020 CARES Act. Facility upgrades qualified for tax deductions before the passage of the CARES Act, but to reap the full benefits, facility managers would have to claim a 2.5% write-off each year for up to 39 years. With the passing of the 2020 CARES Act, facility managers can write off 100% of qualifying facility improvement costs in the first year. A few improvements that qualify for the tax deduction are the installation of airflow management accessories, HVAC devices, and physical security and access control solutions.

April 28, 2021

  • Business and professional associations undertook risk assessments to determine the best ways to provide services during the coronavirus pandemic. Some associations have extended membership terms at no cost to support and retain members. Industry experts say that associations whose normal activities have been suspended may still be able to support members by helping with processes like applying for economic injury and disaster loans or providing up-to-date information on coronavirus response measures.
  • Business and professional associations can apply for loans through the emergency Economic Injury Disaster Loan (EIDL) program. Loan funds can be used for working capital and normal operating expenses. The EIDL Advance program - which offered grants for eligible businesses and nonprofits for payroll, rent, mortgage payments, or repaying obligations – was shut down in July after dispersing its total allotment of $20 billion. However, in late December the COVID-19 Targeted EIDL Advance program was authorized as part of the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. Targeted EIDL Advance offers advance funds of up to $10,000 for applicants in low-income communities.
  • The American Society of Association Executives (ASAE) has asked lawmakers for additional assistance for associations that suffered financial losses when events and meetings were cancelled, access to Small Business Administration loans to maintain payroll, and the creation of a federally-backed pandemic risk insurance program. Under the CARES Act, 501(c)(6) groups could only receive Payroll Protection Program (PPP) loans if lobbying accounted for less than 10% of their activities. A second round of stimulus relief was passed in December. The $900 billion spending bill included more than $284 billion for first and second forgivable Paycheck Protection Program (PPP) loans, and increased the threshold for lobbying activities from 10% to 15%. However, only organizations with less than $1 million in lobbying spending are eligible for PPP loans. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan (ARP) Act which included an additional $7.25 billion for PPP. The PPP is set to wind down on May 31, but funding could run out before then. The PPP funding is available to nonprofit entities that employ 300 or fewer employees per physical location. The ARP’s provisions regarding lobbying are the same as the ones in the prior stimulus package passed in late December. As of mid-April, the PPP had $44 billion in funding left, according to the SBA.
  • With more widespread availability of vaccines comes the potential of resuming in-person events. In March, the ASAE announced its 2021 Annual Meeting & Exposition will be held virtually in August. However, the virtual event will be supplemented by smaller, regional hub meetings that can be held safely. On April 26, the 7-day average for daily new cases was about 55,000 – still high, but more than four times lower than the highs seen in January. Hospitalizations were up but deaths were falling. As of April 27, all but seven states were mostly open, according to The New York Times.
  • Business associations have been urging lawmakers to pass legislation to protect businesses from lawsuits related to COVID-19. Most of US states either have passed some protections – primarily for the healthcare industry – or have legislation pending. Legal experts suggest a compromise on the federal level is necessary to strike a balance between protections for workers and businesses. A patchwork of state regulations could complicate compliance for businesses operating in numerous states. The stimulus package passed in December did not include liability protections, nor does The American Rescue Plan Act which was signed by President Biden in March 2021. Given the issue’s lack of traction on the federal level, proponents of COVID-19 immunity provisions are expected to focus their efforts on the states.

April 19, 2021

  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. As of April 4, the SBA had disbursed $746 billion of the $813.5 billion total appropriated for the PPP. Some $60 billion, or 21% of Round Three PPP funding, remains available. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Pandemic-induced stress resulted in higher consumption of sugar and fatty foods, particularly among women, according to a study published in the journal Appetite. "These changes are likely due to the circumstances surrounding COVID-19, including stay-at-home orders, decreased job security, anxiety about exposure to the virus, and food shortages," researchers noted in the study. Americans have been indulging more during the pandemic. A separate study conducted by OnePoll that asked 2,000 Americans about their eating habits found that three-quarters were eating higher-calorie foods like ice cream and candy while in isolation.
  • State coronavirus vaccine distribution plans reviewed by Reuters news service showed broad discrepancies regarding who would be considered essential, with some states clearly outlining specific worker groups and others not providing any clarity. Many states have so far followed federal guidance to give meat and food processing industry workers space in the line, but some are slowly moving away from it, according to Mark Lauritsen, who advocates on behalf of about 250,000 meatpacking and food processing workers under the United Food and Commercial Workers union. Sources that Reuters spoke to said that it is not clear whether the federal government could overwrite state distribution plans.
  • About 64% of respondents to a FMCG Gurus survey said that their confectionery product buying habits will change as a result of COVID-19. About 51% of consumers say they will trade-up on confectionery to compensate for reduced expenditure elsewhere. 52% say they will seek confectionery products suitable for "big nights in." About 79% have purchased more comfort food such as ice cream and confectionery, 40% said they purchased more chocolate as a result of COVID-19, and 28% said they purchased more sugar confectionery.
  • Industry experts in supply chain management are offering options for dealing with input shortages during the coronavirus pandemic. A common recommendation is to ask suppliers to do a double production run of inputs so the next run can wait twice as long. Manufacturers may also offer early payment, so the supplier can have more cash on hand during these uncertain times. Another option is having a supplier produce only primary SKUs, as retailers are likely to be understanding if you’re only able to supply those items.

April 16, 2021

  • Industry analysts say that cannabis sales are likely to have increased following the third round of federal stimulus payments that began in March. The previous two rounds of stimulus payments, in April and December 2020, contributed to higher spending on cannabis, according to Marijuana Business Daily.
  • Global sales of cannabis increased 48% year over year to nearly $21.3 billion in 2020 despite the coronavirus pandemic outbreak, according to cannabis data analytics firm BDSA. US sales increased 46% year-over-year. The US cannabis industry added an estimated 77,300 jobs in 2020 — more than twice the number it added throughout 2019, according to Leafly's 2021 jobs report.
  • Marijuana industry experts say that Democratic control of both houses of the US Congress may result in some form of federal cannabis legalization in 2021. The US House of Representatives has passed a comprehensive decriminalization package, Senate majority leader Chuck Schumer is a legalization supporter, and President Biden campaigned on decriminalizing the drug and reducing prison populations. Maritza Perez, director of national affairs for the Drug Policy Alliance, said that comprehensive cannabis legislation may fail to overcome Republican filibusters or resistance by moderate Democrats and Democrats representing swing states, however. Action on the matter is initially more likely to come in the form of piecemeal legislation or executive actions from Biden’s administration, Perez said.
  • The Office of the Comptroller of the Currency has finalized a rule that prohibits the largest US banks from refusing to lend to entire business sectors. The proposal follows years of complaints by Republican lawmakers about what they say are increasingly partisan and discriminatory lending practices by big banks that are under pressure from investors and staff to curb lending to industries including fossil-fuel companies, private prisons, and firearms makers. The rule, if approved, would apply to banks that may exert significant pricing power or influence over sectors of the national economy.
  • The technology and automation that cannabis cultivators relied on to cut costs before the COVID-19 pandemic is expected to be key to surviving the following economic downturn. Producers that invested in automated systems for watering; fertilizing; controlling lighting, irrigation, and climate; and rolling and filling joints were able to reduce labor costs. Successful commercial growers already ran clean, hospital-grade operations pre-COVID-19.
  • California is offering marijuana companies a mix of tax extensions, relief, and deferrals to help firms maintain operations and meet payroll, according to Marijuana News. Many businesses were denied loans in the first round of stimulus funding, according to Marijuana Daily. Some industry leaders argue that hemp businesses should be entitled to COVID-19 stimulus relief because hemp is not a controlled substance.
  • Most states that allow cannabis production have classified the industry as an essential business. Despite maintaining the ability to stay open, several large cannabis companies, including Acreage Holdings and 4Front Ventures, scaled back in anticipation of an economic downturn.

April 22, 2021

  • Depending on the state or city where they operate, car washes may experience a rise in demand as driving activity continues to normalize. Since April, vehicle miles traveled has gradually increased as more states fully reopened, according to traffic data from the Federal Highway Administration. In January, the number of vehicle miles traveled was down 11% compared to the same month a year earlier. January traffic volumes were up 31% compared to the lows seen in April during the lockdowns. Aided by wider vaccine distribution, daily new COVID-19 cases have dropped since the spike seen in mid-January, but have been rising in some areas. As of April 19, the 7-day average for daily new cases was about 67,000, and while deaths were declining, hospitalizations were up. Most states have eased or removed restrictions which may improve miles driven.
  • Car washes may make several changes to ensure operations are safe for employees and customers. Steps may include reducing waiting room occupancy, outfitting employees with personal protective equipment (PPE), installing plexiglass shields around cashier stations, limiting washes to vehicle exterior, restricting employee and customer interaction, and eliminating manual prep and post-wash wipe down. Other strategies include eliminating cash transactions, allowing customers to position vehicles on conveyors and remain in their cars during washes, and employee temperature checks.
  • Car wash firms that offer unlimited wash subscriptions have fared better during the pandemic than car washes that don’t offer subscriptions, according to data released in November by car wash software and equipment firm DRB Systems. During the first wave of the pandemic (March 22, 2020 to May 18, 2020), car washes that offer subscription plans saw a 32% drop in revenue compared the pre-pandemic period (Jan 1, 2020 to March 21, 2020). Car wash firms that did not offer unlimited washing plan experienced a 66% decline in sales during the first wave of COVID-19. Car washes have long offered subscriptions to help smooth out revenue over the course of the year, and have also helped during economic downturns. Subscriptions are also completely touchless. Customers typically sign up via app or website and enter their license plate number and payment info. When the customer visits the carwash, an automated POS system reads the license number and processes payment with zero human contact.
  • A chain of car washes in Southern California offers a disinfecting fog service free of charge for customers. The fog – which is applied inside the vehicle after a full-service wash – is rated by the EPA to kill bacteria, fungi, and viruses – including the coronavirus. More car washes may add disinfecting services if customers begin to view it as an industry norm.
  • Mergers and acquisitions (M&A) activity in the car wash industry is usually robust during periods of economic growth. The US economy was fundamentally healthy prior to the COVID-19 crisis, which put a general damper on most M&A activity. Car wash industry watchers believe car wash M&A deals are likely to resume once the level of economic uncertainty abates.
  • The COVID-19 outbreak slowed the circulation of coins in the US economy which created problems for several coin-dependent business, including coin-operated car washes. During the quarantine, not only did retail activity drop but consumers stopped cashing in their coins for paper notes. The US Mint also slowed coin production in the early days of the pandemic to protect workers. Consumers’ shifting to contactless payment options also reduced coin circulation. However, the coin shortage has improved as the US Mint increased coin production, according to American Banker. The Mint produced 14.8 billion coins in 2020, up 26% from 2019.
  • Some car washes may tweak their digital marketing strategies to them optimize business opportunities. Because consumers are spending more time online during the pandemic, it’s even more important for car wash operators to ensure they’re online listings are up-to-date, according to Carwash.com. Tools like Google My Business make it simple to update business hours, locations, photos, and promotions, and monitor and respond to customer reviews. Mobile apps, online wash subscription management portals, and regular posting on social media also increase customer engagement.
  • Car washes that have seen business drop off during the pandemic may seek relief via the reauthorization of the Paycheck Protection Program (PPP). The PPP was revived with the December passage of the $900 billion COVID-19 Economic Stimulus Relief Act. The legislation includes $300 billion in funding for Small Business Administration (SBA) loans. The most recent round of PPP lets eligible borrowers get a second draw loan. It also simplifies loan forgiveness for loans under $150,000 and makes forgiven loans tax deductible. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act which included an additional $7.25 billion for PPP. The PPP is set to wind down on May 31, but funding could run out before then. As of mid-April, the program had $44 billion in funding left, according to the SBA.
  • More driving during the summer of 2021 may help boost demand for car washes.  Driven in part by optimism brought on by vaccine availability as well as stimulus checks, demand for petroleum products during the summer 2021 driving season is expected to increase 15% over 2020 levels, according to the US Energy Information Administration (EIA). However, highway travel this summer will still be lower than in 2019.

April 22, 2021

  • As offices reopen, tech companies are introducing cleaning scheduling apps to help office managers gather bids from qualified cleaning firms. The Onedesk Office Cleaning Platform allows cleaning firms to do a virtual walkthrough of an office space and bid on the job without having to visit the location. Carpet and upholstery cleaning firms may seek to become pre-vetted vendors for such apps.
  • Some carpet and upholstery cleaning firms quickly added new disinfecting services to meet the needs of commercial customers that are reopening. Some use disinfecting fogs and mists that can be efficiently applied with no wiping. Such services could become long-term revenue streams if consumers come to expect commercial spaces to be regularly disinfected. However, cleaning companies that promote their services to disinfect against coronavirus can open themselves to liability if workers are without proper training, equipment and chemicals. Additional guidance regarding COVID-19 issued in early April 2021 by the Centers for Disease Control and Prevention (CDC) suggests the virus primarily spreads through the air. The agency said, “It is possible for people to be infected through contact with contaminated surfaces or objects (fomites), but the risk is generally considered to be low.” The CDC said further studies “suggest that the risk of SARS-CoV-2 infection via the fomite transmission route is low, and generally less than 1 in 10,000, which means that each contact with a contaminated surface has less than a 1 in 10,000 chance of causing an infection.” The CDC also concluded “some types of disinfection applications, particularly those including fogging or misting, are neither safe nor effective for inactivating the virus unless properly used.”
  • Carpet and upholstery cleaning firms need to reassure customers that cleaning practices and equipment are safe to bring into their properties. Firms are encouraged to outline infection prevention in their proposals, assess their equipment performance, look professional, be transparent with clients, communicate cleaning protocols, and re-brand with language around infection prevention.
  • The Building Service Contractors Association International (BSCAI) has developed a COVID-19 protection training and certification course for cleaning professionals. The course covers proper cleaning procedures, infection control, worksite safety precautions, and documentation and communication protocols. It also follows all CDC, OSHA, and EPA guidelines. Carpet and upholstery cleaners may want their employees to complete third-party certifications to assure customers the company’s services follow accepted best practices.
  • Industry insiders suggest companies that offer coronavirus-related cleaning and disinfecting services check to ensure their insurance policies cover them in the event of a COVID-19-related claim by a customer or employee. Many cleaning and restoration companies that are performing COVID-19 decontamination services are finding their insurance doesn’t provide adequate coverage. Some insurance companies have created new biohazard coverage or added it to existing policies.
  • The cleaning industry is looking into how ozone can fight coronavirus. Ozone (over-oxygenated air) breaks the virus’ outer membrane, like topical cleaners, and destroys it. An ozone machine is turned on in the space and the technician leaves, providing lower risk of exposure to the ozone technician than a technician that applies disinfectant to a surface. Ozone machines are reasonably priced, easy to use and don’t require the purchase of liquid disinfectants, which can become short in supply during a pandemic.
  • As the pandemic has worn on, building and property managers have become more educated about the differences between cleaning and disinfecting. They are also becoming more aware of remediation firms that may unfairly increase the price if the job requires disinfecting a space where there have been confirmed cases of COVID-19. Carpet cleaning firms that offer disinfecting services should offer price transparency and ensure their products, equipment, and certifications are appropriate for viral mitigation.
  • In November, the Occupational Safety and Health Administration (OSHA) issued guidance to help employers understand compliance issues resulting in citations that are most common during OSHA inspections. The issues included: providing a medical evaluation before a worker is fitted with a respirator; development and implementation of worksite procedures for respiratory protection; ongoing training for PPE and respirator use; proper PPE and respirator storage that prevents damage and contamination; keeping required records for all work-related injuries, illnesses, and fatalities.
  • Carpet and upholstery cleaning firms that have seen business drop off during the pandemic may seek relief via the reauthorization of the Paycheck Protection Program (PPP). The PPP was revived with the December passage of the $900 billion COVID-19 Economic Stimulus Relief Act. The legislation includes $300 billion in funding for Small Business Administration (SBA) loans. The most recent round of PPP lets eligible borrowers get a second draw loan. It also simplifies loan forgiveness for loans under $150,000 and makes forgiven loans tax deductible. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act which included an additional $7.25 billion for PPP. The PPP is set to wind down on May 31, but funding could run out before then. As of mid-April, the program had $44 billion in funding left, according to the SBA.
  • Industry insiders are urging facilities managers to understand that disinfecting mists and fogs are not a substitute for cleaning. Applying disinfecting agents to soiled surfaces reduces the disinfectant’s effectiveness by preventing the proper dwell time on the surface. Industry experts also note there is some misconception that disinfection is a cleaning step when in fact it is a separate process which must be performed after any soiling of the surface is cleaned. Carpet cleaning and upholstery companies that offer spray disinfecting services may find opportunities to clean surfaces prior to disinfecting, thereby offering customers a complete solution.

April 26, 2021

  • Massachusetts casinos recorded strong revenue gains in March, with totals hitting the highest level since February 2020. Casinos in the state still faces capacity restrictions and must follow strict public health protocols.
  • US gaming revenue rebounded more than 25% month over month on an adjusted basis in February. It was the second consecutive month of month-over-month growth. Combined revenue from traditional casino gaming, sports betting, and iGaming reached $3.23 billion, representing about 85% of February 2020 gaming revenue.
  • The Centers for Disease Control and Prevention said in April that, based on analysis of the latest available data, cleaning once a day is usually enough to minimize the chance of coronavirus transmission in most settings. Casinos and casino hotels are likely to benefit if the guidance results in lower pandemic-related cleaning costs. The CDC did identify one appropriate situation for deep cleaning: an indoor environment where a case of COVID-19 had been confirmed within the past 24 hours.
  • About 77% of prospective travelers are less or much less concerned about travel safety for the second half of 2021 compared to 2020, according to a Global Rescue survey of more than 2,000 of its current and former members. The global vaccine rollout is helping boost consumer confidence, according to Global Rescue.

April 24, 2021

  • The Small Business Administration will soon open applications for a new round of grant funding through the newly launched Restaurant Revitalization Fund. The $28.6 billion program will target businesses including caterers, bakeries, restaurants, bars, and food trucks. Eligible businesses can receive funding equal to their pandemic-related revenue loss up to $10 million per business. Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.
  • The American Rescue Plan Act of 2021 signed into law in March provides funding for food service providers via grants under the newly established Restaurant Revitalization Fund. The Small Business Administration will administer the Fund and distribute up to $28.6 billion in grants to eligible establishments, which includes but is not limited to caterers, food stands, food trucks and food carts. Lawmakers earmarked $5 billion of the Fund for eligible businesses with gross receipts during 2019 of not more than $500,000.
  • The Knot’s annual wedding study predicts that 2021 and 2022 will be among the busiest years for weddings. Nearly half of the couples (47%) who planned to marry in 2020 but postponed have rescheduled for 2021 and later dates. A majority of couples who got engaged during the pandemic (73%) also set their wedding date for 2021. A third of couples who married in 2020 expect to have big celebrations when the Centers for Disease Control and Prevention ends restrictions larger gatherings.
  • Caterers that have pivoted toward dropping off food for business or social gatherings — rather than providing full service at events — have suffered, according to Melissa Wilson, principal at research firm Technomic. “One of the bigger financial challenges in catering is, when you offer a full service, from bartenders to servers to people cleaning up, you are able to charge way more and make more profit than you ever can dream of,” explained caterer Christine McEnery. “When you’re dropping things off in Tupperware, there’s a huge change in the customer’s perception of value.”
  • Social distancing has initiated the development of the “microwedding,” according to Catersource. Different from eloping, microweddings include the elements of a traditional ceremony and reception on a much smaller scale. Guest lists average about 25 to 30 individuals, which allow the bride and groom to celebrate for a few thousand dollars, a fraction of the cost of a traditional wedding. According to the National Association for Catering and Events (NACE), weddings account for about half of industry revenue.
  • Outdoor weddings alleviate some of the concerns related to COVID-19. “Outdoors will be one of the safest ways to host a wedding for a variety of reasons. First, you have fresh air at all times, so the air is not being moved around by air conditioners, thus keeping the air at the party fresh. Also, when you have a tented wedding, you can make the tent larger to allow for more social distancing between tables. Ballrooms [can be] too restrictive when it comes to requiring more space,” stated the owner and planner of Elegant Occasions by JoAnn Gregoli.
  • Because of COVID-19, events may no longer include passed hors d’oeuvres, buffets, or family-style service. The elaborate dessert and sweet displays that had grown popular pre-pandemic will likely take a break as events adapt to a new normal. Industry experts predict more creatively pre-wrapped individual servings, hygienic serving stations, and the return of the beautifully plated dessert, according to Special Events. The resurgence of classic homestyle desserts is also possible as hosts gravitate towards simplicity. In some cases, pastry chefs may have to adapt to limited ingredients because of constraints within the supply chain.

April 17, 2021

  • The Associated Builders and Contractors (ABC) trade association expects a "... tsunami of economic and employment growth across America." The US may end up growing faster than China this year due to federal stimulus spending, according to ABC Chief Economist Anirban Basu. "Much of the stimulus to come will directly affect construction, particularly the heavy and civil engineering segment. While any infrastructure stimulus should be geared toward projects generating the highest rates of return and open to bids by all competent contractors, the sheer volume of money flowing into the economy is set to create massive forward momentum for the balance of 2021 and likely through 2022," Basu added.
  • The transportation construction market is expected to shrink 5.5% in 2021, according to the American Road & Transportation Builders Association (ARTBA). The reduction will be driven primarily by the severe economic recession caused by the coronavirus pandemic. Overall, the value of work is expected to drop from $294.2 billion in 2020 to $278.1 billion in 2021. ARTBA cautions that overall transportation construction activity will vary across the country as states deploy different strategies to balance their budgets and manage debt. States are expecting shortfalls in transportation revenues of anywhere from $35 billion to $40 billion through 2024, according to ARTBA.
  • Total construction starts will increase 4% in 2021, according to Dodge Data & Analytics. "The dollar value of starts for residential buildings will increase 5% in 2021, nonresidential buildings will gain 3%, and nonbuilding construction will improve 7%. Only the residential sector, however, will exceed its 2019 level of starts thanks to historically low mortgage rates that boost single family housing,” said Richard Branch, Chief Economist for Dodge Data & Analytics.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, decreased to 82 in March from 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. The outlook for home sales in six months increased to 83 from 80, while the outlook for buyer traffic was unchanged at 72.
  • Total construction spending decreased 0.8% month over month on an adjusted basis but increased 3.4% year over year on an unadjusted basis in February, according to the US Census Bureau. Residential construction spending decreased 0.2% month over month but increased 19.7% year over year in February. Nonresidential construction spending decreased 1.3% month over month and 7.8% year over year in February.
  • Spending on nonresidential building projects is declining and will do so through 2021, according to a mid-year update to the American Institute of Architects’ (AIA) Consensus Construction Forecast. The AIA estimates an 8% spending drop in 2020 and just under 5% in 2021 due to pandemic-induced economic disruptions. This is the first time in nearly a decade that nonresidential construction spending has trended downwards, according to the AIA.

April 13, 2021

  • Charter bus company Storer Coachways has converted their busses into full-service mobile coronavirus testing sites. Clinicians can administer and collect up to 700 COVID-19 tests a day on the busses. The first bus went into service as a testing site in December 2020 and 15 busses, 13 full-sized charter busses and two mini mobile units that can be used across 15 California counties, were available by early March. Storer Coachways Vice President Sarah Storer says that the busses can eventually be used as mobile vaccine sites and, when the pandemic ends, Bus Test Express will continue to serve as medical clinics.
  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. As of April 4, the SBA had disbursed $746 billion of the $813.5 billion total appropriated for the PPP. Some $60 billion, or 21% of Round Three PPP funding, remains available. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Bookings for bus travel in December 2020 were 22% to 25% of 2019 levels nationwide, according to a DePaul University study. Bookings declined most year over year in the Northeast US, centered around the busy Washington DC - New York City - Boston corridor. That region ended 2020 with just 16% of bookings from the previous year.
  • The Coronavirus Economic Relief for Transportation Services (CERTS) Act, which was passed as part of the coronavirus relief package signed into law in late December 2020, provides $2 billion in funding for the transportation industry, including bus, motorcoach, passenger vessel, and other transport services providers. The legislation excludes the airline and aviation industries.
  • The drop in bus travel is raising concerns about the potential long-term damage to an essential transport method for millions of lower-income consumers. Greyhound said that it is operating less than half its normal bus routes during the pandemic, while revenues have fallen nearly 60%. The American Bus Association (ABA) estimates that 85% of the 100,000 people who work in the bus industry have been laid off or furloughed — in most cases since March.
  • Barons Bus, a private charter bus company in Cleveland, OH, claims to be the first in the US to have installed UV light to help disinfect the inside of its tour buses. “We’ve added two types of UV lights to our buses in service. We have a UVC light in our HVAC systems and a Far UV light that sits in the interior of the bus. It’s a UV light used in medical facilities and hospitals,” said company vice president Patrick Goebel.
  • The charter bus industry will lose $11 billion, almost 75% of typical annual revenue, because of the coronavirus pandemic, according to the ABA.
  • The ABA has issued guidance for the industry regarding waiver of liability. Charter bus firms are looking to amend their contracts to reduce risk of litigation if a passenger contracts COVID-19 while using their services.
  • An ABA task force has developed sample policies to help charter bus firms create thorough cleaning regimens for vehicles. ABA is also creating messaging to help charter bus firms market their cleaning policies in efforts to reassure passengers and spur demand. The International Motorcoach Group (IMG) has developed Clean Care guidelines for sanitizing vehicles and protecting drivers and riders. The guidelines were developed using recommendations from the CDC, travel industry and medical community. The guidelines include increased cleaning, social distancing in seating, and use of personal protective equipment (PPE).
  • Some of the same concerns that consumers have regarding air travel extend to bus transport. As a result, the charter bus industry is promoting its equipment safety features including seats that are high-backed and facing forward as limiting transmission risk. It’s also informing consumers about airflow and filtration systems that circulate fresh air.

April 29, 2021

  • The global business aviation industry showed signs of recovery in April. Global business flights in April 2021 were down 8% compared to April 2019 (comparison to April 2020 is problematic as much of the world was in lockdown), according to WingX. Business aviation in the US in the first four months of 2021 was about 5% below the same period in 2019. Business and prop flights out of Florida, the largest US market, were up 18% in the first four months of 2021 compared to the same period in 2019. Although demand in Texas has improved, it was still down 10% over the same timeframe. Lockdowns in Europe and slow vaccine rollouts continued to hinder business flights amid tighter cross border controls. Business aviation in Europe as of April was down 1% year-to-date compared to the same period in 2019, led by a 54% drop in UK demand.
  • On April 27, the 7-day average for daily new cases was about 53,000 – still high, but more than four times lower than the highs seen in early January. Hospitalizations were up but deaths were falling. As of April 27, all but seven states were mostly open, according to The New York Times. Cases in some parts of Europe were slowing in April, but concern about new variants and sluggish vaccine distribution remained. The UK has fared better on vaccines and keeping new cases down. However, travel restrictions remain in place in much of the world. In late January the US began requiring all travelers entering the country to show a negative COVID-19 test or prove they have recovered from COVID-19 in the last 90 days. Around the same time, the EU imposed similar requirements. However, in April, the European Union announced that fully vaccinated Americans would be able to travel to the EU starting this summer.
  • Firms are dedicating each pilot/crew to a plane rather than shifting crews across the fleet of aircraft in order to limit their exposure. Private jets also spend much less of their time in the air than commercial ones, leaving plenty of time on the ground for sanitizing aircraft interiors between flights. Fractional ownership jet companies NetJets and FlexJet have both announced they will fly pilots to and from their rotation shifts on their own fleets instead of having them fly commercially. Some companies also plan to test all their crews for COVID-19 to reassure passengers.
  • A study by Globe Air found that commercial passengers can experience as many as 270 person-to-person contacts while private flight passengers experience about 20. Concerns about coronavirus could improve consumers’ value perceptions about private flights.
  • Publicly traded companies are increasingly listing coronavirus among their risk factors in SEC filings. Companies may spend more for private travel to keep important executives safer, according to Forbes. However, the shift to at-home work and video conferencing for sales pitches and staff meetings are causing many executives to re-think their business travel budgets, according to the Wall Street Journal. Industry insiders have estimated it will take several years for business travel to return to pre-pandemic levels. Delta Airlines estimates that by 2023, business travel will be close to 70% of what it was before the pandemic.

April 12, 2021

  • The Federal Reserve raised its forecast for 2021 gross domestic product (GDP) by more than 50% from its December 2020 estimate. GDP is now expected to increase 6.5% in 2021, according to the Federal Open Market Committee, the central bank's monetary policy making group. That is sharply higher than the 4.2% forecast made in December. "Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak," Federal Reserve officials said.
  • Total domestic chemical production volumes (excepting pharmaceuticals) decreased 3.6% year over year in 2020, according to the American Chemistry Council (ACC). Chemical volumes are, however, predicted to rebound to a 3.9% growth rate in 2021. Rising demand, stabilizing export markets, and the competitive advantage linked to domestic supplies of shale gas and natural gas liquids are among the factors that are expected to contribute to the upswing.
  • Chemical production decreased 3.8% year over year in February, marking the 21st consecutive month of year-over-year declines, according to the American Chemistry Council. Chemical output fell in all regions as winter storms disrupted chemical production in the Gulf Coast and other parts of the country that rely on raw materials from the region.
  • The American Chemistry Council’s (ACC) Chemical Activity Barometer (CAB) rose 1.2% in March on a three-month moving average basis following a 1% increase in February. Production-related indicators were positive. Trends in construction-related resins and related performance chemistry were solid and suggest further expansion past the weak February home sales and housing starts. Resins and chemistry used in other durable goods were strong. Plastic resins used in packaging and for consumer and institutional applications were positive. Performance chemistry for industry was mixed. US exports were positive, while equity prices showed further gains. Product and input prices were positive, as were inventory and other supply chain indicators. The barometer rose 5.5% year over year in March.
  • Wholesale sales of chemicals increased 0.4% month over month on an adjusted basis but decreased 1.1% year over year on an unadjusted basis in February.
  • Chemical distributor industry employment decreased 4.8% year over year in February.

May 2, 2021

  • Some analysts expect the Paycheck Protection Program (PPP) to run out of funding before the May 31 application deadline. Lenders and borrowers are asking for additional funding. Lawmakers allocated $284 billion to the program when it reopened in January. Sam Sidhu, chief operating officer of Customers Bank in Wyomissing, PA, estimates that $100 billion to $150 billion more would probably be enough funding for the PPP make it to May 31 with some money left over.
  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Dr. Anthony Fauci, the federal government's leading epidemiologist, said in late February that elementary school-aged children will likely be able to receive Covid-19 vaccinations in early 2022. Pfizer and Moderna began vaccine trials in children ages 12 and older in February 2021. A Centers for Disease Control and Prevention (CDC) advisor said in December 2020 that children and young teens could get a COVID-19 vaccine in the second half of 2021. The Pfizer vaccine is approved for people ages 16 and older, while the Moderna and Johnson and Johnson vaccines are approved for people 18 and older.
  • Child care expenses have spiked by more than 40% during the pandemic, soaring from nearly $10,000 annually per child to more than $14,000, according to Center for American Progress data analyzed by online lending marketplace LendingTree. “So much more is being required of these centers during the pandemic, and these new, tougher safety guidelines from governmental agencies have forced them to ramp up their spending in order to comply,” said Matt Schulz, LendingTree’s chief credit analyst. Annual costs at center-based care providers for children ages 3 and 4 have increased 57% during the pandemic. Annual costs at center-based care providers for infants and toddlers (children 2 and younger) are up 37%.

May 2, 2021

  • All 50 states have either opened coronavirus vaccinations to everyone eligible under US Food and Drug Administration emergency use authorizations, or have announced when they plan to do so. For all states currently vaccinating anyone 16 and older, people ages 16 or 17 can only receive a Pfizer/BioNTech vaccine, as it is the only option authorized for use in that population so far. The vaccines made by Moderna and Johnson & Johnson are authorized for use in adults 18 and older. Visits to chiropractic clinics may increase if patient confidence rises along with vaccination rates.
  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. The SBA approved 3.6 million loans worth $211.8 billion as of March 28, which covers about 75% of the $284 billion that was allocated to the program when it reopened in January. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
  • Many chiropractors say that they’re seeing more patients with back and neck complaints. Industry experts cite the rise of telecommuting as a likely cause of the increase in back and neck complaints, as quickly converted home spaces may not be suitable for work sessions lasting eight hours or longer. Doctor Jaclyn Andrews, a chiropractor with Pittsburgh Chiropractic and Massage Therapy Center, says working from a kitchen table or couch isn’t the best option. “Ideally, you want to have your shoulders rolled down and back and you also want to think about having your neck nice and neutral,” said Andrews.

April 26, 2021

  • Churches and other religious institutions are experiencing declines in attendance and collections due to closures related to the coronavirus. Smaller congregations are more vulnerable because they are likely to depend on weekly offerings collected in church. Megachurches, defined as having more than 2,000 members, are best positioned to withstand extended closures, largely because of their extensive online operations and online giving programs, according to NPR.
  • The pandemic has reduced participation in small church group activities, such as Bible studies, according to a report released in April by LifeWay Research. Nearly 60% of churchgoers reported participating in small church groups in 2020. Only 37% of congregants said they participated in small groups in 2021. About 53% of worshipers said they increased participation in online services in 2020 compared to 2019. Nearly 25% of churchgoers said they attended online Bible studies more often than in 2019. Lack of in-person services has reduced giving. Of those surveyed, only 53% said they gave the same amount of money to the church in 2020 as they did in 2019; 15% said they increased giving in 2020.
  • While vaccines have brought hope for a return to more normal worship services for many congregations, services likely won’t completely normalize until herd immunity is attained, according to a January article in Christianity Today. Even with some congregants vaccinated, in-person worship will still come with infection risk. Some houses of worship may seek to offer special, scaled down services for those who have been vaccinated. Christianity Today suggested elderly worshipers who have received vaccines would likely appreciate the opportunity to gather before all congregants can safely do so.
  • Social distancing has forced churches and religious organizations to invest in technology to bring worship services, member resources, and tithing online. Leaders of churches and religious organizations are looking for technology training.
  • Some health experts and religious leaders are worried ethical concerns may prevent some people from getting vaccinated. The Christian Medical & Dental Associations (CMDA) has said the Pfizer and Moderna vaccines are effective and ethical, and the group encourages their use. Some people are concerned that human fetal tissue may have been used in various phases of vaccine development. Medical ethicists have suggested the public good of preventing the spread of a deadly disease outweighs ethical concerns about the sourcing of cells used in vaccine development.
  • The vast majority of US churches have complied with various restrictions on in-person worship services aimed at preventing the spread of COVID-19, such as requiring face coverings, social distancing, and limiting capacity. However, several churches have filed lawsuits claiming restrictions unfairly single out houses of worship. In such cases some rulings favored the church and others ruled on the side of the jurisdiction that issued the regulations. Early in the pandemic, the Supreme Court sided with the states in lawsuits against limits on church attendance in California, Nevada, and Illinois. The Supreme Court later blocked an order in New York state to limit attendance to 10 people in areas with severe community spread. In February, the high court exempted churches from California’s ban on indoor gatherings in counties with high COVID-19 infection risk, but allowed the state to prohibit singing and chanting during services.
  • About 40% of white evangelical Protestants say they likely won’t get vaccinated, according to a March 2021 poll by The Associated Press-NORC Center for Public Affairs Research. That compares to 25% of all Americans who are vaccine resistant, 28% of Protestants overall, and 27% of nonwhite Protestants. Experts note that white evangelicals represent 20% of the US population so half of them refusing vaccines could be a barrier to nationwide herd immunity. However, faith-based outreach efforts have the potential to reduce vaccination hesitancy among worshipers, according to a recent survey by the Public Religion Research Institute (PRRI) and the Interfaith Youth Core. The survey found that 44% of religious service attendees who were hesitant about vaccines said a faith-based approach could impact their eventual decision to be vaccinated. Approaches mentioned in the survey included a religious leader or community member getting vaccinated, support of vaccines by church leaders, informational forums about vaccines, and vaccination drives.

April 28, 2021

  • Many civic and social organizations suspended member access, activities, and programs during the coronavirus outbreak based on recommendations from the CDC and federal, state, and local health officials. Some organizations are offering online alternatives for classes and activities. Other outreach efforts include programs in which volunteers call to check-in on and provide contact for isolated and homebound seniors, emailing information on depression and stress reduction, and providing referrals to calls for help. As the pandemic has caused job losses and other stresses on military families, some VFW posts have raised food donations and are delivering them to military families in need.
  • Social distancing makes fundraising for school PTAs and scouting organizations more difficult, which hurts their programs and viability. Some civic organizations have come up with some creative solutions such as “reverse parades” where donors drive through a school or other location to drop off donations. Other workarounds include parades that drive in front of donors’ homes.
  • After a spike over the winter, daily new COVID-19 cases have fallen significantly. On April 26, the 7-day average for daily new cases was about 55,000 – still high, but more than four times lower than the highs seen in January. Hospitalizations were up but deaths were falling. As of April 27, all but seven states were mostly open, according to The New York Times. Amid falling cases and wider vaccine distribution, some civic and social organizations are gradually phasing member access, activities, and programs back in, depending on guidance from state and local governments.
  • Local YMCAs have provided community support by offering childcare to healthcare workers and first responders, sheltering people experiencing homelessness, and supporting seniors facing social isolation. However, the pandemic significantly impacted the YMCA’s finances. Some regional Y affiliates lost half their members and nearly half their revenue in 2020. The national YMCA organization allowed local Ys to determine if, when, and how to go about reopening according to federal, state, and local guidelines. As COVID-19 cases have fallen and vaccinations have risen, more Ys have resumed services. Many local Ys are offering day, overnight, and online camp experiences for summer 2021. In April 2021, the Centers for Disease Control and Prevention (CDC) issued updated guidelines for summer camps, including keeping children in “pods” of 10 to limit potential exposure, masks, social distancing, and procedures to have in place in the event that a camper or staff member is exposed to COVID-19 or has symptoms.
  • Nonprofit civic and social organizations are finding their budgets squeezed as demand for services remains but staffing and donations have waned. Organizations that received funding from state and local governments may receive less as governments trim their own budgets due to reduced tax revenue. A fresh round of stimulus relief was passed in December. The $900 billion spending bill included more than $284 billion for first and second forgivable Paycheck Protection Program (PPP) loans, and expanded eligibility for nonprofit organizations. However, the bill did not include aid for state and local governments. Typical nonprofits get four times as much funding from state and local governments as they do from private foundations, according to Nonprofit Quarterly.
  • In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act (ARP). The third round of stimulus includes $360 billion in aid to state and local governments. State and local governments are free to spend the funding on nonprofits that serve the greater good of the community. The ARP also includes an additional $7.25 billion for the Paycheck Protection Program (PPP) which provides forgivable loans through the Small Business Administration (SBA) and was created under the CARES Act. The PPP is set to wind down on May 31, but funding could run out before then. As of mid-April, the program had $44 billion in funding left, according to the SBA.
  • The COVID-19 pandemic has significantly reduced the number of people who volunteer for nonprofit organizations, according to The New York Times. Since the onset of the pandemic two-thirds of volunteers have cut back or stopped volunteering because of COVID-19, according to a recent study by Fidelity Charitable, a nonprofit organization created by Fidelity Investments. The drop in volunteering can exacerbate a nonprofit’s financial difficulties as they lose assess to free labor at a time when donations have fallen. According to nonprofit membership organization Independent Sector, the average value of a volunteer’s time is more than $27.00 per hour. Some nonprofits have had to hire paid workers to replace lost volunteers.
  • Despite the economic turmoil and other hardships brought on by the pandemic, more Americans say they gave to charitable causes in 2020 than those who say they did so in 2019, according to a recent survey by DealAid.com, an ecommerce site that donates a portion of sales to nonprofit organizations. More than 70% of survey respondents said they gave to charity in 2020, compared to 62% who said they gave in 2019. While the percentage of people saying they gave went up for 2020, the average overall amount given fell about 8% to $348. Nearly 72% of those surveyed said they planned to give to charity in 2021 and they plan to increase their giving amount by 14%. Causes related to health were the most popular recipients of charitable giving in 2020.
  • As COVID-19 vaccinations have ramped up, many nonprofits are stepping up to help, according to The Chronicle of Philanthropy. Organizations that normally respond to disasters are providing equipment, and logistics and operational support of mass vaccination and test sites. Nonprofits that typically provide outreach to specific groups, including people of color, the LGBTQ community, the elderly, and people experiencing homelessness, are working with state and local governments to determine how to best get vaccines to the people they serve. Some charities are also recruiting volunteers to help non-English speakers connect with vaccination registration resources.

April 11, 2021

  • Many analysts say that manufacturers of clay-based housewares should prepare for an upcoming pandemic-related spending shift that is increasingly referred to as revenge shopping. Consumers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time. The bounce back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues. Spending on clay-based housewares may decline  as a result.
  • President Biden signed the $1.9 trillion American Rescue Plan Act coronavirus relief package into law in early March, directing a third round of stimulus checks to most Americans. Manufacturers of consumer items made with clay products are likely to benefit if the plan helps stabilize consumer finances. The aid comes as millions of Americans struggle to pay for food and housing, and face the loss of eviction protections that expire at the end of March 2021. The Senate bill directs $1,400 payments to individuals earning up to $75,000, but cuts off eligibility for single people earning more than $80,000. For couples who file a joint federal income tax return, the phase-out begins at those making $150,000 and ends at $160,000.
  • Manufacturing giant Corning announced a “new breakthrough in glass-ceramic technology” that can kill pathogens within two hours. The Corning Guardiant technology adds copper to glass-ceramic technology to create a material that shows a “highly durable antimicrobial activity against SARS-CoV-2,” the virus that causes COVID-19, company officials say. The product was tested in a paint coating that was still effective against the virus even after Corning simulated six years of scrubbing.
  • Construction levels are affecting demand for brick and construction clay products. Total construction spending decreased 0.8% month over month on an adjusted basis but increased 3.4% year over year on an unadjusted basis in February, according to the US Census Bureau. Residential construction spending decreased 0.2% month over month but increased 19.7% year over year in February. Nonresidential construction spending decreased 1.3% month over month and 7.8% year over year in February.
  • SINTEX Technologies, an original equipment manufacturer (OEM) of ceramic products for medical and nonmedical applications, has developed a silicon nitride compound with antiviral properties that it is marketing to reduce the spread of COVID-19 on surfaces and in PPE. The compound inactivates the COVID-19 virus within a minute of exposure. The silicon nitride can be applied to high-touch surfaces such as counters, door knobs, medical equipment, screens, and face masks and can be mixed into paints and coatings. The compound also works to inactivate other viruses including Influenza A and Enterovirus.
  • The value of the global market for ceramic filtering membranes is forecast to grow 8.2% annually to approach $699 million by the end of 2026, according to 360 Research. Demand from the biotechnology and pharmaceutical industry will help to drive sales. The pharmaceutical industry uses ceramic filtration to prevent contamination of medicines from viruses. The accidental introduction of a virus like COVID-19 into a medicine product could have devastating effects on patients. Ceramic filters are also used in food, beverage and chemical manufacturing, metal finishing and power generation.
  • Employment in the clay product and refractory manufacturing industry decreased 9.7% year over year in February but was up 8% from the pandemic-related low of April 2020.
  • The coronavirus has not slowed clay and refractory manufacturers’ increases in product prices. The price of clay construction products was up 2% in January from a year earlier. Likewise, clay refractory prices increased 1.7%.

April 22, 2021

  • Teen spending is slowly increasing from a two-decade low, with teenage girls leading the spending recovery, according to Piper Sandler's 41st biannual “Taking Stock with Teens” report. Online fashion brands like Shein and Princess Polly are surging in popularity, along with thrift marketplaces like Depop. The “wallet share” that upper-income female teens devote to apparel hit 29% in April, a high not seen since 2013. That percentage had stagnated at 25%, from the spring of 2017 to the spring of 2019, Piper Sandler said.
  • Many analysts expect a wave of discretionary expenditures on items like clothing when the pandemic wanes. Bloomberg Economics estimates that consumers have amassed about $1.7 trillion in savings since the beginning of the pandemic through January. That’s being bolstered by a new round of stimulus payments. Consumer spending during Q2 and Q3 2021 is likely to be the strongest such period in at least 70 years, according to economists at financial services firm Wells Fargo.
  • Retail sales for clothing stores increased 18.3% in value month over month on an adjusted basis and 105% in value year over year on an unadjusted basis in March.
  • Telecommuting has helped make the athleisure industry one of the most lucrative sectors of the fashion world as companies such as Lululemon, Alo Yoga, and Athleta have risen in popularity. The market for athleisure clothing is expected to grow at a compound annual rate of 6.7% from 2019 through 2026 and reach a value of $257.1 billion.
  • Clothing store chain American Eagle announced plans in late January to shut between 200 and 250 of its approximately 880 stores in the next two to three years. The closures will mostly be mall-based locations. The company also plans to increase the number of Aerie stores by 50, to about 400, at the end of 2021, and plans to have 500 to 600 Aerie locations in 2023.
  • Gap Inc., the owner of the Gap, Banana Republic, and Old Navy chains, plans to have closed 30% of its Gap and Banana Republic stores in North America by the beginning of 2024. “We’ve been overly reliant on low-productivity, high-rent stores,” said Mark Breitbard, global head of the Gap brand. About 80% of revenue from Gap and Banana Republic is expected to come from e-commerce and non-mall locations like outlet stores and strip mall spaces. Industry experts say that the closures may be due in part to avoidance by shoppers of enclosed malls due to coronavirus concerns.
  • Employment in the clothing store industry decreased 23.5% year over year in February but was up 129% compared to the low of April 2020.

April 13, 2021

  • President Biden’s $2.3 trillion infrastructure proposal includes $16 billion to clean up abandoned mines and plug old oil and gas wells. Experts say that the Biden administration sees the proposal as an opportunity to create jobs in areas hit hard by the coronavirus pandemic while reversing decades of environmental damage. Biden says that he wants the work to be completed at least in part by out-of-work miners and oil industry personnel.
  • The Energy Information Administration projects coal miner productivity to decrease to an average of 6.32 short tons (st)/hour in 2021 from an estimated 6.37st/hour in 2020 even though the agency expects production to increase by 12% from a 55-year low in 2020.
  • The share of energy generated from coal has dropped more sharply during the coronavirus pandemic than that of any other power source, according to a report from the Potsdam Institute for Climate Impact Research. Ottmar Edenhofer, director and chief economist at the Potsdam Institute and an author of the report, said that the findings were not expected because natural gas has traditionally had the highest operating costs of all power sources, so gas-fired plants are usually the first to be taken offline when demand for power falls. The sharp decline in gas prices during the pandemic may have made coal power more expensive than gas power, however. The trend away from coal could outlast the pandemic, according to the report. While power plants that use renewable energy, like wind or solar, are expensive to build, it is not necessary to purchase fuels to run them.
  • US greenhouse gas emissions decreased 10.3% year over year in 2020, the largest decrease in the post-World War II era, according to the Rhodium Group. Power plant emissions saw the second largest decline during the year, dropping 10.3% below 2019 levels, driven by retirements of coal-fired power plants and a general decline in electricity demand due to the economic damage from the pandemic.
  • Employment in the coal mining industry decreased 2.5% year over year in March but was up 16.2% from the low of April 2020.
  • Global coal power capacity fell for the first time on record in 2020, according to US research group Global Energy Monitor (GEM). The closure of generators outstripped stations being commissioned, causing coal power capacity to decline by 2.9 gigawatt in the first half of 2020. Slowed commissioning due to the economic shock of the coronavirus pandemic, as well as stronger pollution regulations in Europe, caused the global decline, said Christine Shearer, GEM's coal program director. India has also shrunk its coal-fired capacity in 2020, but China increased its coal generating capacity. China built 86% of new coal generation capacity during the period. Some industry experts say that, while the decline represents less than 1% of generation capacity, it will be a "pivot point" for global electricity supply and mark the long-term decline of coal-fired generation.
  • Energy consumption from renewable sources (solar, wind, hydro) has overtaken coal for the first time since 1880, when wood was used to generate slightly more energy than coal, according to the US Energy Information Administration. The coal mining industry was already suffering before COVID-19 as more power plants were converting from coal to natural gas as a feedstock.
  • Natural gas prices fell as low as $1.43 in June 2020 but had risen to $2.62 on April 12. Industry observers suggest that natural gas prices will need to be at least $3 per million Btu before power producers will consider switching back to coal.

April 11, 2021

  • Vehicle miles traveled (VMT), an indicator of demand at coffee shops, increased 1.2% month over month in January but was down 11.3% year over year, according to the Federal Highway Administration. VMT was down 13.2% year over year for all of 2020. The December year-over-year drop in VMT was largest in the Northeastern US (-16.2%) followed by the North Central (-11.8%), West (-11.2%), South Atlantic (-11.1%), and South Gulf (-7.9%).
  • Many analysts say that coffee and tea manufacturers should prepare for an upcoming pandemic-related spending shift that some are calling revenge shopping. Shoppers will sweep “through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns.” Businesses with “communal value,” namely eateries and entertainment venues, will benefit the most, the consulting firm says. A significant portion of coffee sales may shift from grocery stores back to coffee shops as a result.
  • Consumer-product manufacturers are expanding factories and revamping production lines in the belief that work-from-home habits will outlast the coronavirus pandemic. J.M. Smucker Co., for example, has restarted idle machines and retrofitted others to make sizes and varieties of Folgers and Dunkin’ coffee that it expects to be popular with people working from home. The pandemic has lasted so long that people have formed new habits and bought equipment to help them work from home for years, said Bob Nolan, Conagra’s head of consumer insights and data. “This gives us confidence that this isn’t just a flash in the pan," he said.
  • Coffee shops are busiest at 10 am on Saturdays, according to Google. The Internet advertising and search giant made the discovery while studying its Maps and Trends services and comparing searches during the coronavirus pandemic to the same time period a year earlier.
  • World coffee production for 2020/21 is forecast to increase 5.4% year over year to a record 176.1 million. Brazil is forecast to account for most of the gain as its Arabica crop enters the on-year of the biennial production cycle and Robusta reaches record output. World exports are forecast higher, largely on the strength of Brazil. Global ending stocks are expected to jump to a 6-year high as production outpaces consumption.

April 24, 2021

  • The number of Americans drinking coffee at outlets away from home fell almost 20% during the pandemic, but Americans still consume the same amount of coffee, according to according to the National Coffee Association.
  • Telecommuting, which is widely considered to have shifted demand for coffee from shops to the home, is likely to continue post-pandemic. A March report from the employment website Indeed says postings for jobs that mention “remote work” have more than doubled since the pandemic began. Such job postings are increasing even while vaccinations are accelerating. Automaker Ford recently told about 30,000 of its employees worldwide who have worked from home that they can continue to do so indefinitely, with flexible hours approved by their managers.
  • Drive thru is becoming an increasingly attractive strategy to mitigate the impact of Covid-19. About 63% of consumers surveyed by World Coffee Portal in 2020 favored the drive-thru over entering a coffee shop, up from 48% in 2019. Dunkin’ is by far the largest drive-thru operator in the US with 6,391 sites, ahead of Starbucks’ 3,900 locations and Panera Bread’s 840. About 37% of all US branded café outlets offer a drive-thru option.
  • Coffee shop sales will only return to pre-pandemic levels in 2023, according to research and consultancy firm Allegra World Coffee Portal. The firm estimates that sales fell 24% year over year to $36 billion in 2020 and will only grow to $40 billion this year, below 2019 levels.
  • More than half of specialty coffeehouses, especially ones with three locations or fewer, are going to close because many are not geared toward delivery or drive-thru lanes, according to R.J. Hottovy, a senior restaurant analyst at Morningstar.
  • COVID-19 hurt breakfast sales in restaurants more than lunch or dinner sales, and the recovery of the breakfast business has been slow due to the drastic reduction of commuter traffic. Executives at Dunkin’ Brands Group stated that they had seen a drop in business in the crucial 6 a.m. to 9 a.m. time frame, even as things had picked up between 10 a.m. and 2 p.m.

April 22, 2021

  • Laundromats are adapting business protocols in response to the coronavirus. According to a survey by American Coin-op, laundries are cleaning and sanitizing more often (94%), limiting the number of people on premises (62%), posting coronavirus-related signage (77%), emphasizing WDF (wash/dry/fold) and pickup/delivery services (32%) and increasing advertising and social media efforts (34%). Some establishments are only taking drop-off laundry, asking customers to fold clothes at home, and suggesting mid-week visits that allow for better social distancing, according to CBS News.
  • In the most recent American Laundry News Your Views survey, 80% of laundry owners said they made operational changes in response to COVID-19. Of about 20% of laundry managers that didn’t make changes, 60% said it was due to an existing emphasis on cleanliness prior to the pandemic. Key steps managers took included employee temperature checks, increasing wash temperatures, and daily electrostatic spraying. More than 70% of laundry managers say their changes in cleaning protocol will stay in place even after the pandemic.
  • The COVID-19 outbreak slowed the circulation of coins in the US economy which created problems for several coin-dependent business, including coin-operated laundries. During the quarantine, not only did retail activity drop but consumers stopped cashing in their coins for paper notes. The US Mint also slowed coin production in the early days of the pandemic to protect workers. Consumers’ shifting to contactless payment options also reduced coin circulation. However, the coin shortage has improved as the US Mint increased coin production, according to American Banker. The Mint produced 14.8 billion coins in 2020, up 26% in 2019.
  • Some industry insiders suggest coin-op laundry firms consider adjusting their service offerings to meet the evolving needs of customers. Touchless payment systems are expected to be very important, and some firms may add pick-up and delivery options as more consumers work from home and run fewer errands. Adding sanitizing features to existing laundry equipment can help draw in customers, differentiate from competitors, and generate additional revenue, according to American Coin-op. Sanitizing features include the injection of ozone gas to cold water intakes, which kills bacteria and viruses. Other disinfectants can also be added at various stages of the washing cycle. Sanitizing options often can be offered as add-ons to existing machine menus.
  • Laundries are adapting to help promote social distancing. Coin-operated laundries that are open 24-hours may offer better opportunity for social distancing. Laundromats that are larger may also have advantages in providing distance between customers. Some laundries have installed TVs or repurposed existing ones to display distancing information, such as suggesting customers wait in their vehicles between laundry phases. Concern over shared laundry facilities in apartment buildings and condos may drive demand for drop-off services as well as home pick-up and delivery.
  • Coin-operated laundries that have seen business drop off during the pandemic may seek relief via the reauthorization of the Paycheck Protection Program (PPP). The PPP was revived with the December passage of the $900 billion COVID-19 Economic Stimulus Relief Act. The legislation includes $300 billion in funding for Small Business Administration (SBA) loans. The most recent round of PPP lets eligible borrowers get a second draw loan. It also simplifies loan forgiveness for loans under $150,000 and makes forgiven loans tax deductible. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act which included an additional $7.25 billion for PPP. The PPP is set to wind down on May 31, but funding could run out before then. As of mid-April, the program had $44 billion in funding left, according to the SBA.
  • Despite their nondiscretionary nature, coin-operated laundries were affected by the lockdowns and social distancing requirements, according to an April 2021 report by S&P Global. Suburban flight early in the pandemic led to higher-than-normal multi-family housing vacancies which negatively affected some laundry companies’ revenue and earnings. S&P Global estimates organic revenue for firms in the hygiene and facility management services segment declined 5% in 2020 compared to 2019. However, the sector’s organic revenue is expected to bounce back in 2020 by 5% to 10%.

April 26, 2021

  • The Consumer Financial Protection Bureau (CFPB) encourages credit reporting agencies and furnishers to continue credit reporting but also provide leeway for consumers and companies experiencing hardships. CFPB is relaxing enforcement of dispute investigation timelines on a case-by-case basis to help collection agencies hit by staffing losses due to coronavirus. Collection agencies can also forego investigating disputes by credit repair organizations that are determined to be “frivolous or irrelevant.” The CARES Act outlines obligations for collections agencies to report as current any credit obligations in which payment accommodations were made.
  • The District of Columbia passed legislation in early April 2020 banning collection agencies from outbound calling, writing or messaging consumers to collect debts until 60 days after the coronavirus emergency ends. Agencies can still reply to customer-initiated communications. The law also prohibits collectors from initiating legal proceedings, repossessions, or visiting consumers’ homes. As of April 16, four states and the District of Columbia had in place regulation of collections during the pandemic beyond collections related to stimulus payment garnishments. A stimulus relief bill was passed in December. The $900 billion spending bill included $600 stimulus checks per person, including children. Under the stimulus law passed in December, private creditors and debt collectors are not permitted to garnish stimulus payments. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act. The plan includes $1,400 stimulus checks for most individuals and their dependents, and a $300 supplemental unemployment benefit that extends through September 6, 2021. Stimulus payments under the American Rescue Plan are subject to collections because the bill passed using the reconciliation process which prohibits provisions that do not impact the federal budget. The legislatures, judiciaries, or governors in several states have established various regulations of collections related to stimulus payments under the American Rescue Plan
  • US household debt rose 1.4% in the fourth quarter 2020, according to the Federal Reserve Bank of New York. Household debt rose by $206 billion to $14.56 trillion as consumers took on mortgages to buy and refinance homes. Newly originated mortgages hit a record high in Q4, and auto loan originations reached their second-highest quarterly volume since 2020. Although credit card balances rose by $12 billion in Q4, they were $108 billion below year-ago levels, which is indicative of cardholders paying down balances and ongoing weakness in consumer spending. Consumers continue to benefit from government aid and forbearance programs for mortgages, student loans, and auto loans. As some consumers have fewer financial resources, mortgages, rent, and car payments are a priority so other bills may not get paid, leading to collections actions.
  • Collection agencies handle personal information and require data security. Allowing employees to work from home raises security issues. For instance, digital assistants, like Alexa and Google on your smartphone, can “hear” conversations that employees have with debtors regarding finances and personal information.
  • Healthcare providers are turning to collection agencies to recover cash for them. Recovering past due bills is growing in importance for healthcare providers.
  • Debt collection scams are on the rise in 2020. The FCC has launched the COVID-19 Consumer Warnings and Safety Tips website that aims to inform consumers about the rise in coronavirus-related phone and text scams.
  • A rise in subprime borrowers who have fallen behind on their car payments could signal some consumers are under increased financial stress due to the pandemic, according to The Wall Street Journal. In February 2021, nearly 11% of subprime borrowers with outstanding auto loans or leases were more than 60 days past due, according to TransUnion. February marked the sixth straight month of monthly increases. Consumers missing car and other debt payments could lead to increased demand for debt collection services.

May 3, 2021

  • More than 100 US colleges and universities are now requiring students to get Covid-19 vaccinations before they return to campus for the fall semester, according to CNN. Some schools have said they will make exemptions for medical, religious or personal reasons.
  • About 36% of adults under the age of 35 don't plan on getting vaccinated, according to a recent Quinnipiac University poll.
  • Plaintiffs in two class-action lawsuits filed against the University of Oregon claim that they should not have been required to pay on-campus fees if they haven't been on campus. Steve Berman, an attorney for the students in both cases, said his clients did not get the full value of what they paid for when campuses closed and switched to online sessions. The lawsuits claim that the schools have refused to refund or reimburse students for tuition and other fees they paid for "a comprehensive on-campus academic experience."
  • The American Rescue Plan coronavirus stimulus package signed into law in March by President Biden includes nearly $40 billion in new relief for students and colleges. Colleges and universities will be required to spend half of the relief money that they receive on emergency grants to students.
  • The number of people earning associate’s degrees from community colleges decreased 6.7% year-over-year within a few months of pandemic-related campus shutdowns, according to National Student Clearinghouse, which tracks college enrollment and completion. The number is at the lowest level since the 2012-2013 academic year. More than 40% of households said that a prospective student had cancelled all plans for community college as of October 2020, according to an analysis of US Census Bureau data.

April 22, 2021

  • The Small Business Administration will soon open applications for a new round of grant funding through the newly launched Restaurant Revitalization Fund. The $28.6 billion program will target businesses including bakeries, restaurants, bars, and food trucks. Eligible businesses can receive funding equal to their pandemic-related revenue loss up to $10 million per business. Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.
  • Retail sales in the grocery store industry increased 0.5% in value month over month on an adjusted basis but decreased 12% in value year over year on an unadjusted basis in March.
  • Krispy Kreme Doughnuts customers who show a valid COVID-19 vaccination card at any Krispy Kreme shop in the US can receive a free original glazed donut, every day through the end of the year. The chain also is also delivering free donuts to select vaccination centers throughout the country for a limited time.
  • Adoption of robotic technology is increasing at bakeries due in part to pandemic-induced social distancing and safety measures. Robots were first used in bakeries 20 years ago, according to Baking Business, but advances in size, mobility, adaptability, vision, controls and end-of-arm tooling are so significant that robots installed just five years ago are being replaced today. Emerging in importance are collaborative robots well-suited to address labor shortages and repetitive motion tasks at medium to smaller wholesale bakeries. Quality control methods, approaching that of artificial intelligence and machine learning, are being incorporated into large and small robots alike.
  • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
  • Employment at commercial bakeries decreased 3% year over year in February but was up 15% compared to the low of April 2020. Employment at retail bakeries decreased 6% year over year in February but was up 33.5% compared to the low of April 2020.

April 13, 2021

  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. As of April 4, the SBA had disbursed $746 billion of the $813.5 billion total appropriated for the PPP. Some $60 billion, or 21% of Round Three PPP funding, remains available. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Emergency lending programs have cut into the volume of traditional Small Business Administration (SBA) loans made, according to American Banker. Volume in the SBA’s 7(a) program is down 11% in the 2021 fiscal year from a year earlier, at $6.4 billion. The agency's fiscal year began on October 1. Lenders largely point to the prevalence of the Main Street Lending Program, which ended on January 8, and the January 11 return of the Paycheck Protection Program for the lower 7(a) volume. Many bankers have found it daunting to devote resources to both traditional and emergency loan efforts.
  • Cumulative net income at FDIC-insured commercial banks and savings institutions decreased 36.5% year over year during 2020, according to the Federal Deposit Insurance Corporation. Net income rose 9.1% year over year during Q4 2020, however. The Q4 result was much better than that of the first three quarters of 2020, as COVID-19 forced many business closures and stymied economic growth into the summer. Cumulative net income decreased 70% year over year during Q2 and 10.7% during Q3. Community banks, constituting 91% of all FDIC-insured institutions, reported a 21.2% cumulative net income increase during Q4.
  • Many banks say that they will need to continue increasing provisions for loan losses into 2021, according to a survey released in mid-November by IntraFi Network. Most banks have allowed borrowers to skip payments if their finances had been hit hard by lockdowns and other restrictions meant to slow the spread of the virus, but many of those grace periods have expired. Two-thirds of respondents said that they expect loans will need to be restructured for borrowers who are unable to make payments when their deferral periods end.
  • Employment in the commercial banking industry decreased 1.2% year over year in March.
  • The pandemic has accelerated the commercial lending industry’s transition to digital, according to Finextra. More banks are turning their software and infrastructure systems over to trusted IT partners, so they can focus more on business continuity, services and client relationships. Digital lending platforms have become critical for educating and connecting with clients, modifying lending arrangements and repayment, and monitoring compliance.

April 9, 2021

  • The pandemic-driven acceleration of e-commerce will be a key driver of a 9% reduction in the number of bricks-and-mortar stores by 2026, according to investment bank and financial services firm UBS. Locksmiths may benefit initially when stores close and locks are changed, but may suffer in the longer term if new retailers don’t move into the vacant spaces. "An enduring legacy of the pandemic is that online penetration rose sharply," UBS analysts said in early April. "We expect that it will continue to increase, which will drive further rationalization of retail stores, especially as some of the unique support measures from the government subside."
  • Corporate bankruptcies slowed in February, with 34 companies filing for protection during the month, down from 46 in January. The total of 80 for the first two months of 2021 is a slowdown from the 98 in the same period in 2020 and a slower clip than all but three of the prior 11 years, according to S&P Global Market Intelligence. Bankruptcies jumped to a 10-year high for the full year of 2020 as the coronavirus pandemic hammered already struggling companies.
  • The national office vacancy rate increased to 18.2% in Q1 from 17.7% in Q4 2020, according to Moody’s Analytics. Office vacancies had been trending around 15% to 16% nationally before the pandemic. Retail vacancy increased to 10.6% in Q1 from 10.5% in Q4.
  • The gradual disappearance of department and chain stores across the retail landscape, which has accelerated because of COVID-19, has put the existence of malls in jeopardy. Bankruptcies have plagued traditional anchor stores, like Sears and JC Penny, and Green Street forecasted that more than half of all mall-based department stores would close by the end of 2021. Smaller retailers often have co-tenancy clauses that allow them to pay reduced rent or even break the lease if two or more anchor stores leave a location. Apparel stores, a sector that has been especially hard hit by the pandemic. account for about 60% of occupied mall space, according to the New York Times.
  • Some firms are seizing on the coronavirus pandemic’s economic disruption to negotiate shorter leases at cheaper rents, according to The Commercial Observer industry news site. Companies that are not opting for traditional 10-year leases in Manhattan, for example, tend to be small and less tied to a specific office footprint, brokers say. Recent data suggest less interest in 10-year commitments even among larger companies. The average length of leasing deals of at least 100,000 square feet completed in 2020 through September in Midtown Manhattan, for instance, was 8.7 years, according to research from Colliers International. It was 12.5 and 12.7 years in 2018 and 2019, respectively, taking the years as a whole.
  • Fitch Ratings' CMBS delinquency rate fell 22 basis points to 4.33% in February 2021 from 4.55% in January due to strong resolution volume and slowing new delinquencies. It was the fourth consecutive month of decline. Fitch expects the delinquency rate to further improve given progress with additional fiscal stimulus and the acceleration in vaccinations. CMBS loan delinquencies had risen to 4.98% in July 2020, the highest level since April 2014, when the rate was 5.13%. The rate was 1.45% at the end of 2019.
  • Employment in the real estate industry decreased 1% year over year in March but was up 4.9% from the pandemic-related low of April 2020. Employment of real estate agents and brokers was unchanged year over year in February but was up 7% from the April 2020 low. Employment in the property management industry decreased 0.3% year over year in February but was up 4.4% from the April 2020 low.
  • Fitch Ratings expects the commercial mortgage-backed securities (CMBS) delinquency rate to be volatile, particularly during the first half of 2021. CMBS are fixed-income investment products that are backed by mortgages on commercial properties rather than residential real estate. The delinquency rate is the percentage of commercial real estate loans that were 30 or more days past due or in foreclosure. A rising delinquency rate indicates that an increasing number of commercial property owners cannot pay the mortgages on those properties. The volatility will be caused by the continuance and extent of government support measures, servicers' appetite for forbearance or modifications, efficacy of the COVID-19 vaccine rollout, and volume of CMBS new issuance. Any significant reduction in the overall rate will not occur before 2022.

May 12, 2021

  • Nonresidential construction starts increased 13% month over month in March to a seasonally adjusted annual rate of $235.3 billion. Institutional building starts increased 15% during the month fueled by gains in education, recreation, and public buildings. Commercial building starts increased 11% thanks to healthy gains across all commercial sectors. Manufacturing starts decreased 52% in March after strong levels during the previous two months.
  • Some analysts expect the Paycheck Protection Program (PPP) to run out of funding before the May 31 application deadline. Lenders and borrowers are asking for additional funding. Lawmakers allocated $284 billion to the program when it reopened in January. Sam Sidhu, chief operating officer of Customers Bank in Wyomissing, PA, estimates that $100 billion to $150 billion more would probably be enough funding for the PPP make it to May 31 with some money left over.
  • Excess office space resulting from the pandemic-driven rise in telecommuting may be converted into housing space. Likely candidates for conversion include aging, deteriorating or functionally and technologically obsolete office buildings; buildings in overbuilt areas or neighborhoods with falling real estate values and rising vacancy rates; and buildings far from public transit. Some buildings could be adapted for mixed-use, with one portion of a building preserved for offices and residential units occupying the remaining portion. Commercial construction firms experiencing low demand for new office space may benefit from the opportunity to convert these buildings.
  • The Dodge Momentum Index moved 8.6% higher in April to 162.4 (2000=100) from the revised March reading of 149.5. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. April’s gain marks the fifth consecutive monthly increase, and similar to February and March, was due to a large increase in institutional buildings entering the planning stage while commercial planning eased by less than one percent. Institutional planning has rebounded substantially since hitting its nine-year low in January, climbing 77% over the last three months. Healthcare and laboratory projects continue to dominate the sector, pushing institutional planning 50% higher on a year-over-year basis. Conversely, the commercial component has slipped in recent months as fewer warehouse projects have entered planning, though the sector is 21% higher than in April 2020. Overall, the Momentum Index is 31% higher than last April, which was the first full month of COVID-19 shutdowns.
  • Total commercial construction spending decreased 9.4% year over year on an unadjusted basis and 0.4% month over month on an adjusted basis in March.
  • Spending on nonresidential building projects is declining and will do so through 2021, according to a mid-year update to the American Institute of Architects’ (AIA) Consensus Construction Forecast. The AIA estimates an 8% spending drop in 2020 and just under 5% in 2021 due to pandemic-induced economic disruptions. This is the first time in nearly a decade that nonresidential construction spending has trended downwards, according to the AIA.
  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. The SBA approved 3.6 million loans worth $211.8 billion as of March 28, which covers about 75% of the $284 billion that was allocated to the program when it reopened in January. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Employment in the commercial building industry declined 2.3% year over year in March but was up 8.1% from the pandemic-related low of April 2020.

April 12, 2021

  • The national office vacancy rate, an indicator of demand for some types of commercial equipment, increased to 18.2% in Q1 from 17.7% in Q4 2020, according to Moody’s Analytics. Office vacancies had been trending around 15% to 16% nationally before the pandemic. Retail vacancy increased to 10.6% in Q1 from 10.5% in Q4 2020.
  • Rental equipment industry revenue will increase about 1.5% year over year in 2021, according to the American Rental Association. Revenue decreased 11.7% year over year in 2020. “With the government stimulus programs and the rollout of the vaccine, people are beginning to have more confidence. The equipment and event rental industry often recovers from adversity more quickly than the industries it serves, and it looks like this is happening again,” said John McClelland, Ph.D., ARA vice president for government affairs and chief economist.
  • Corporate bankruptcy filings increased in March to levels not seen since the worst days of the COVID-19 pandemic. Sixty-one companies entered bankruptcy proceedings in March, nearly doubling February's total of 34 and marking the highest one-month count since July 2020, according to S&P Global Market Intelligence data. As of March 31, 138 companies have announced bankruptcies so far in 2021. That is fewer than the 153 filings at the same time in 2020 and a slower pace than all but four of the prior 11 years — 2014, 2015, 2017 and 2018.
  • Permanent restaurant closures translate to loss of customers for commercial equipment rental and leasing firms. Restaurant closures also result in a flood of used equipment in the market that can undercut rentals and leases. More than 110,000 eating and drinking places were closed for business temporarily or for good as of December 1, 2020, according to the National Restaurant Association.
  • Construction spending increased 1.7% month over month on an adjusted basis and 5.1% year over year on an unadjusted basis in January, according to the US Census Bureau. Residential construction spending increased 2.5% month over month and 22% year over year in January. Nonresidential construction spending increased 0.9% month over month but decreased 6.6% year over year in January.
  • In this capital-intensive industry, firms acquire significant loan and credit burden to build rental inventory. With less income, many firms are struggling to pay lenders, making loan forbearance critical to survival.
  • Industry employment decreased 13.2% year over year in February.
  • United Rentals, the world’s largest equipment rental company, reported a 10.1% year-over-year rental revenue decline and a 12.1% year-year-over-year net income decline for Q4 2020 as it continued to deal with the disruption of the coronavirus crisis. All branches of United Rentals in the US and Canada have remained open during the pandemic, according to company officials.

April 12, 2021

  • Corporate bankruptcy filings increased in March to levels not seen since the worst days of the COVID-19 pandemic. Sixty-one companies entered bankruptcy proceedings in March, nearly doubling February's total of 34 and marking the highest one-month count since July 2020, according to S&P Global Market Intelligence data. As of March 31, 138 companies have announced bankruptcies so far in 2021. That is fewer than the 153 filings at the same time in 2020 and a slower pace than all but four of the prior 11 years — 2014, 2015, 2017 and 2018.
  • Up to 10,000 stores could close in 2021, according to Coresight Research. Retailers have announced 1,678 closures as of January 22. Coresight also forecasts that retailers will announce 4,000 store openings in 2021, driven by growth from grocery discounters and dollar store chains. Coresight tracked 8,741 closures in 2020, along with 3,304 openings.
  • Research firm Moody's Analytics says that retailers can expect increasingly favorable operating conditions in 2021 as the economy gradually rebounds from the effects of the Covid-19 pandemic. “Our current 2021 forecast is for 6.2% growth in core retail sales,” said Scott Hoyt, senior director of consumer economics for Moody’s Analytics.
  • Wholesale sales of professional and commercial equipment and supplies increased 9% month over month on an adjusted basis and 6.9% year over year on an unadjusted basis in February.
  • Employment in the commercial equipment wholesaling industry decreased 2.1% year over year in February but was up 2.8% from the pandemic-related low of April 2020.
  • The Foodservice Equipment Distributors Association (FEDA) is urging Congress to retain CARES Act tax rules that allow businesses to carryback net operating losses (NOL) for 2018-2020 and suspends limitations on excess business losses for non-corporate taxpayers. FEDA argues that these provisions are critical in helping the industry deal with economic pressure created by the COVID-19 pandemic.
  • COVID-19 has practically eliminated demand for new buffet and salad bar equipment. The FDA has recommended foodservice establishments suspend buffets and salad bars, due to their use of shared utensils and wait lines. Restaurants and grocery stores have converted their existing equipment into platforms for selling boxed and packaged foods.

April 13, 2021

  • The $1.9 trillion American Rescue Plan passed in March contains significantly less relief for the commercial fishing and seafood industries than the early 2020 CARES Act, according to the National Fisherman news site. The seafood industry was included in American Rescue Plan language under the agriculture section, which comes with a $4 billion set-aside to assist domestic food production and the supply chain in coping with ongoing COVID response and preparedness. The set-aside allocates $1.5 billion for food and commodity purchases, and grants or loans to seafood processors to cover expenses tied to pandemic protocols. It also has $4 billion in relief funds for the US Department of Agriculture to purchase and distribute commodities including seafood.
  • Two-fifths of commercial fishermen from Maine through North Carolina who participated in a Rutgers University survey did not go fishing from March through June of 2020. Of those who kept fishing, nearly all reported a decline in income compared with previous years. Those who kept fishing "... may have kept fishing to pay their bills or crew, or to maintain their livelihoods or their quotas until markets rebound," said main author Sarah Lindley Smith. "Most of the fishermen who stopped fishing during the early months of the pandemic planned to resume fishing instead of leaving the industry."
  • Seafood processing plants in Alaska, the top seafood processing state in the US, have emerged as COVID-19 hotspots, according to Bloomberg Government. Joe McLaughlin, the state epidemiologist, said that the outbreaks at seafood processing plants are “reminiscent of the meat packing plant outbreaks in the Lower 48.” The Food Supply Protection Act, which would help fishers and eligible seafood processors finance Covid-19 testing, personal protective equipment, and cleaning, among other expenses, was recently reintroduced in the US Congress.
  • Commercial fishing operations are waiting longer to get their boats repaired. Shipyards are staggering crews to meet distancing requirements, while making repairs. Longer wait times at port limit fishing opportunities and could affect a boats ability to fill its quotas and customer orders.

May 3, 2021

  • Some analysts expect the Paycheck Protection Program (PPP) to run out of funding before the May 31 application deadline. Lenders and borrowers are asking for additional funding. Lawmakers allocated $284 billion to the program when it reopened in January. Sam Sidhu, chief operating officer of Customers Bank in Wyomissing, PA, estimates that $100 billion to $150 billion more would probably be enough funding for the PPP make it to May 31 with some money left over.
  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • A majority of companies reported increasing business activity at the end of 2020, according to the NAPCO Research/PRINTING United Alliance COVID-19 Print Business Indicators Survey. Packaging firms generally fared better than commercial printing businesses, however. PRINTING United Alliance economists are holding to their projection of sales growth between 2.5% and 4% in 2021.
  • Corporate bankruptcy filings slowed in early April after increasing in March to levels not seen since the worst days of the COVID-19 pandemic. Eighteen companies entered bankruptcy proceedings in the first half of April, well behind the 31 recorded in early March, according to S&P Global Market Intelligence data. As of April 15, 155 companies have announced bankruptcies so far in 2021. That is fewer than the 180 filings at the same time in 2020 and a slower pace than all but three of the prior 11 years — 2014, 2015 and 2018.
  • Print volume, as measured by the consumption of printing substrates, decreased almost 10.4% year over year in 2020, according to market intelligence firm Smithers. The impact has been most severe on print publications —especially newspapers and magazines, according to Smithers. Lockdown orders and widespread homeworking has significantly reduced sales of printed media to commuters, and many more readers have switched to more instant online media channels.
  • Spending on print advertising will stabilize in 2021 after dropping in 2020, according to advertising consulting firm WARC. It will take at least two years for total advertising spending to recover, however.
  • Commercial printing industry employment decreased 11.7% year over year in February but was up 5.7% from the low of April 2020, according to the US Bureau of Labor Statistics.
  • Some commercial printers are investing in digital label printing equipment to take advantage of increasing demand created by the coronavirus pandemic. Label printing services are needed for items that companies began producing during the coronavirus crisis, like hand sanitizer. Labels can be printed for bottles, boxes, food products, health and wellness products, and other items. Demand has also increased for signs that promote social distancing, for directional signs, and for floor graphics that encourage customers to use specific traffic patterns.

April 26, 2021

  • Food banks are offering more mobile, delivery, and drive-thru options to assist vulnerable populations and observe social distancing guidelines. Earlier in the pandemic, food banks experienced long lines of cars as people stayed in their vehicles to social distance and workers brought food to them. Food banks are discouraging the donation of food from individuals, and instead are asking for monetary donations so they can purchase food from food distributors and commercial suppliers.
  • Key concerns include increased demand due to job loss, reduced availability of food service employees and volunteers due to illness, and insufficient food collection and storage capability. Food banks have been overwhelmed as demand for food in many cases has more than doubled. Prior to the pandemic, more than 35 million people in the US were food insecure, including more than 10 million children. Due to COVID-19, Feeding America estimates the number of food insecure Americans may have risen to more than 50 million in 2020, including 18 million children. Between April to December 2020, US food banks distributed about 50% more food than they did during the same period in 2019, according to Feeding America.
  • An improving economy and government stimulus programs may reduce demand for community food services. The March jobs gains outperformed Dow Jones estimates of 675,000, and marked the best monthly job growth since August 2020. A more robust economy and an accelerated vaccine rollout helped boost jobs across the board but sectors hardest hit by the pandemic saw the strongest growth, including leisure and hospitality, education, and construction. However, in March 2021 there were still 7.9 million fewer employed people than there were in February 2020.  A second round of stimulus relief was passed in December. The $900 billion spending bill included $600 stimulus checks per person, including children and extended supplemental unemployment benefits. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act. In addition to the one-time payments of $1,400 per individual, and another $1,400 for each dependent, many Americans may also receive an existing tax credit that will give most families with children a monthly payment of $300 per child. Payments are to start in July. The benefit is set to expire at the end of the year, but the Democrats aim to make it permanent. The bill also extends the $300 supplemental unemployment benefit through September 6, 2021 and opens jobless benefits to millions more Americans.
  • As demand has gone up, community food services’ budgets are becoming strapped. The gap between demand and food supplies is projected to be as high as 10 billion pounds of food through June 2021, according to Feeding America. Solutions by some community food services include public-private partnerships with online retailers already logistically positioned to deliver; and staggered, and therefore socially distant, feeding schedules for schoolchildren and others in need.
  • Congress allocated $850 million in food aid through two stimulus measures passed in March. Stimulus efforts also included $3 billion for the Farmers to Families Food Box Program. The program – which was extended as part of the Consolidated Appropriations Act passed in December 2020 – aimed to help struggling farmers by paying them to provide produce, meats, and dairy products to the hungry. Citing inefficiencies and high costs, the USDA is winding down the Farmers to Families Food Box program by the end of April 2021. It is being replaced by a new USDA food box program that will provide fresh produce through The Emergency Food Assistance Program (TEFAP) and be distributed to those in need by local foodbanks.
  • The Summer Food Service Program (SFSP), which provides USDA-funded reimbursement to school districts and food aid organizations to feed children during the summer, received a waiver from the USDA to provide meals to kids during the pandemic. Under the waiver the SFSP can feed kids regardless of age or district enrollment. In October, the USDA moved to extend SFSP through June 2021.
  • Individual communities are using mapping software to help people locate food banks and provide information about hours of operation and how the food distribution process works. Such tools are helping community food aid organizations connect with people who have never used food banks before. By leveraging US Census and other data, mapping technology is also being used to pinpoint areas in a community with the greatest need for food aid. Mapping data can also help with identifying trends across distribution locations which can help solve complex logistics challenges like the best storage spots for various types of foods and demand cycles for different food items.
  • In February, the Biden administration announced it would distribute about 25 million masks to more than 1,300 community health centers and 60,000 food pantries and soup kitchens across the US. The masks will be available between March and May, are washable and are free for anyone who wants one.

April 12, 2021

  • A larger share of distressed companies upended by the COVID-19 pandemic is using court processes to restructure instead of close, according to S&P Global Market Intelligence. Nearly 62% of corporate bankruptcy filings in 2020 sought reorganizations, the highest rate for any year going back to at least 2010. Companies were less likely to liquidate in 2020, a departure from 2019 and 2018 when corporate liquidations outpaced reorganizations in bankruptcy filings. As of March 30, the share of filings seeking restructuring is larger in 2021 than in 2020.  S&P analysts note that government stimulus and easy access to capital have kept at-risk companies from entering bankruptcy following a jump in filings during the early months of the pandemic in in 2020, but bankruptcies are likely to pick up again later in 2021 as companies confront the aftershocks of the pandemic.
  • Corporate bankruptcy filings increased in March to levels not seen since the worst days of the COVID-19 pandemic. Sixty-one companies entered bankruptcy proceedings in March, nearly doubling February's total of 34 and marking the highest one-month count since July 2020, according to S&P Global Market Intelligence data. As of March 31, 138 companies have announced bankruptcies so far in 2021. That is fewer than the 153 filings at the same time in 2020 and a slower pace than all but four of the prior 11 years — 2014, 2015, 2017 and 2018.
  • Increasing availability of COVID-19 vaccines may not immediately result in a return to the workplace. Health officials have stressed that even with effective vaccines, many of the same safety protocols will have to remain in place until there is clear herd immunity. There are growing concerns that virus mutations will slow the process. President Biden said in early February that wearing masks "though the next year" can save a significant number of lives.
  • The NAIOP Research Foundation projects a period of negative office space absorption through late 2020 and early 2021. “Given the continued challenges facing the US economy, office net absorption is forecast to be negative 18 million square feet in Q4 2020 and negative 10 million square feet in Q1 2021,” according to the forecast. “The coronavirus pandemic has led to conditions that are remarkably different from past recessions but are nonetheless challenging for the office sector.”
  • Wholesale sales of computer and peripheral equipment increased 15% month over month on an adjusted basis and 12.2% year over year on an unadjusted basis in February.
  • Computer shipments by manufacturers rose 25% year over year in Q4 2020 and 11% for the full year, the fastest growth in a decade, according to technology research company Canalys. Industry experts cite the pandemic-induced increase in telecommuting and distance education as the key cause of shipment growth.
  • Office equipment distributor employment decreased 7.% year over year in February but was up 0.4% from the pandemic-related low of June 2020. Computer and software distributor employment was unchanged year over year in February but was up 4.1% from the pandemic-related low of May 2020.

April 12, 2021

  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. As of April 4, the SBA had disbursed $746 billion of the $813.5 billion total appropriated for the PPP. Some $60 billion, or 21% of Round Three PPP funding, remains available. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Health officials have stressed that even with effective vaccines, many of the same safety protocols will have to remain in place until there is clear herd immunity. There are growing concerns that virus mutations will slow the process. President Biden said in early February that wearing masks "though the next year" can save a significant number of lives.
  • The national office vacancy rate, an indicator of demand for computer and office equipment repair, increased to 18.2% in Q1 from 17.7% in Q4 2020, according to Moody’s Analytics. Office vacancies had been trending around 15% to 16% nationally before the pandemic. Retail vacancy increased to 10.6% in Q1 from 10.5% in Q4 2020.
  • The NAIOP Research Foundation projects a period of negative office space absorption through late 2020 and early 2021. “Given the continued challenges facing the U.S. economy, office net absorption is forecast to be negative 18 million square feet in Q4 2020 and negative 10 million square feet in Q1 2021,” according to the forecast. “The coronavirus pandemic has led to conditions that are remarkably different from past recessions but are nonetheless challenging for the office sector.”
  • Moody’s Analytics expects the national office vacancy rate to reach 19.9% in 2021 and 20.0% in 2022, then rise past historic highs within the next few years.
  • Employment in the computer and office machine repair industry decreased 1.3% year over year in February but was up 13.8% from the pandemic-related low of April 2020.
  • Some consumers are turning to online resources to troubleshoot and fix problems with their devices. IFIXIT publishes tutorials and manuals online for consumers to fix their own equipment and is a growing source of competition for computer and office equipment repair firms.er the coronavirus subsides and more workers need home-based office equipment, such as printers, postage machines, and computer systems, maintained and repaired.
  • Because technicians typically make repairs at customers’ sites, firms have developed protocols to protect technicians in the field, such as using PPE and contactless billing. Repair services are also making greater use of video and audio chats to walk customers through troubleshooting and minor repairs.

May 3, 2021

  • PC shipments increased 32% year over year during Q1, according to Gartner. It was the highest rate the research firm has seen since it started tracking it in 2000. PC shipments fell sharply in the early days of the Covid-19 pandemic, which may account for some of the year-over-year growth but the Q1 increase occurred on an absolute basis as well: Total PC shipments were the highest they've been since 2015.
  • Computer and peripheral manufactures remain largely unaffected by the semiconductor chip shortage, according to The New York Times. Some older device models may be in short supply at any given moment, but that’s because semiconductor manufacturers like AMD are focusing on higher-end, more profitable chips, so budget chips are in shorter supply. AMD has said that it is increasing chip production capacity so it can meet demand in the second half of 2021.
  • Gartner predicts worldwide smartphone sales to end users will rebound to pre-pandemic levels in 2021, thanks largely to delayed purchases of 5G devices.
  • Computer and peripheral manufacturing industry employment increased 1.3% year over year in March, according to the US Bureau of Labor Statistics.

April 28, 2021

  • To keep abreast of the latest tech developments and maintain certifications, IT professionals need continuing education on a regular basis. Industry resources like CompTIA and others are offering online training and certifications for people who have shifted to working from home.
  • Although all US states are in various stages of reopening, working from home is expected to be much more common even after the pandemic subsides. Tech support for workers may shift to a remote model instead of supporting users in an office setting. As working from home becomes more common, companies of all kinds will need to make investments in secure networks, which may drive demand for computer facilities management services. As some workers return to offices, companies will also seek to find the right blend of technologies that seamlessly support workers who are at home and those who are in the office. Quickly shifting to work from home (WFH) models may create data security and compliance issues. Company and customer data making its way to “shadow IT” systems due to employees working from home can increase business and regulatory risk.
  • About 38% of small business owners in the US and Canada say they are experiencing a negative impact due to the COVID-19 pandemic, according to an April 2021 survey by Alignable, a social media outlet for small business owners. The April results were a significant improvement over Alignable’s March survey which indicated 58% of businesses were negatively impacted. Increased availability of vaccines has improved the outlook of many small businesses. The percentage of respondents that reported being fully reopened rose above 60% for the first time since October, reversing five consecutive months of declines. Despite the pandemic, the number of new businesses being created is increasing. New business applications were up 3.4% in March 2021 compared to February, according to the US Census Bureau. Improving optimism among small businesses and rising business formations could boost demand for IT services.
  • Amid the coronavirus pandemic and worldwide economic slowdown, global IT spending fell 3.2% to just under $3.7 trillion in 2020 compared to 2019, according to Gartner. All major categories of IT spending declined except for data center systems, which was flat. Devices saw the biggest decline with a dip of 8.2%, followed by IT services (-2.7%), enterprise software (-2.4%), and communications services (-1.7%). Gartner expects IT spending to bounce back to 8.4% growth in 2021; IT services spending is projected to rise 9% and reach more than $1.1 trillion. As companies accelerate their digital transformations, IT spending is increasingly viewed as a vital contributor to the bottom line rather than a back-office expense, according to Gartner. Gartner expects global IT spending by governments to increase 5.1% to $482.8 billion in 2021. Responding to and recovering from the COVID-19 pandemic, including the management of vaccine distribution, will drive governments to spend more on their digital transformations. Global government spending on IT services is projected to rise 5.4% in 2021 to more than $168 billion.
  • As the economy continues to recover, IT services companies may target specific industry verticals that fared better during the pandemic. Energy, healthcare, legal, and financial services are moving to digitally transform quickly, according to industry insiders. Smart manufacturing is another key growth area. Internet of things (IoT) consulting and implementation are projected to be in high demand. The number of industrial IoT connections is forecast to rise from 17.7 billion in 2020 to 36.8 billion by 2025, according to Juniper Research. Even industries that were more negatively affected by the pandemic will need IT enhancements to survive. Retailers need to enhance ecommerce capabilities, and media/entertainment is spending on tech to pivot toward the new ways entertainment is consumed.
  • As IT spending continues to rebound in 2021 and businesses look to accelerate their digital transformations, IT services providers may seek to expand their service offerings to remain competitive, according to TechTarget. A wider breadth of services can help managed services providers (MSPs) build collaborative relationships with client company CIOs. Information executives are expected to look to nimble workforce strategies, which may lead to opportunities for companies that provide IT outsourcing services. Enterprises may use contract or temporary workers to help with setting up collaboration platforms, cloud technologies, and network solutions. In-demand occupations include IT security professionals, cloud architects and engineers, digital business and AI architects, and robotic process automation (RPA) engineers.
  • The pandemic changed the IT landscape in ways that are likely to be permanent, according to CIO.com. Adapting to remote work, rapid shifts in consumer behavior, and other challenges prompted IT leaders to learn that agility and resilience are of greater concern than pure cost. Many firms also learned their plans for digital transformation could be implemented at rates previously thought impossible. Leaders in IT may also have increased their tolerance for risk when adopting new technologies. With the knowledge that IT projects can move more quickly, organizations will be less tolerant of long lead times and delays.
  • As the economy continues to recover, firms are expected to ramp up IT hiring to help support their digital initiatives. About 55% of CIOs aim to increase their number of full-time IT employees, according to a recent survey by Gartner. Key areas of hiring growth include automation, security, cloud and analytics platforms, and increasing support for remote work. Network administration and data center operations are the only IT categories where CIOs expect to see negative hiring trends in 2021.

May 3, 2021

  • Corporate bankruptcy filings slowed in early April after increasing in March to levels not seen since the worst days of the COVID-19 pandemic. Eighteen companies entered bankruptcy proceedings in the first half of April, well behind the 31 recorded in early March, according to S&P Global Market Intelligence data. As of April 15, 155 companies have announced bankruptcies so far in 2021. That is fewer than the 180 filings at the same time in 2020 and a slower pace than all but three of the prior 11 years — 2014, 2015 and 2018.
  • Computer programming services may benefit from the pandemic-driven interest in the reshoring of manufacturing. Industry experts say that by creating software-driven autonomous and automated manufacturing solutions, it is possible to substantially reduce the labor cost element in manufacturing, allowing higher labor cost regions to bring manufacturing home. This is extremely timely given the desire of most nations to use manufacturing as part of their post-pandemic recovery strategy.
  • Low-code and no-code development accelerated in 2020 because of the coronavirus pandemic, according to the Tech Target industry news site. The terms low-code and no-code describe visual tools that reduce the amount of code that must be written during application development. Widely-used tools include automated business process generators, AI, and middleware. The pandemic has accelerated adoption and interest in these tools as companies have scrambled to provide apps, web forms, and automated workflows to replace in-person services, said Gartner vice president and analyst Jason Wong. Gartner predicts that low-code will account for 65% of all application development activity by 2024, although 75% of these projects will involve small and medium-scale efforts that target non-mission-critical workloads.
  • Computer programming services may focus on shifting enterprise software development to cloud-based platforms due to the pandemic-driven acceleration of the move from on-premises data centers to data centers operated by cloud service providers and colocation specialists. “By the end of 2021, based on lessons learned, 80% of enterprises will put a mechanism in place to shift to cloud-centric infrastructure and applications twice as fast as before the pandemic,” market tracker International Data Corporation (IDC) said. Enterprise spending on cloud infrastructure services increased 33% year over year in Q3 2020, according to Synergy Research Group.
  • Healthcare and computing industry experts are concerned that a lack of transparency in and collaboration on development of artificial intelligence (AI) tools may be impacting COVID-19 patient care. Some institutions have not published any results showing whether their models work, according to healthcare industry news site Stat. Concerns have also been raised about the generalizability of a given model, especially one that is tested and trained only on local data. A study published in the November 2020 issue of Nature Machine Intelligence revealed that a Covid-19 deterioration model successfully deployed in Wuhan, China, yielded results that were no better than a roll of the dice when applied to a sample of patients in New York.
  • Computer programming services industry employment decreased 0.7% year over year in February, according to the US Bureau of Labor Statistics.

April 28, 2021

  • Artificial intelligence (AI) is being used in a variety of ways in response to the coronavirus outbreak, which could create opportunities for computer system design services firms. UK-based BenevolentAI used its platform to analyze a massive trove of biomedical data through machine learning to make connections that led to identifying existing drugs that could be effective in treating COVID-19 patients. BenevolentAI’s technology identified an Eli Lilly drug called barcitinib that might help COVID-19 patients. When tested on patients, barcitinib contributed to a 71% reduction in deaths among those with moderate to severe cases on COVID-19. Scientists are also using AI to reveal patterns is various data from patients infected with COVID-19 to discover why some barely experience any symptoms and others die. AI may also help doctors and scientists better understand how the novel coronavirus interacts with preexisting ailments to affect the immune system, which could lead to better outcomes for vulnerable patients. Machine learning has helped scientists at the University Oxford develop a new type of COVID-19 test that can return results in under five minutes and requires no sample preparation. The scientists believe the technology’s hardware can be miniaturized so the device can be used in places such as airports, business, and music venues. The testing device is being developed into a commercial product that could be available sometime in 2021.
  • In a July hearing by the House Subcommittee on Government Operations, lawmakers heard from technology experts how outdated IT systems used in various federal government agencies delayed stimulus aid disbursements and other critical services. Experts referenced computer systems that are several decades old. House subcommittee members suggested legacy IT systems led to small businesses being unable to apply for loans through the Small Business Administration and as many as 40% of unemployment benefit claims to be unsuccessful. Experts say federal agencies need to leverage modern private sector technologies to speed up IT modernization efforts. High numbers of new unemployment claims have also crashed antiquated IT systems on the state level. Many states’ computer systems for managing unemployment benefits are more than 40 years old. The CARES Act, nor the more recent stimulus package passed in December, provide any funding to states for modernization of state unemployment benefit IT systems. More attention to inefficient legacy systems could lead to opportunities for computer system design firms. Globally, IT spending by governments in 2021 is expected to rise 5.1% to $482.8 billion, according to Gartner. Responding to and recovering from the COVID-19 pandemic, including the management of vaccine distribution, will drive governments to spend more on their digital transformations. Global government spending on devices is projected to increase 5.6% and reach $34.8 billion.
  • About 38% of small business owners in the US and Canada say they are experiencing a negative impact due to the COVID-19 pandemic, according to an April 2021 survey by Alignable, a social media outlet for small business owners. The April results were a significant improvement over Alignable’s March survey which indicated 58% of businesses were negatively impacted. Increased availability of vaccines has improved the outlook of many small businesses. The percentage of respondents that reported being fully reopened rose above 60% for the first time since October, reversing five consecutive months of declines. Despite the pandemic, the number of new businesses being created is increasing. New business applications were up 3.4% in March 2021 compared to February, according to the US Census Bureau. Improving optimism among small businesses and rising business formations could boost demand for computer systems design services. US employment in the computer systems design services industry was down about 0.6% in February 2021 compared to year-ago levels.
  • Amid the coronavirus pandemic and worldwide economic slowdown, global IT spending fell 3.2% to just under $3.7 trillion in 2020 compared to 2019, according to Gartner. All major categories of IT spending declined except for data center systems, which was flat. Devices saw the biggest decline with a dip of 8.2%, followed by IT services (-2.7%), enterprise software (-2.4%), and communications services (-1.7%). Gartner expects IT spending to bounce back to 8.4% growth in 2021; device spending is projected to rise 14%. As companies accelerate their digital transformations, IT spending is increasingly viewed as a vital contributor to the bottom line rather than a back-office expense, according to Gartner.
  • At the onset of the pandemic, many organizations increased IT security spending as they implemented distributed IT and work-from-home environments, according to a recent IDG Research Services survey commissioned by Insight Enterprises. The rapid transition to work-from-home brought new security challenges across cloud, edge, and on-premise computing environments. Even after beefing up IT security spending amid the pandemic, 80% of senior IT and IT security leaders feel their organizations have insufficient protection from cyberthreats. More than 90% of organizations surveyed said they planned to increase cybersecurity spending in 2021. Demand for computer system design services may increase as organizations address the constantly evolving nature of cyberthreats and their potential impact on distributed IT environments.
  • The ways the pandemic affected work, school, and home life will continue to drive global computing device demand in 2021 and 2022. The installed base of devices will rise 2.3% to more than 6.2 billion in 2021 over 2020, according to Gartner. The shift to remote work and school is expected to continue to erode demand for desktop computing. However, the number of laptops and tablets in use in 2021 will rise 8.8% and 11.7%, respectively. The number of smartphones in use in 2020 fell 2.6% compared to 2019, but increased product variety and more affordable 5G models will drive upgrades and a 1% increase in 2021. The global installed base of computing devices is forecast to rise 3.2% in 2022 over 2021 to 6.4 billion units.

April 8, 2021

  • All 50 states have either opened coronavirus vaccinations to everyone eligible under US Food and Drug Administration emergency use authorizations, or have announced when they plan to do so. Concrete and mansonry contractors will benefit from reduced risk of worker infections. For all states currently vaccinating anyone 16 and older, people ages 16 or 17 can only receive a Pfizer/BioNTech vaccine, as it is the only option authorized for use in that population so far. The vaccines made by Moderna and Johnson & Johnson are authorized for use in adults 18 and older.
  • Demand for new houses continues to outstrip supply, according to The Associated General Contractors of America. A record percentage of new-home sales in late February was of houses that have not even broken ground, which virtually guarantees homebuilding will remain vibrant for the next several months, if not longer.
  • Industrial facility construction completions will increase 29% year over year in 2021, according to commercial real estate services and investment firm CBRE Group. Large facilities in the 500,000-square-foot range will account for the majority of new product. Demand growth that began in 2020 will continue in intermodal hubs like the Inland Empire, Dallas, Houston, Chicago, and Atlanta markets. Demand for local infill space will also continue, spurred by the likes of Amazon, Walmart, Target, Best Buy and Costco.
  • Attorneys at Atlanta-based law firm Fisher Phillips told contractors that it is within their legal rights to compel workers to get vaccinated against COVID-19. Requiring construction workers to get a coronavirus vaccination is comparable to existing rules for healthcare workers that make flu shots mandatory in order to protect all patients and staff and keep the workplace safe, the attorneys said. The attorneys also recommended that contractors set up programs to administer vaccines on jobsites, during work hours, and free of charge, in order to get the highest participation possible while ensuring projects continue to move forward.
  • Construction workers are five times more likely to be hospitalized with COVID-19 than their peers in other professions, according to a University of Texas at Austin study. Lauren Ancel Meyers, one of the study authors, said that the findings don’t necessarily mean construction work needs to stop. “It means we need to go to great lengths to ensure the health and safety of workers when they do go to work.”
  • Total construction spending decreased 0.8% month over month on an adjusted basis but increased 3.4% year over year on an unadjusted basis in February, according to the US Census Bureau. Residential construction spending decreased 0.2% month over month but increased 19.7% year over year in February. Nonresidential construction spending decreased 1.3% month over month and 7.8% year over year in February.
  • Employment in the specialty trade contracting industry decreased 1.4% year over year in March but was up 13.5% from the pandemic-related low of April 2020.
  • The number of building permits issued decreased 10.8% month over month but increased 17% year over year in February. Housing starts decreased 10.3% month over month and 9.3% year over year in February. Housing completions increased 2.9% month over month and 5% year over year in February.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, decreased to 82 in March from 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. The outlook for home sales in six months increased to 83 from 80, while the outlook for buyer traffic was unchanged at 72.
  • The prices that concrete and masonry contractors paid for ready-mix concrete increased 0.3% month over month and 0.8% year over year in February.

April 23, 2021

  • A letter addressed to congressional leaders of both parties and to White House officials from groups representing some of the world’s biggest technology companies argues against specifying what kind of semiconductor manufacturing should get federal financial support for domestic expansion. The letter specifically objects to requests from some companies that are seeking an increase of manufacturing capacity for more basic chips used in machinery and vehicles. “The market-distorting effect of ‘setting aside’ a portion of new capacity for legacy chips for any single, private sector would squeeze the remaining chip-consuming industries into the remaining new manufacturing capacity, artificially constraining supply,” the letter states. Industry experts say that pandemic-related supply chain problems have boosted support for federal funding of domestic semiconductor manufacturing.
  • About 88% of equipment manufacturers report a positive outlook for 2021, according to a new survey released by the Association of Equipment Manufacturers. More than half (55%) of the respondents expect sales to increase or remain stable despite the ongoing impact of the global pandemic.
  • The ongoing semiconductor chip shortage is expected to spread beyond the auto industry, and may ultimately affect production of construction machinery. Industry experts say that the shortage is likely to affect some industries more than others. A significant portion of demand has shifted from auto and machinery manufacturers to consumer electronics and computer manufacturers. The entire auto industry, for example, spends around $40 billion per year on chips, about a tenth of the global market. Apple, by comparison, spends more on chips just to make its iPhones, according to banking and financial firm Mirabaud tech analyst Neil Campling. The chips used in cars and machinery also tend to be basic products such as micro controllers made under contract at older foundries, not the leading-edge production technology in which chipmakers would be willing to invest.
  • Construction equipment unit sales are expected to have fallen 18% in 2020 due to COVID-19 impacts, but are set to grow at a compound annual growth rate of 0.84% for the next ten years, according to Frost & Sullivan.
  • Total construction starts will increase 4% in 2021, according to Dodge Data & Analytics. "The dollar value of starts for residential buildings will increase 5% in 2021, nonresidential buildings will gain 3%, and nonbuilding construction will improve 7%. Only the residential sector, however, will exceed its 2019 level of starts thanks to historically low mortgage rates that boost single family housing,” said Richard Branch, Chief Economist for Dodge Data & Analytics.
  • Interest in autonomous construction technology is increasing as the ongoing construction industry labor shortage is compounded by the coronavirus pandemic. Among the more promising developments is artificial intelligence guidance systems. The systems may be built into new construction machinery or retrofitted to existing machinery, allowing machines to work without a human operator. Interest is highest among major construction firms that have the infrastructure, support, and internal innovation teams to dedicate to implementing the technology. Manufacturers including Built Robotics, Cyngn, Fastbrick Robotics, and Caterpillar are current leaders in the sector.
  • Shipments of construction machinery increased 2% in value year over year in February, according to the US Census Bureau.
  • Construction machinery industry employment decreased 4% year over year in February, according to the US Bureau of Labor Statistics.
  • Total construction spending decreased 0.8% month over month on an adjusted basis but increased 3.4% year over year on an unadjusted basis in February, according to the US Census Bureau. Residential construction spending decreased 0.2% month over month but increased 19.7% year over year in February. Nonresidential construction spending decreased 1.3% month over month and 7.8% year over year in February.

April 12, 2021

  • Many analysts say that consumer electronics repair services should prepare for an upcoming pandemic-related spending shift that is increasingly referred to as revenge shopping. Consumers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time. The bounce back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues. Electronics repairs may be skipped in favor of experience-based purchases as a result.
  • President Biden signed the $1.9 trillion American Rescue Plan Act coronavirus relief package into law in early March, directing a third round of stimulus checks to most Americans. Consumer electronics repair services may be negatively impacted if consumers use the funding to replace rather than repair devices. The aid comes as millions of Americans struggle to pay for food and housing, and face the loss of eviction protections that expire at the end of March 2021. The Senate bill directs $1,400 payments to individuals earning up to $75,000, but cuts off eligibility for single people earning more than $80,000. For couples who file a joint federal income tax return, the phase-out begins at those making $150,000 and ends at $160,000.
  • uBreakiFix, which currently specializes in repairing personal electronics at its corporate and franchise stores, launched a mobile repair service that sends a technician to a customer's house to fix their broken devices. Customers schedule an appointment for a technician to visit their home, office, or other location. The repairs are performed in a mobile repair vehicle.
  • Mass retailer Walmart is setting up in-store kiosks at which consumer electronics repair services will be offered as a pilot program. The company hopes to have kiosks at 50 locations by the middle of 2021, and shoppers in areas with the service will be able to access it online. The kiosks will be staffed by True Network Solutions, which is partnering with the retailer to provide the service.
  • Many consumer electronics repair businesses closed during the quarantine, but those that stayed open have experienced an increase in demand as more people work, video chat, and game at home. Repairs of webcams have increased as more people attend virtual meetings and visit online.
  • Repair services are making greater use of video and audio chats to walk customers through troubleshooting and minor repairs. Firms are also offering touchless exchanges of devices and curbside pickup. Customers are urged to make appointments to minimize the number of people in repair shops and allow for social distancing.
  • Some consumers are turning to online resources to troubleshoot and fix problems with their devices. iFixit houses over 63,800 free manuals and 165,657 repair solutions for over 29,608 devices. DIY repairs can result in fewer job tickets for shops, but can also result in higher priced repairs if DIY attempts fail and create more damage.

April 26, 2021

  • Consumer lending firms are facing competition from other lenders and the Small Business Administration. Federal regulators relaxed rules issued in 2013, allowing banks to provide small-dollar loans. Advocates argue that it’s better that banks issue small-dollar loans than other financial institutions, such as high-interest payday lenders. Bank of America (BofA) offers a new short-term loan program called Balance Assist. The loan product allows BofA customers who have had a checking account for at least a year to borrow up to $500 for a flat fee. The loans are to be repaid over 90 days in three equal installments. BofA launched Balance Assist in January 2021 and it is available in more than 40 states.
  • Industry trade associations, the Community Financial Services Association of America (CFSA) and the Online Lenders Alliance (OLA), are directing consumer lending firms to provide flexibility to customers who lost their jobs or had hours cut due to the coronavirus outbreak. CFSA suggest leniency on collecting past due accounts, restructuring or suspending loan payments. OLA suggests delaying delinquency notice and negative credit reports.
  • State and local authorities are issuing guidance and warnings to consumer lenders regarding their business practices. Consumer protection groups including Americans for Financial Reform and the Center for Responsible Lending have called for a cap of 36% on annual percentage rates for consumer loans to be included in any additional COVID-19 relief legislation. Opponents to the cap say it’s impractical for small-dollar lenders and would deny consumers access to much-needed loans.
  • In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act. The plan’s direct payments to consumers and further extensions of federal unemployment benefits could reduce demand for short-term payday loans. In addition to the one-time payments of $1,400 per individual, and another $1,400 for each dependent, many Americans may also receive an existing tax credit that will give most families with children a monthly payment of $300 per child. Payments are to start in July. The benefit is set to expire at the end of the year, but the Democrats aim to make it permanent. The bill also extends the $300 supplemental unemployment benefit through September 6, 2021 and opens jobless benefits to millions more Americans.
  • In early September, the Centers for Disease Control and Prevention (CDC) issued a moratorium on evictions for some renters through the end of 2020. The stimulus package passed in December extended the moratorium on evictions through January 31. On January 20, President Biden signed an executive order further extending the moratorium until at least March 31, 2021. Two days before the executive order was set to expire, the CDC extended the eviction moratorium through the end of June 2021. The moratorium could decrease the need for payday lending in the short term, but drive the need for loans when the moratorium is eventually lifted and back rent is due. The moratorium has faced six legal challenges. In three of the cases federal judges supported the ban, in the other three, judges called the moratorium illegal.
  • In July, a final rule from the Consumer Financial Protection Bureau (CFPB) rescinded an Obama-era provision that would have required payday lenders to ensure borrowers can pay back loans by verifying information like rent amounts, incomes, and student loan payments. The industry has argued the verification requirements were onerous and too costly. Critics say the final rule may put more consumers into a spiral of debt at a time when 25% of Americans have seen their incomes drop due to the coronavirus pandemic. In late October, the National Association for Latino Community Asset Builders (NALCAB), represented by Public Citizen and the Center for Responsible Lending (CRL) sued the US CFPB in US District Court to overturn the final ruling in July that removed the Obama-era protections. The lawsuit claims the ruling is unlawful under the Administrative Procedure Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Rohit Chopra, President Biden’s pick to head the CFPB, has said that if he is confirmed, one of his priorities will be to ensure payday lenders assess their customers’ ability to repay loans, according to The Wall Street Journal.
  • In February, the Better Business Bureau (BBB) issued a statement urging consumers to exercise caution when using payday and cash advance apps to obtain loans. The BBB suggested consumers understand how cash advance loans work, either directly with consumers or through the customer’s employer, and what fees are included. Other tips included checking the lender’s reputation on the BBB website, and avoiding cash advance apps claiming to be totally free – such apps typically have hidden fees and other costs.

April 23, 2021

  • Real disposable income, an indicator of demand for discretionary purchases, decreased 8.2% in February following an 11% increase in January. The January increase, the largest increase in 9 months, was driven in large part by government transfer payments, which rose 52% in January from the prior month, reflecting both stimulus checks and the supplemental $300 weekly jobless benefit payments. Consumer spending decreased 1% in February, following a 2.4% increase in January. Spending and income are expected to rebound in the coming months as more people become vaccinated.
  • President Biden signed the $1.9 trillion American Rescue Plan Act coronavirus relief package into law in early March, directing a third round of stimulus checks to most Americans. Consumer products rental firms are likely to benefit if the plan helps boost consumer spending by stabilizing consumer finances. The aid comes as millions of Americans struggle to pay for food and housing, and face the potential loss of eviction protections. The Senate bill directs $1,400 payments to individuals earning up to $75,000, but cuts off eligibility for single people earning more than $80,000. For couples who file a joint federal income tax return, the phase-out begins at those making $150,000 and ends at $160,000.
  • A third round of $1,400 checks would allow nearly 23 million adults to pay their expenses for more than four months without going into more debt or using their savings, according to Morning Consult economist John Leer.
  • The Knot’s annual wedding study predicts that 2021 and 2022 will be among the busiest years for weddings. Demand for formal wear and other wedding-related products is likely to increase as a result. Nearly half of the couples (47%) who planned to marry in 2020 but postponed have rescheduled for 2021 and later dates. A majority of couples who got engaged during the pandemic (73%) also set their wedding date for 2021. A third of couples who married in 2020 expect to have big celebrations when the Centers for Disease Control and Prevention ends restrictions larger gatherings.
  • The weekly number of new unemployment claims, considered a bellwether for the health of the labor market, has fallen below the pre-pandemic record of 695,000. First-time jobless claims totaled 547,000 in the week ending April 17, a decrease of 39,000 from the previous week's revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. New weekly claims were typically a little over 200,000 before the pandemic. The unemployment rate has dropped from its peak in April 2020 but was 6% in March compared with 3.5% before the pandemic.
  • Low-income households ($15,000 to $50,000 annual income) account for over 80% of rent-to-own customers and may be more likely to default or miss payments during periods of financial distress.
  • The University of Michigan’s consumer sentiment index, a measure of consumer confidence, increased to 83 in March from 76.8 in February. It was the highest reading since the coronavirus pandemic hit the US. Higher consumer confidence may boost demand for . The index of current economic conditions rose to 91.5 in early March from 86.2 in the prior month. The index of longer-run expectations rose to 77.5 from 70.7 in February. The index remains about 16 points below its pre-pandemic level.

May 3, 2021

  • The Centers for Disease Control and Prevention said in late April that the spread of COVID-19 is still too high to relax pandemic-related guidance for continuing care retirement communities. The CDC continues to recommend prevention strategies, including masking, social distancing, hand hygiene and avoiding medium to large gatherings.
  • A new Occupational Safety and Health Administration program designed to focus inspections, outreach, and compliance assistance efforts on “companies that put the largest number of workers at serious risk of contracting the coronavirus" targets continuing care retirement communities, assisted living facilities, and skilled nursing facilities. The “national emphasis program,” or NEP, became effective in mid-March and will last up to 12 months. It also will focus on employers that retaliate against workers for making complaints about unsafe or unhealthy conditions, or for exercising other rights protected by federal law, the Department of Labor agency said. “Unprogrammed” inspections related to COVID-19 fatalities will continue to be prioritized under the program.
  • COVID-19 has introduced a fear of traditional healthcare delivery settings, especially among older adults, according to Bob Kramer, founder of aging services consulting firm Nexus Insights. The fear will drive change in healthcare delivery, and senior living settings are emerging as a key player in that change, with a major objective being to keep residents out of the hospital. “If you’re going to tell a resident’s family, in essence, ‘Well if something happens to Mom, we just call the paramedics and she goes to the ER,’ they’re going to go, ‘No, that’s not acceptable to us,’” Kramer said. “And payers are not going to put up with sending somebody that they are holding the managed Medicare plan risk for to the ER every time there’s an issue at 2 in the morning.”
  • The National Investment Center for Seniors Housing & Care has launched the COVID-19 Reach Tracker, a report that draws on publicly released information to compile statistics such as the number of senior living properties in a given metro area with positive COVID-19 diagnoses among residents and staff. The Tracker is updated regularly as states revise their data and as additional reporting is provided by government sources.
  • Employment at continuing care retirement communities decreased 8.7% year over year in February, according to the US Bureau of Labor Statistics.

April 28, 2021

  • Total convenience store transactions declined 13.9% year over year in 2020, according to the National Association of Convenience Stores. Inside sales at convenience stores increased 1.5% to a record $255.6 billion while basket sizes increased 18.4%. The average basket size was $7.34 in 2020 vs. $6.20 in 2019.
  • Digital convenience store goPuff, whose valuation has more than doubled in five months amid a pandemic-fueled surge in online food and grocery delivery, plans to use $1.5 billion in new funding to continue expanding across the US and internationally. The company plans to take on traditional convenience stores by offering a range of household essentials from over-the-counter medicines and cleaning supplies to snack foods and alcohol.
  • Vehicle miles traveled (VMT), an indicator of , decreased 11.3% year over year but increased 1.2% month over month in January, according to the Federal Highway Administration. VMT was down 13.2% year over year for all of 2020. The December year-over-year drop in VMT was largest in the Northeastern US (-16.2%) followed by the North Central (-11.8%), West (-11.2%), South Atlantic (-11.1%), and South Gulf (-7.9%).
  • The number of convenience stores decreased 1.6% year over year during 2020, according to the National Association of Convenience Stores (NACS). Experts cite the pandemic-related drop in gasoline sales and lower in-store foot traffic as key causes of many closures. “The sustained growth of online shopping and the long-term effects of the pandemic will continue to reshape consumer shopping routines and affect the overall retail landscape," said Andy Jones, NACS vice chairman of research and technology.
  • Sales in the gas station industry, which includes establishments with convenience stores increased 10.9% in value month over month and 35.7% year over year in March.
  • Employment in the convenience store industry decreased 0.8% year over year in February but was up 8.4% compared to the low of April 2020.
  • Gas prices averaged $2.85 on April 19, down from $2.87 on March 22 and $3.89 a year earlier, according to the Energy Information Administration.

May 3, 2021

  • All 50 states have either opened coronavirus vaccinations to everyone eligible under US Food and Drug Administration emergency use authorizations, or have announced when they plan to do so. For all states currently vaccinating anyone 16 and older, people ages 16 or 17 can only receive a Pfizer/BioNTech vaccine, as it is the only option authorized for use in that population so far. The vaccines made by Moderna and Johnson & Johnson are authorized for use in adults 18 and older.
  • Telecommuters are eager to return to in-person meetings and conventions, according to an early 2021 survey by APCO Insight. The survey finds that even after adapting to the new digital workplace, 81% of professionals who attended in-person meetings and conventions before the pandemic miss doing so and would be just as likely—if not more likely—to attend in-person conferences, conventions, trade shows and other business events in the future. When asked if convention centers and event venues should be eligible for federal support and funding, 45% of Americans agreed, whether they attended in-person meetings and conventions prior to the pandemic, or not.
  • Chicago’s convention industry is cautiously planning a full slate of shows at McCormick Place for the second half of 2021. The number of major events scheduled is on par with the number of large shows McCormick Place typically hosted in pre-pandemic times, according to the Chicago Tribune. Experts note, however, that the number of shows ultimately held will largely depend on how quickly the state can reach its reopening bench marks, which hinges on a vaccination plan still in its early stages. Some researchers and industry experts in Illinois say that Chicago’s convention industry might not rebound in any significant fashion until 2022.
  • A health advisory group to the Philadelphia Convention and Visitors Bureau said that "big meetings, hundreds of people,” will not likely occur before the fourth quarter of 2021. Hopefully 60% to 70% of the population will have been vaccinated by then, leading to herd immunity from the disease, a group spokesperson said. Other precautions would still need to be in place, including better testing capabilities that are both “highly sensitive” and quick to deliver results.
  • The Center for Exhibition Industry Research told trade show promoters and vendors not to expect in-person conventions until late summer or fall of 2021.
  • Industry experts say that declining revenue may affect the future development of the convention and trade show industries. Many cities fully or partly finance the construction and operation of convention hotels to compete for events, according to the New York Times. Financing is often in the form of bonds backed by the hotels' income, as well as revenue from hospitality and tourism taxes. Declining revenue due to the coronavirus outbreak could cut the budgets of cities that used bonds to finance the construction of the hotels with the hopes of attracting more visitors.

April 11, 2021

  • All 50 states have either opened coronavirus vaccinations to everyone eligible under US Food and Drug Administration emergency use authorizations, or have announced when they plan to do so. Many analysts say that rising vaccination rates will result in lower demand for snacks like cookies and crackers as more people venture outside following vaccination.
  • Cookie and cracker manufactures may face new challenges as vaccines roll out and consumers return to normal spending patterns after months of unprecedented demand. Kroger, for example, is projecting same-store sales to decline 3% to 5% year over year in 2021 following 14.1% growth in 2020. Some experts say that demand for comfort food like cookies is likely to decrease due to the expected "return to normal".
  • Cookie demand has risen 25% during the coronavirus pandemic, according to Top Data, a data analytics agency. One in five Americans is consuming more than three cookies per day. About one third of Americans eat between 24 and 48 cookies a month, with nearly 40% eating more than that.
  • Many legal experts agree that corporations can require COVID-19 vaccinations for employees. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with the union before mandating a vaccine. Anti-discrimination laws also provide some protections. Under the Americans with Disabilities Act, workers who don't want to be vaccinated for medical reasons are eligible to request an exemption.
  • About 90% of consumers surveyed by C Space agreed with the statement that “eating their favorite snack makes them feel normal and reminds them of the good times.”
  • Consumers are increasingly buying food online due to quarantines and concern about social distancing. Cookie and cracker manufacturers traditionally sold cases of products in light packaging for display on retail shelves. Now retailers are shipping individual packages to online customers and the light packaging with little to no structure has become problematic as cookies and crackers arrive damaged. The industry will need to address packaging if consumers continue to purchase significant volumes of these goods online.
  • Employment in the cookie, cracker, pasta and tortilla manufacturing industry was decreased 1% year over year in February but was up 7.1% from the pandemic-related low of April 2020.
  • The prices paid by consumers for cookies rose 3.4% year over year in February. Consumer prices for crackers and bread increased 3.1%. Cookie and cracker manufacturers’ prices increased 1.3% year over year in March.

April 28, 2021

  • Cosmetic and beauty supply stores may not see a surge in demand as the pandemic wanes. About 58% of respondents to a survey by online job search service FlexJobs said that they would "absolutely" look for a new opportunity if they weren’t able to continue working remotely in their current role.
  • Q4 2020 sales and profit decreased year over year for Ulta, the nation’s largest beauty store chain. Results were impacted by weaker sales of cosmetics during the pandemic. Sales at stores open at least 14 months decreased 4.8% during period, hurt by fewer transactions. The company said transactions declined 12.2%, but the average purchase per ticket rose 8.3%.
  • The global beauty market is set to surpass 2019 sales in 2021 despite the pandemic’s setbacks, according to consulting firm McKinsey. The recovery will be uneven across categories, however. Haircare, skincare, and personal care are predicted to grow in 2021, while fragrance and color cosmetics sales are expected to decrease.
  • Real disposable income, an indicator of demand for discretionary purchases, decreased 8.2% in February following an 11% increase in January. The January increase, the largest increase in 9 months, was driven in large part by government transfer payments, which rose 52% in January from the prior month, reflecting both stimulus checks and the supplemental $300 weekly jobless benefit payments. Consumer spending decreased 1% in February, following a 2.4% increase in January. Spending and income are expected to rebound in the coming months as more people become vaccinated.
  • Beauty products firm Sephora plans to open shops at 850 Kohl's locations by 2023. Sephora will also launch on Kohl's website this year, offering more than 100 beauty brands, some of which are exclusive to Sephora. The Sephora shops in Kohl's stores will be about 2,500 square feet, offering most of the same services found at other Sephora stores, including help with makeup application.
  • Ulta Beauty will place shops in more than 100 Target stores by mid-2021. The shops, which will each be about 1,000 square feet and carry makeup, skincare, and fragrance, will operate beside existing beauty sections in Target stores. Industry experts say that the partnership is intended to capitalize on pandemic-driven shopping habit changes, as customers try to minimize potential exposure to the coronavirus through one-stop shopping.
  • Employment in the cosmetic and beauty supply store industry decreased 29.3% year over year in February but was up 100% from the low of May.

April 29, 2021

  • Industry watchers suggest the pandemic will hasten the demise of many large brick-and-mortar retailers as consumers shifted even further to online shopping during the lockdown. Losing commercial customers and gaining more residential business could be a mixed blessing for couriers like FedEx and UPS. The shift in volume toward residential deliveries compared to commercial ones can hurt carrier profits due to smaller package sizes, more frequent stops, and increased package sorting complexity. To help cover additional volume-related costs, UPS and FedEx have instituted COVID-19-related peak surcharges. The surcharges primarily apply to large-volume shippers.
  • As the surge in ecommerce is not expected to abate once the pandemic subsides, the logistics space is seeing new entrants and drawing investment. Global investments in logistics startups reached $8.1 billion in the fourth quarter of 2020, according to CB Insights. One such firm is Pandion, founded by a former delivery executive at Amazon. Pandion aims to help retailers like Walmart, Target, and Wayfair compete with Amazon’s delivery speed by reducing the cost and congestion of the “middle mile” - the delivery gap between the warehouse and the vehicle that delivers a package to the customer’s home, according to Bloomberg. Pandion plans to operate package sorting centers and transport packages with contract trucking firms.
  • As the two biggest couriers – UPS and FedEx – increase rates and in some cases refuse volume increases by large shippers, it is creating opportunities for smaller regional players, according to FreightWaves. As shipping demand rises, the large couriers are increasingly refusing some shippers’ volume increases, especially for low-margin, difficult-to-handle freight. The imbalance between shipper demand and courier supply bandwidth is expected to give an opening to regional couriers. However, experts warn that regional players need to be careful about the new business they pick up to avoid the low-margin challenges experienced by UPS and FedEx.
  • As higher volumes have led to increased costs for shippers, couriers’ sales got a boost in the fourth quarter of 2020 compared to the third quarter. Courier and messenger services sales rose 17% to nearly $34 billion, according to the US Census Bureau. Courier and messenger service sales were up nearly 23% in Q4 2020 on a year-over-year basis.
  • FedEx’s revenue in the fiscal third quarter 2021 reached $21.5 billion, an increase of nearly 23% compared to the same period in fiscal 2020. The company said growth was driven by increased volume in its FedEx International Priority and US consumer package services. UPS posted first quarter 2021 revenue of $22.9 billion, a 27% rise over the same period a year earlier. Both companies enjoyed increased demand from ecommerce.
  • As more businesses gradually reopen, the balance between residential and commercial deliveries may swing back closer to its pre-pandemic state. On April 27, the 7-day average for daily new cases was about 53,000 – still high, but more than four times lower than the highs seen in early January. Hospitalizations were up but deaths were falling. As of April 27, all but seven states were mostly open, according to The New York Times. Accelerating vaccination rates should also drive more demand from commercial customers. On April 19, all Americans over age 16 became eligible to be vaccinated. As of April 28, about 96 million Americans were fully vaccinated or 29% of the US population.
  • On-demand food delivery services have grown as consumers sheltered at home and many restaurant dining rooms were closed. However, with few differentiators among the top players, pressure on pricing has led to consolidation. To complement its Uber Eats unit, Uber completed its purchase of food delivery start-up Postmates in late 2020. The move also helps shore up Uber’s ridesharing business which struggled as people went out less often. Uber had shown interest in rival Grubhub, but the latter agreed to a merger with Just Eat Takeaway in mid-2020; the deal is expected to close later in 2021. Bar closures and capacity limits increased consumer thirst for on-demand alcohol delivery services. To capitalize on the trend, Uber Eats agreed to buy alcohol delivery company Drizly in early 2021 for $1.1 billion in stock and cash. Uber’s deal for Drizly is expected to close in mid-2021.
  • With a record year for package deliveries in the rearview, couriers are playing another key role as they help distribute COVID-19 vaccines. Deutsche Post estimates 10 billion doses of vaccine will be distributed on 15,000 air freight flights over the next two years. One of the many challenges of global distribution is that some of the vaccines must be stored at very cold temperatures. UPS has invested in “freezer farms” to store millions of doses at temperatures as low as -80 Celsius. FedEx has about 90 cold supply chain facilities scattered across the world and has plans for more.
  • The huge spike in ecommerce demand has helped to heat up competition among couriers, according to Logistics Management. FedEx has embraced ecommerce by expanding weekend service, and catering to small- and medium-size businesses instead of some larger clients, including Amazon. UPS has tended to focus more on margins by discouraging unfavorable volumes from some customers by charging very high rates. Amazon is requiring sellers on its platform to offer next-day shipping nationwide. The move is expected to drive demand for Amazon Fulfillment and Amazon Logistics. It will also force FedEx and UPS to expand weekend pick-ups and deliveries. In late April 2021, UPS announced it would expand weekend deliveries over the coming months. By October, UPS plans for its Saturday delivery coverage to reach 90% of the US population.

May 3, 2021

  • Corporate bankruptcy filings slowed in early April after increasing in March to levels not seen since the worst days of the COVID-19 pandemic. Eighteen companies entered bankruptcy proceedings in the first half of April, well behind the 31 recorded in early March, according to S&P Global Market Intelligence data. As of April 15, 155 companies have announced bankruptcies so far in 2021. That is fewer than the 180 filings at the same time in 2020 and a slower pace than all but three of the prior 11 years — 2014, 2015 and 2018.
  • CPA practices and their clients continue to see automation as a key to revenue growth. Time-series surveys conducted during the pandemic by several organizations show that automation, particularly in areas like accounts payable and accounts receivable, was driving business growth before the pandemic set in and has continued to provide consistent momentum as 2020 progressed, according to CPA Practice Advisor. Companies that embrace automation expect future growth even in the face of the pandemic, while those that don't aren't as optimistic. The surveys also showed a direct correlation between the adoption of technology and the ability to switch to value pricing that helped grow firm revenues during the pandemic.
  • Up to 10,000 stores could close in 2021, according to Coresight Research. Retailers have announced 1,678 closures as of January 22. Coresight also forecasts that retailers will announce 4,000 store openings in 2021, driven by growth from grocery discounters and dollar store chains. Coresight tracked 8,741 closures in 2020, along with 3,304 openings. “Retail bankruptcies are just the tip of the iceberg," says James Gellert, CEO of analytics firm RapidRatings. “Companies that are weakened from a financial perspective end up cutting corners or having to make strategic decisions to invest in one thing and not another. And the ripple effect of those decisions go to weaken a whole group of supply companies and therefore an industry,”
  • The coronavirus pandemic has accelerated the shift by CPA practices from compliance services to advisory services, according to the Accounting Today news site. “This year the focus has been much more on how do I as a small business stay afloat,” said Charlotte Rushton, president of the tax professional’s customer market at accounting industry consulting firm Thomson Reuters. “How do I get the PPP loans that have been offered? What do I do once I get them? How do I apply for forgiveness?" "We’ve had a 50 percent uptick in the seminars we run to help train accountants on tools and techniques to use to make that relationship shift.”

May 3, 2021

  • Farm cash receipts are forecast by the US Department of Agriculture to hit $391 billion in 2021, the best result in seven years.
  • The US Department of Agriculture (USDA) has announced a new, four-part initiative called Pandemic Assistance for Producers . The program will reach a broader set of producers with at least $6 billion, the USDA said. A new set of rules will emphasize outreach to small and socially disadvantaged producers, specialty crop and organic producers, and timber harvesters. It will also provide support for the food supply chain and producers of renewable fuel. The Coronavirus Food Assistance Program and other existing programs will fall within this new initiative. The old programs will be refined in cases where statutory authority allows.
  • Farmers and ranchers collected $23.5 billion in pandemic relief payments in less than nine months in 2020, according to the US Department of Agriculture (USDA). The payments exceeded the $23 billion spent by the Trump administration to mitigate the impact on agriculture of trade disputes with China. Nearly a quarter of the money went to three states: Iowa with $2.1 billion, California with $1.8 billion, and Nebraska with $1.6 billion. Among commodities, cattle producers received $7.1 billion and corn farmers $5.1 billion, followed by dairy farmers with nearly $3 billion. “CFAP2 (Coronavirus Food Assistance Program) probably is the broadest program we’ve ever had at USDA,” said former Agriculture Under Secretary Bill Northey. “Nearly every agricultural producer out there, from farmers market folks and folks with small specialty livestock to all the commodities and larger livestock operations; nearly everybody qualified to receive some support for the impact that COVID had on their operations.”
  • Row crop farmers would see payments of $20 per acre under the $900 billion coronavirus relief bill signed into law in late December 2020. Industry experts say that the agricultural provisions in the latest coronavirus stimulus package are far more detailed than in previous aid packages — which gave Agriculture Secretary Sonny Perdue great leeway in distributing aid — and direct aid to producers and processors who hadn't yet received assistance.
  • China is forecast by the US Department of Agriculture (USDA) to import a record $27 billion worth of farm products in fiscal 2021 (started on October 1) and regain its rank as the top foreign market for American farm products following a pandemic-related decline of imports during fiscal 2020.

April 20, 2021

  • Hotel construction in the Americas decreased 11.6% year over year during Q1, according to the Hospitalitynet news site. The number of rooms in the final planning state decreased 13.4%. Lodging Econometrics expects the number of hotel projects completed to increase 11.5% year over year in 2021 despite the slow start, and to increase 11% year over year in 2022.
  • Pessimism about nonresidential construction activity continues to grow among executives surveyed for Wells Fargo’s 45th annual construction industry forecast.
  • Of executives who think that nonresidential construction activity will remain the same in 2021, most feel it will begin to increase in the year’s second half as vaccines continue to roll out.
  • While executives are becoming more pessimistic about nonresidential construction activity, their optimism for residential construction activity has strengthened.
  • The outlook for the construction industry as a whole remains positive, with 59% of respondents believing it will expand in the next two years.
  • Of the 833 hotels that opened in 2020, upscale and upper midscale brands accounted for 68% of the new openings and 63% of new rooms, according to Lodging Econometrics. Extended-stay brands accounted for 29% of all hotels that opened in 2020. The middle tier extended-stay brands accounted for the most openings with 141 hotels/14,347 rooms, equating to a 10.3% growth rate. Extended-stay brands are projected to open 241 projects/25,779 rooms in 2021, or 26% of all forecasted openings for the year.
  • Total construction starts will increase 4% in 2021, according to Dodge Data & Analytics. "The dollar value of starts for residential buildings will increase 5% in 2021, nonresidential buildings will gain 3%, and nonbuilding construction will improve 7%. Only the residential sector, however, will exceed its 2019 level of starts thanks to historically low mortgage rates that boost single family housing,” said Richard Branch, Chief Economist for Dodge Data & Analytics.
  • Growth in renovation and repair spending will reach 4.1% by the first quarter of 2021 with gains softening to 1.7% by the third quarter, according to the Joint Center for Housing Studies of Harvard University. “The remodeling market is bouncing back from the initial shocks caused by the pandemic, as homeowners continue to spend significant time in their home and are adapting it for work, school, and leisure,” says Chris Herbert, Managing Director of the Joint Center for Housing Studies.
  • Spending on nonresidential building projects is declining and will do so through 2021, according to a mid-year update to the American Institute of Architects’ (AIA) Consensus Construction Forecast. The AIA estimates an 8% spending drop in 2020 and just under 5% in 2021 due to pandemic-induced economic disruptions. This is the first time in nearly a decade that nonresidential construction spending has trended downwards, according to the AIA.
  • Total construction spending decreased 0.8% month over month on an adjusted basis but increased 3.4% year over year on an unadjusted basis in February, according to the US Census Bureau. Residential construction spending decreased 0.2% month over month but increased 19.7% year over year in February. Nonresidential construction spending decreased 1.3% month over month and 7.8% year over year in February.

April 11, 2021

  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. As of April 4, the SBA had disbursed $746 billion of the $813.5 billion total appropriated for the PPP. Some $60 billion, or 21% of Round Three PPP funding, remains available. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Home improvement retailer Lowe's said that fourth-quarter same-store sales climbed 28.1%, as consumers spent more on home projects during the pandemic. The company warned, however, that spending on DIY projects and home improvement could ease as consumers resume normal activities post-pandemic. Chief Financial Officer Dave Denton laid out three scenarios for a robust, moderate or weak market. In a robust market, the retailer's outlook for 2021 anticipates a 5% to 7% drop in demand for the home improvement sector on a mix adjusted basis. In a moderate and weak market, demand would likely drop respectively by 7% to 9% and 10%.
  • About a third of steel industry experts surveyed by Steel Market Update said that the price of steel, which rose steeply in 2020, may remain elevated beyond Q1 of 2021. Several mills have expansions in the works that will add more than 7 million tons of steelmaking capacity to the market in 2021. About 31% of respondents to a Steel Market Update survey said that prices will peak in March, while 28% said that February would be the peak.
  • A $900 billion coronavirus relief package signed into law in late December 2020 explicitly states that small businesses which received Paycheck Protection Program (PPP) loans and used those funds to incur otherwise deductible eligible expenses can deduct the expenses even if they reasonably expect to receive forgiveness of the PPP loan. The relief package deductibility rule is a reversal of the Internal Revenue Service (IRS) position that taxpayers cannot claim such a deduction because it would be an impermissible double tax benefit to have income on debt forgiveness not taxed as income, and then to also allow tax deductions for the expenses paid with the forgiven loan money.
  • Employment in the cutlery and handtool manufacturing industry decreased 6.3% year over year in February but was up 6.2% from the pandemic-related low of May 2020.
  • Construction industry and consumer demand for handtools has not suffered as consumers take on DIY projects during the quarantine and many construction projects in-process continued. Sales of handtools may increase as sharing on the construction or jobsite has become less acceptable out of concern for transmitting the coronavirus.
  • The prices that cutlery and handtool manufacturers charge for mechanics’ hand service tools increased 5.4% year over year in March. Prices for saw blades and handsaws increased 2.2% in March, while prices for edge handtools decreased 1.2%.
  • The global kitchen knife market is forecast to grow 4.1% annually from 2020-2024, according to Technavio. Non-electric knives will be the leading segment and the introduction of consumer ceramic knives will be a major factor driving sales. The COVID-19 pandemic is expected to have a negative impact on producers but a neutral impact on the consumer market for kitchen knives.

May 3, 2021

  • Dairy product manufacturers may need to prepare for a rebalancing of sales across sectors as the pandemic wanes. Retail sales at grocery stores increased just 0.6% in value month over month on an adjusted basis in March and were down 12.3% year over year on an unadjusted basis, while sales at food service and drinking places increased 13.4% month over month in March and were up 35.3% year over year.
  • Kroger, the largest supermarket chain in the US, said that it expects sales at stores open for at least one year (comparable sales) to decline by 3% to 5% year over year in 2021. Sales increased 14.1% year over year in 2020. Kroger cited the end of consumer stockpiling and the availability of coronavirus vaccines, which makes it possible for consumers to shift back to eating more meals at restaurants and outside of their homes, as a key cause of expected lower sales growth.
  • Other grocers have also forecast year-over-year sales decreases. Discount grocer Grocery Outlet said that comparable sales in the first quarter of 2021 are likely to decline into the high-single digits. Sales rose 12.7% last year. Sales at Sprouts Farmers Market increased 6.9% year over year in 2020, but the chain said that sales growth will decline to low-to-mid-single digits this year. Walmart projects comparable sales to grow by low single-digits in 2021 after 8.6% growth last year.
  • The Pfizer-BioNTech COVID-19 vaccine no longer needs to be kept at super-cold temperatures, according to updated stability data. The news may reduce concerns about adequate dry ice supplies voiced by dairy product manufacturers. Dairy cultures must be kept at sub-zero temperatures prior to use. The Pfizer-BioNTech vaccine initially had to be shipped in specially-designed containers that must be topped up with dry ice every five days. The latest data brings the Pfizer-BioNTech vaccine in line with other approved vaccines.
  • The $900 billion coronavirus relief bill signed into law in late December 2020 includes $400 million to buy milk for processing into dairy products that would then be donated to food banks and other charities. Dairy producers are also eligible for payments through a supplemental version of the Dairy Margin Coverage (DMC) subsidy that makes up to an additional $470 million available. Payments would be based on 75% of milk production in 2019 that exceeded the volume already covered by the DMC.
  • Organic dairy product manufacturers have not been hit as hard as other dairy product manufacturers during the coronavirus pandemic, according to Dairy Foods Magazine. “There are relatively small amounts of organic that are used in foodservice,” said Joe Baird, CEO of Willows, Calif.-based Rumiano Cheese Company. “Accordingly, the reduced restaurant sales have not hit organic as severely as they have hit conventional.” Baird said that organics tend to be stronger in retail, and organic dairy product manufacturers may be benefiting as a result.

May 3, 2021

  • Rapid data processing and hosting services industry growth, accelerated by the coronavirus pandemic, has prompted Nvidia to develop its first data center CPU. Industry experts say that the new CPU targets artificial intelligence needs. Nvidia’s CPU will use Arm technology, which has not found wide acceptance in the data-center market. Nvidia has agreed to acquire Arm at a $40 billion valuation, but the acquisition has been challenged on many fronts, leading to considerable uncertainty about its completion.
  • Capital expenditures on hyperscale data centers by the 20 largest cloud and internet service companies in the world hit a record-breaking $37 billion in Q3 2020, according to Synergy Research Group. Data center spending by these companies from January 2020 to September 2020 totaled $99 billion, up 16% year over year. More than 100 new hyperscale data center facilities were built during 2020, taking the total number to almost 600. Synergy Group analysts cite new, pandemic-driven business models that emphasize cloud-based computer services as a key driver of increasing spending on hyperscale data centers.
  • The biggest growth in the US hyperscale data center footprint over the last eight quarters has come from Amazon, Facebook, and Google, according to Synergy Research Group. Those three together have accounted for over 80% of new hyperscale data centers that have been opened in the US.
  • Some enterprises are seeking shorter data center lease terms as they re-evaluate their IT needs in the wake of the pandemic, according to commercial real estate services and investment firm CBRE. Hybrid models, where some workloads are handled on-site and others in the cloud, are gaining traction, according to Prime Data Centers CEO Nicholas Laag. “Large enterprises were already migrating many workloads to the cloud. The concept of a distributed workforce has accelerated that adoption, as well as the decision to deploy hybrid cloud models and consider sale-leaseback scenarios to reduce overhead and focus on their business,” Laag said.
  • A panel of investment bankers who advise data center operators said that the industry appears set for a sustained boom, fueled by the acceleration of digital transformation across the business world as a result of the pandemic. Much of the growth will be driven by hyperscale cloud service providers, which will have deployed 2.1 million new IT racks between 2020 and 2025. The expected deployments translate to roughly $62 billion in capital spending on data center infrastructure, according to 451 Research’s projections. “These incremental deployments … won’t be made solely by the cloud players themselves,” Jonathan Schroth, research analyst for data center services and infrastructure at 451, said. “They will need to work with these data center providers and operators to expand their footprints, especially in the markets where they are not located today.”
  • Data storage requirements are rising due to increasing use of data-generating IoT products like remote connected health monitoring solutions, packaging and shipping trackers, and streaming devices. Use of IoT products is rising due to greater reliance on telecommuting, telehealth, and telelearning. Industry experts say that many companies are now looking at establishing smaller locations closer to the customer, reducing reliance on larger data centers with central data resources. For medium- to large-size companies, deploying many more of those edge data centers means they need their own specific storage. It is a fundamentally different architecture that is required to increase the speed at which data can be accessed and processed.
  • A new crop of companies is chasing the business opportunity in building edge data centers to reduce network latency for end users and cut data transport costs. Companies including EdgeMicro, Vapor IO, and Compass EdgePoint are expanding in markets for content, cloud, and telecommunications that are underserved by the largest data center providers. EdgeMicro announced plans in August for new locations in Cleveland, Indianapolis, Memphis, Houston, and Pittsburgh. Without using edge data centers in Houston, for instance, internet traffic in the metro has to be served from the nearest major network hub in Dallas, which is 240 miles away. Building a smaller hub in Houston improves performance for end users there and eliminates the cost of moving data between Dallas and Houston for content companies.

April 24, 2021

  • All 50 states have either opened coronavirus vaccinations to everyone eligible under US Food and Drug Administration emergency use authorizations, or have announced when they plan to do so. Day spas and tanning salons are likely to benefit if social distancing restrictions are eased as vaccination rates increase. For all states currently vaccinating anyone 16 and older, people ages 16 or 17 can only receive a Pfizer/BioNTech vaccine, as it is the only option authorized for use in that population so far. The vaccines made by Moderna and Johnson & Johnson are authorized for use in adults 18 and older.
  • Many analysts say that businesses should prepare for an upcoming pandemic-related spending shift that is increasingly referred to as revenge shopping. Shoppers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time. The bounce back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues.
  • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
  • Spas in many areas are struggling to comply with mandates related to the coronavirus pandemic. Tiered reopening plans have forced some spas to open and close several times as communities move across tiers, depending on the number of COVID-19 cases reported. Whether or not a business may remain open can also depend on its classification. In California, for example, Outdoor skate parks, batting cages and outdoor playgrounds can reopen even under the most-restrictive purple tier, while indoor businesses like spas must wait until a county reaches the least-restrictive yellow tier, and then only if local officials also approve. New York State is simultaneously allowing reopenings in some neighborhoods while ordering businesses and schools to close in others. No other state has tried such a granular approach to rising cases, public health experts told The New York Times. New York State’s plan cuts through city neighborhoods, ZIP codes and, in some cases, even streets. State and city officials hope this approach will prevent the need for additional broad geographical lockdowns.
  • Limited occupancy levels remain an issue, according to an International SPA Association (ISPA) Foundation Consumer Snapshot Initiative survey. More than two-thirds of all spas (68%) reported a maximum occupancy level of 55% or less. The reduction in occupancy levels corresponds to the sharp decreases in year-over-year performance noted by respondents, 30% of whom said, since reopening, they had seen a greater than 65% drop in spa services revenue compared to year-ago. Of the 12% of reopened spas that said they had encountered a confirmed case of COVID-19 since reopening, 71% did not have to close again as a result. Most spas (73%) also noted that they had not had to refuse service to any guest due to their COVID-19 or PPE policies. Of the spas that have had to refuse service for those reasons, most (73%) did so because the guest refused to wear a facial covering or comply with sanitation guidelines, suggesting that compliance with those common steps remains a notable hurdle for reopened spas.
  • Some spas are accepting clients by appointment only. Some salons and spas are not yet taking walk-in clients and will turn away customers unless a stylist, technician, or massage therapist is available at that exact moment. Spas that had operated on a walk-in basis have been forced to limit capacity and increase time between appointments for sanitizing. With fewer appointments available, those operators have been forced to implement a booking system to maximize resources.

April 22, 2021

  • Many funeral homes have seen families opt for cremation and delayed memorial services in response to the COVID-19 outbreak. More Americans have opted for cremation over the years, surpassing burials in 2017, according to the National Funeral Directors Association (NFDA). The pandemic has accelerated the trend, according to the NFDA. More families opting for cremation could present challenges for many funeral directors as burials are much costlier, and are more profitable, than cremations. Cremation may also be preferable as it doesn’t involve embalming which in deceased COVID-19 patients can present risks to workers who perform embalming. Some funeral homes have ceased offering embalming services unless it is legally required (such as when a body is entombed in a crypt).
  • Restrictions on gatherings create challenges for funeral homes and their clients’ ability to have viewings and memorial services. Funeral homes are making use of live streaming options to record and broadcast viewings and memorial services, so family and friends can attend remotely and send condolences electronically. To accommodate larger numbers of mourners while maintaining social distancing, some funeral homes stagger attendance of funerals and viewings into small groups. Other adaptations include drive-through casket viewings and visitations, and simulcasting services on large movie screens in cemetery parking lots which mourners can view from their cars.
  • Daily new COVID-19 cases began rising rapidly in the fall and winter, but new cases were dropping rapidly by mid-January. On April 21, the 7-day average for new cases was about 64,000 – about the same daily level had remained consistent for a month. Hospitalizations were rising but deaths continued to drop. Some health experts are concerned that the spread of more communicable coronavirus variants combined with vaccine reluctance could lead to fresh outbreaks and prolong the attainment of herd immunity. However, wider vaccine availability has slowed COVID-19 death rates. As of April 21, 213 million doses of vaccine had been administered and 26% of the US population was fully vaccinated. As the pandemic has worn on, funeral homes have monitored local new case rates carefully to be prepared in the event of a spike in hospitalizations.
  • In hard hit areas of the country, crematoriums that typically made daily pick-ups from funeral homes are pushing back several days because their volume increased significantly. Funeral homes held remains for longer periods of time, while they were overwhelmed with increased volume. Some funeral homes report being better prepared for rising cases than they were for the wave that occurred over the summer. Anticipating a rise in cases in the fall, many funeral directors ordered extra PPE and other supplies. During the peak of the pandemic during the winter, some also added refrigeration capacity. Some funeral homes have handled as many deaths in a couple of months as they would normally see in a year, according a spokesperson with the National Funeral Directors Association.
  • Coronavirus has prompted consumer advocates to urge the Federal Trade Commission to update its regulation of funeral homes. Rules in place since 1984 require funeral homes to offer detailed pricing information if asked in person or over the phone. Advocates are calling for the rule to be amended to require funeral homes to include pricing on their websites to make it easier for consumers to research funeral services without leaving home.
  • The COVID-19 relief bill passed in December of 2020 included $2 billion in reimbursement funding for people who faced hardship in having to pay funeral costs related to the death of a loved one from COVID-19. Eligible recipients can receive up to $9,000 per funeral and up to $35,000 if numerous family members were lost to COVID-19. The program is only open for those whose loved one died between January 20, 2020 and December 31, 2020. Many funeral homes are working with families to help them gather the necessary documentation to apply for reimbursement. The program, which launched in April, is administered by the Federal Emergency Management Administration (FEMA). Eligible expenses include, caskets, urns, burial plots, headstones, officiant services, and cremation and burial costs. Applicants must register by phone. Like many pandemic-related relief programs, the funeral reimbursement program has been a magnet for fraudsters, according to CNBC.

April 20, 2021

  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. As of April 4, the SBA had disbursed $746 billion of the $813.5 billion total appropriated for the PPP. Some $60 billion, or 21% of Round Three PPP funding, remains available. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • About 99% of dental practices are open and 43% of practices report pre-pandemic patient volume as of January 18, according to an American Dental Association (ADA).
  • While 99% of dentists have reopened and some practices report a return to pre-pandemic volumes, the overall number of patients visiting offices remains about 20% below usual levels, according to the ADA. Industry experts say that many people continue to put off elective procedures, many of which are the source of demand for products made at dental laboratories, due to concerns about the coronavirus pandemic. Some health experts, including dentists, told the New York Times that they are skeptical about going to the dentist for anything that is not urgent, especially in the many parts of the country where coronavirus cases are rising. Dr. Neetu Singh, the oral health program director at Health Care For All in Boston, said that for now people should use telehealth or call the dentist first for a consultation, then assess whether to come in.
  • Spending on dental care could decline by up to 20% in 2021, the American Dental Association (ADA) projects. More than 46% of dentists surveyed by the ADA said that their patient volume was down at least 15% from usual levels during the week of October 5.
  • The American Dental Association (ADA) and National Association of Dental Laboratories (NADL) are encouraging dentists to conduct due diligence to determine whether dental laboratories are offshoring production. Dentists need to know what materials are used in the devices that they provide to patients, and need assurance that the lab manufacturing those devices follows the appropriate infection control protocols, according to Travis Zick, immediate past president of NADL. “ADA policy supports dental laboratories letting dentists know if the prescribed dental prostheses, components, or materials are to be manufactured or provided by a foreign dental laboratory,” said Dr. Rudy Liddell, chair of the ADA Council on Dental Practice. “It also notes that state registration of dental labs is one way to achieve this.”
  • Dental offices, the primary source of demand for dental laboratory products, are struggling with the cost of complying with reopening requirements and guidelines, according to the Washington Post. The investment required to outfit practices with the personal protective equipment (PPE) that wasn't needed before the coronavirus outbreak can be substantial. Some dentists may lose their practices because of the unexpected expenses.

May 6, 2021

  • The American Dental Association (ADA) is supporting recently introduced legislation to give small businesses more flexibility with the Small Business Administration’s Paycheck Protection Program (PPP). The PPP Revenue Adjustment Calculation to Increase Capital Accessibility Long-term Act and the Fair PPP Accounting Act would adjust the eligibility calculation for second draw PPP loans to 90 consecutive days, rather than a calendar quarter.
  • The ADA is also supporting the PPP Flexibility for Farmers, Ranchers and the Self-Employed Act, which would allow sole proprietorships to use gross rather than net income when applying for PPP loans. The legislation would also adjust the eligibility calculation to 90 consecutive days, rather than a calendar quarter.  With the PPP Flexibility for Farmers, Ranchers, and the Self-Employed Act, sole proprietors who had previously applied for PPP using net income would be able to recalculate and receive an increased benefit.
  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. The SBA approved 3.6 million loans worth $211.8 billion as of March 28, which covers about 75% of the $284 billion that was allocated to the program when it reopened in January. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • A Washington Post survey of state attorney general offices and financial departments shows that consumers in 29 states have filed 510 complaints of coronavirus-related surcharges at dentist offices, senior living facilities, hair salons and restaurants. Some of the complaints have been filed nearly a year after officials stated that such surcharges are not allowed. Most reports of coronavirus surcharges have come from patients at dentist offices. Chad Gehani, immediate past president of the American Dental Association, said that the cost of PPE for dentists has jumped, so some offices have charged a fee to cover it.
  • Some insurance providers subsidize PPE costs, and other contracts don’t allow for customers to be held liable for additional fees tacked on later. The rules vary from state to state and provider to provider, depending on whether the fee is disclosed upfront and what a client’s insurance policy covers.
  • The New York State Department of Financial Services, which regulates insurance firms, published guidelines directing medical, dental, and vision insurers to combat personal protective equipment (PPE) surcharges. Some dentists in New York State and elsewhere are adding a COVID-19 surcharge to help cover the cost of upgraded PPE that they say is essential for keeping employees safe during the pandemic. Insurance companies can't allow dentists in their network to charge members PPE fees and must get previously paid surcharges reimbursed, state regulators said. The American Dental Association has urged dental health plans to begin reimbursing a new fee to cover the expense. Some health plans have done so, but others haven’t, which can leave patients paying the bills.
  • Maryland Attorney General Brian Frosh has issued an advisory, warning dentists that charging PPE fees may violate the Consumer Protection Act. Insurance laws typically prohibit participating providers from charging fees to insured consumers. Kimberly Cammarata, Assistant Attorney General and director of the state Health Education and Advocacy Unit (HEAU), said that the unit has received 17 complaints about PPE fees in the range of $10 - $40 per visit. “We heard anecdotally from other carriers that one provider was charging $172, another was charging $300,” Cammarata said. The fee may be acceptable when patients see an out-of-network provider or don’t have insurance, Cammarata added. The American Dental Association has said that it’s unethical to only charge uninsured patients or only seek reimbursement for these fees from insured patients.
  • The World Health Organization (WHO) issued guidance advising people to delay routine dental cleanings "...until there has been a significant reduction in covid-19 transmission rates, or according to official recommendations at national, subnational, or local levels.” WHO cited the role of aerosols in the “rapid contamination of surfaces and potential for the infection to spread” and called for more research into common dentistry practices that produce the tiny floating particles that might cause infection if inhaled, Reuters reported. “The likelihood of COVID-19 being transmitted through aerosol, micro-particles or airborne particles ... today I think is unknown. It’s open to question at least. This means that more research is needed,” Benoit Varenne, a WHO dental officer, said during a news briefing.
  • The American Dental Association (ADA) released a statement stating that it "respectfully yet strongly disagrees" with the World Health Organization's interim guidance recommending that "routine" dental care be delayed in certain situations because of COVID-19. The ADA Board of Trustees adopted an ad interim policy stating dentistry is essential health care, and will consider it as a resolution during its virtual meeting in October. "Millions of patients have safely visited their dentists in the past few months for the full range of dental services," ADA President Dr. Chad P. Gehani said. "With appropriate PPE, dental care should continue to be delivered during global pandemics or other disaster situations."
  • The Department of Labor has concluded that dentists, dental hygienists, and dental assistants have the highest exposure to the disease, ranking alongside respiratory therapy technicians and oral surgeons. The instruments used by dental practices create aerosol clouds that can hold germs for up to three hours, increasing the odds of exposure for staff if a patient has the coronavirus.

April 10, 2021

  • The National Eating Disorders Association reported a 41% increase in messages to its telephone and online help lines in January 2021 compared with January 2020.
  • Experts say that the increase in eating disorders comes from a mix of relapse cases and disorders that have newly taken hold in the past year. “I’m treating more teenagers, and also more teachers, doctors, nurses, and other first responders and essential personnel,” Whitney Trotter, a registered dietitian and nurse in Memphis, TN, said. “An eating disorder can manifest as a trauma response. Our nervous systems were not meant to deal with a long-term pandemic.”
  • A Cleveland Clinic study completed in late 2020 shows that overweight people are at a higher risk for developing a more severe form of COVID-19, which may require hospital admission, need for intensive care, and the use of a ventilator. The Obesity Society corroborates the Cleveland Clinic’s study, reporting, “people with severe obesity, management of COVID-19 may also be compromised by challenges in diagnosis and treatment caused by the physical effect of their obesity.” More than 70% of adults in the US are overweight or have obesity, the Centers for Disease Control and Prevention reports on its website.
  • Nearly 70% of respondents to a survey conducted by University of Texas researchers reported that it was more difficult to achieve their weight loss goals during the pandemic, with about half spending less time on exercise. The researchers said that interventions including telehealth options and outreach efforts are needed to improve outcomes.
  • Millennials and Generation Z are struggling with weight gain and stress eating, according to a study conducted from October 2 through 6 by V8. Approximately 48% of Gen Z and 55% of Millennial respondents said that they have gained weight during the COVID-19 pandemic. More than 60% of Millennials and Gen Z respondents revealed that they are struggling with mental health due to health, financial and social concerns.
  • More Americans are bypassing weight loss programs and opting for bariatric surgery. Insurance companies United Healthcare and Cigna have seen a demand increase of as much as 24% to 40% during June, July, and August compared to the same period last year, according to Dr. Frank Chae of the Denver Center for Bariatric Surgery. “I think a lot of people are fast tracking their decision process to sign up for surgery in order for them to protect themselves from the adverse effects of COVID-19 complications, which by the way, rises with obesity,” Dr. Chae said.
  • A study by Nutrisystem revealed that sheltering in place led to weight gain of up to 16 pounds for 76% of Americans. Instead of focusing on a “summer body,” Americans are now working towards a “post-quarantine body.”
  • A survey by the American Heart Association and the Mayo Clinic revealed that 15% of respondents gained 1-3 pounds; 34% gained 4-6 pounds; 26% gained 7-9 pounds; and 21% gained 10-20 pounds during COVID-19-related stay-at-home periods. Lack of exercise, stress eating, and extra alcohol consumption were the primary reasons for weight gain.

April 10, 2021

  • Luxury brands will be betting on traditional forms of marketing as the pandemic wanes, according to Vogue Business. Channels including direct mail will be used to diversify from digital advertising, where recent privacy changes make it more difficult for brands to reach customers. “Digital is so fast that we were missing the ability to talk about our brand, what we care about and what we stand for,”  says Mansur Gavriel’s chief executive Isabelle Fevrier. “[Direct mail] is a way for us to tell our story long-form, which appeals to us, because Mansur Gavriel has always been focused on art and photography and [not just clothes].” Digital marketing is also becoming “much more expensive”, she adds.
  • President Biden signed the $1.9 trillion American Rescue Plan Act coronavirus relief package into law in early March, directing a third round of stimulus checks to most Americans. Direct mail advertisers are likely to benefit if the plan helps boost consumer spending by stabilizing consumer finances. The aid comes as millions of Americans struggle to pay for food and housing, and face the loss of eviction protections that expire at the end of March 2021. The Senate bill directs $1,400 payments to individuals earning up to $75,000, but cuts off eligibility for single people earning more than $80,000. For couples who file a joint federal income tax return, the phase-out begins at those making $150,000 and ends at $160,000.
  • A third round of $1,400 checks would allow nearly 23 million adults to pay their expenses for more than four months without going into more debt or using their savings, according to Morning Consult economist John Leer.
  • The state of Virginia has passed a privacy bill which may provide another blueprint that some industry stakeholders would prefer to see replicated in other states and on the federal level. The Virginia Consumer Data Protection Act, which is modeled on a Washington state proposal, would apply only to businesses that have at least 100,000 customers in the state, or any business that makes 50% of its gross revenue from the sale of personal data and processes personal data for at least 25,000 consumers. The bill gives consumers the right to access, correct, and delete the data that businesses collect about them, and the ability to opt out of data collection outright. A major reason why many industry stakeholders back the bill is that it doesn’t give consumers the ability to sue when those data rights are violated, known as a private right of action. Federal and state lawmakers looking to craft their own privacy bills have typically followed two models, the California Consumer Privacy Act and the European Union’s General Data Protection Regulation. While the California and European Union privacy acts include a private right of action in certain cases, debate over whether to include it stalled progress on a privacy bill in Washington state last year and has continued to slow federal efforts. Enforcement in Virginia’s version would sit solely with the state attorney general’s office, and despite the state’s Democratic control, few lawmakers have publicly pushed back against the exclusion of the private right of action.
  • Advertising spending in the US won’t recover until 2023, according to Forrester Research. The advertising industry is expected to lose 52,000 jobs between 2020 and 2021.

May 6, 2021

  • The Small Business Administration (SBA) began accepting applications for Restaurant Revitalization Awards on May 3. Distilleries for which onsite sales to the public comprise at least 33% of gross receipts may apply. Businesses can apply through SBA-recognized point of sale (POS) vendors or directly via the SBA’s online application portal. Participating POS providers include Square, Toast, Clover, and NCR Corporation (Aloha). Businesses working with Square or Toast do not need to register on the application portal. The Brewers Association expects funding to run out before all applicants receive grants.
  • Craft distillers are projected to lose $700 million in annualized sales, a loss of 41% of total craft business, due to lost tasting room sales and lost wholesale sales, according to the Distilled Spirits Council of the United States (DISCUS). DISCUS anticipates an increase in tourism at some point in 2021 that is expected to boost craft distillery sales.
  • A 25% retaliatory tariff on American Whiskey that DISCUS says was imposed by the European Union in response to US Section 232 tariffs on steel and aluminum resulted in American whisky exports to the EU dropping 41%, year over year in 2020.
  • Distilleries are likely to benefit from the addition of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) to the $900 billion coronavirus relief package signed into law in late December. The CBMTRA will make existing federal excise tax rates for distillers and brewers permanent. The current Federal Excise Tax rates for small and independent breweries, which were set to expire on December 31, 2020, could have increased as much as 100% if the CBMTRA was not passed.
  • The Distilled Spirits Council of the United States (DISCUS) has sent a letter to congressional lawmakers asking for economic relief for craft spirits manufacturers. The trade group is asking for suspension of tariffs on distilled spirits, creation of an industry stabilization fund, and ongoing support for low- or no-interest loan assistance. DISCUS says that, while off-premises sales of beer, wine, and spirits have been strong in recent months, distillers are "facing enormous financial hardship" as businesses serving alcoholic beverages, including distillery tasting rooms, have been closed or are reopening to only a fraction of pre-pandemic customer traffic.

April 29, 2021

  • Doll and toy manufacturer Mattel reported a 47% year over year Q1 sales increase, with doll sales increasing 69% led by an 87% gain for Barbie. Sales worldwide for the action figures, building sets, games, and other segment also rose 69%. Sales for the infant, toddler and pre-school, and for the Wheels segments increased 31% and 16%, respectively. Industry experts cited ongoing social distancing measures as key growth drivers.
  • Toy sales increased 16% year over year to $25.1 billion in 2020, according to The NPD Group. Analysts attribute the increase to a shift from spending on summer camps, movie theater tickets, theme parks, or vacations to toys for home use. Parents and grandparents  who experienced “COVID guilt” spent more to treat children with toys during the holiday season.
  • The $1.9 trillion American Rescue Plan Act, which provided a third round of economic stimulus direct payments of up to $1,400 to Americans, also provides an additional $300 per week in unemployment benefits through September 6.
  • Many analysts say that businesses should prepare for an upcoming pandemic-related spending shift that is increasingly referred to as revenge shopping. Shoppers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time. The bounce back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues. A significant portion of sales may shift away from products like dolls, toys, and games as a result.
  • Real disposable income, an indicator of demand for discretionary purchases, decreased 8.2% in February following an 11% increase in January. The January increase, the largest increase in 9 months, was driven in large part by government transfer payments, which rose 52% in January from the prior month, reflecting both stimulus checks and the supplemental $300 weekly jobless benefit payments. Consumer spending decreased 1% in February, following a 2.4% increase in January. Spending and income are expected to rebound in the coming months as more people become vaccinated.

April 29, 2021

  • Dollar Tree plans to open hundreds of new "combination stores" in an attempt to be a one-stop shop for consumers looking to buy pandemic essentials. Company officials say that the stores combine "Family Dollar’s great value and assortment with Dollar Tree’s thrill of the hunt and fixed price-point — creating a new strategic store format targeted for small towns and rural communities with populations of 3,000 to 4,000. These are markets where the company would traditionally not open a Dollar Tree store alone."
  • Discounters like dollar and general merchandise stores are likely to be among the biggest beneficiaries of an expected post-pandemic surge in consumer spending, according to investment bank JP Morgan Chase. Stimulus checks hitting millions of bank accounts, and the enhanced child tax credit included in the relief package mean that many families are receiving more than they did in the other rounds of government aid. The money is arriving as accelerating vaccine rollouts make shoppers more comfortable about going out.
  • Dollar General executives say that the vaccine rollout and a reopening economy would lead to a bigger-than-expected slowdown in sales for discounted groceries, while a new round of stimulus may be tougher for the company to take advantage of than before. “Compared to the previous stimulus rounds, which helped us, the economy is now opening up more. We are competing with other segments of the economy outside of retail for that share of wallet, so how much we get is uncertain,” Dollar General finance chief John Garratt said.
  • The latest round of $1,400 stimulus payments that is going mostly to lower- and middle-income households was expected to provide at least a temporary boost for dollar and general merchandise stores, but Dollar General executives said that there was too much uncertainty about how much the company could benefit to include it in its outlook.
  • The promise of a return to relative normalcy later this year as more Americans get inoculated against COVID-19 has made the boom in pantry stocking, which made Dollar General one of the bigger retail beneficiaries of the health crisis, unlikely to be repeated, Garratt added.

April 15, 2021

  • Oil markets have rebounded from the dramatic drop seen early in the pandemic, but global oil demand over the next several years could vary depending on what policies governments impose to address climate change, according to the International Energy Agency’s (IEA) Oil 2021 report issued in March. Absent behavior and policy changes that curb oil consumption – including rapid electric car adoption, higher fuel efficiency standards, and less oil use in the energy sector – oil demand is set to rise 4% by 2026 compared to 2019 levels. Conversely, less business travel and more teleworking combined with policy shifts to address climate change could reduce oil consumption by 5.6 million barrels per day by 2026. Regardless of climate policy outcomes, the EIA doesn’t think global gasoline consumption will ever recover to levels seen in 2019 amid rising acceptance of electric vehicles and improving fuel efficiency in internal combustion engine vehicles.
  • Low prices and weaker demand have driven down the number of oil rigs in operation. The US rig count as of April 9, 2021 was 432, flat from the prior week and down 170 from a year ago, according to Baker Hughes Rig Count. Propped up by higher oil prices, new US drilling activity is expected to increase throughout 2021, according to the Energy Information Administration (EIA). US crude production is estimated to have fallen to an average of 11.3 million barrels per day (b/d) in 2020 from 12.2 million b/d in 2019. Crude production is projected to reach 11.4 million b/d by the fourth quarter of 2021, then average about 11.9 million b/d in 2022. The EIA expects the price for West Texas Intermediate crude oil to remain above $55 per barrel through 2022.
  • US liquid fuel and petroleum consumption has bounced back from the low point seen in the first half of 2020, according to the Energy Information Administration (EIA). Total US liquid fuels consumption for 2020 averaged 18.12 million barrels per day (b/d), down 2.42 million b/d from 2019. The EIA expects US oil and liquid fuels consumption to rise by 1.32 million b/d in 2021 which will still be below 2019 levels. US natural gas consumption fell 2.1% in 2020, primarily due to less gas use by the power sector. Natural gas consumption in 2021 is expected to decline 0.4%.
  • In the fourth quarter of 2020, six North American exploration and production (E&P) firms filed for bankruptcy, bringing the total number of E&P Chapter 11 filings in 2020 to 46, according to Texas-based corporate law firm Haynes and Boone. Amid continued low oil prices, producers had trouble securing additional credit to stay afloat. The aggregate secured and unsecured debt for North American oil and gas producers in 2020 was comparable to that of the previous downturn in 2016. However, higher oil prices and rising rig counts seems to have slowed the rate of bankruptcies among exploration and production firms.
  • Exploration and production (E&P) companies slashed capital expenditures in 2020. Together, 2020 writedowns by BP, Royal Dutch Shell, and Exxon totaled $51.4 billion, according to Bloomberg. In 2021, US E&Ps are expected to further reign in spending, reducing capex by about 8% compared to 2020, according to a recent Raymond James survey of mid-to-large E&P firms. Firms outside the US are expected to increase capex by about 6%. Capex strategies could change quickly in the second half of 2021 if oil prices move higher. As the pandemic has worn on, energy firms have been under pressure from investors to curtail expenditures in favor of paying dividends to shareholders. Some industry watchers believe that pressure may diminish as long as oil stays in the neighborhood of $60 per barrel.
  • When oil prices hit the $40 per barrel mark in mid-2020, fracking activity was utilizing an unusually high inventory of drilled but uncompleted wells (DUCs) – especially in the Permian Basin. However, some of the DUCs that remain may never be developed because of their age and the efficiency advantages of new wells, according to analysis by Raymond James. The number of DUCs is expected to drop to normal levels by the end of 2021, according to Raymond James. A lower number of DUCs could drive the need for new drilling activity.
  • The pandemic and resulting drop in oil consumption is fueling consolidation in the US shale oil industry, according to the New York Times. In January, Conoco Phillips finalized its acquisition of Texas-based Concho Resources. In October, Chevron completed its purchase of Nobel Energy. Amid higher oil prices and vaccine rollouts, the first quarter of 2021 was marked by more consolidation as larger shale players used their equity to purchase smaller firms that have quality assets and low debt, according to The Wall Street Journal.

April 10, 2021

  • Executives from pharmaceutical distributors Cardinal Health, AmerisourceBergen, and Henry Schein asked the director of the Federal Emergency Management Agency to develop a plan of action “to maximize the resilience and efficiency of the Covid-19 vaccine distribution system by utilizing the entire U.S. commercial medical supply and pharmaceutical distribution system,” according to Bloomberg News. The immunization operation is the largest and most complex public-health effort in U.S. history and requires the entire medical infrastructure, the companies said. The distributors haven’t participated in vaccine distribution. McKesson Corp. is handling two of the three Covid-19 vaccines now available in the US through a federal contract that predates the pandemic.
  • The Food and Drug Administration has postponed hundreds of drug company inspections due to the Pandemic, according to The New York Times. The postponements are creating an enormous backlog that is delaying new drug approvals and leading the industry to warn of impending shortages of existing medicines. Pandemic-related travel restrictions and safety concerns have also hampered the ability to ensure the safety of the ever-increasing number of imported medicines, which make up more than 60% of the drugs sold in the US.
  • The pandemic has worsened shortages of dozens of essential drugs, especially injectable generics, according to CNBC. Industry experts cite supply chain issues related to the offshoring of about 80% of the production of generic drugs and ingredients, principally to India and China in search of lower costs, as the key cause. Martin VanTrieste, a former chief quality officer at pharmaceutical giant Amgen, said that manufacturers are incentivized to move production out of the US to areas with lower labor costs, lower regulatory compliance costs, and direct or indirect government support to build new facilities.
  • Wholesale sales of drugs increased 7.8% in value month over month on an adjusted basis and 6.8% in value in value year over year on an unadjusted basis in February.
  • The largest wholesalers are transparent about their allocation strategies to ensure availability during periods of peak demand and worked with suppliers to increase days-on-hand of critical inventory, such as IV fluids and generic injectables. McKesson allocated antibiotics, statins, antivirals, nebulizer solutions, and respiratory medications. AmerisourceBergen announced a small number of drug shortages.

April 22, 2021

  • Total expenditures on prescription drugs increased nearly 5% year over year in 2020, according to the American Society of Health-System Pharmacists. Prescription drug spending will likely grow by 4% to 6% in 2021. The Society attributed most of the growth to increased utilization, and said that a large pipeline of expensive new drugs, including cancer treatments and specialty medications, could drive costs higher in the future.
  • Pandemic-induced changes in retail pharmacy working conditions have led to growing concerns from many state boards of pharmacy about prescription errors, according to the National Association of Boards of Pharmacy (NABP), a nonprofit that represents state pharmacy regulators. New duties including Covid-19 testing, deep cleaning, and vaccinations leave less time to focus on the safety and health of patients. "Pharmacists are being asked to do additional tasks and aren't necessarily receiving the assistance that they need from their employer," said Al Carter, executive director of the NABP. "That's a huge concern for pharmacists' well-being but also, more importantly, for patient safety."
  • The city of Seattle, WA, and several city and county governments across California have passed mandates requiring some large grocery, food retail, and pharmacy employers to provide hazard pay for frontline workers. The US Congress has not passed any government-funded hazard pay for frontline workers during the pandemic. While a few states have allocated federal CARES Act funding for hazard pay programs, experts say that it is unlikely that the programs will continue or expand without additional federal funding. There are also no national or state laws requiring employers other than the federal government to provide hazard pay to workers during a public health emergency.
  • Retail pharmacies will play a critical role in the next step of combatting the pandemic, according to officials from the National Association of Chain Drug Stores (NACDS). "Based on conservative assumptions, pharmacies have the capacity to meet the demand for 100 million vaccine doses in one month when that level of the vaccine supply is available," NACDS president and CEO Stephen Anderson said in mid-January. Part of President Biden's proposed vaccination plan includes an effort to increase capacity at chain and independent pharmacies.
  • Drug stores and pharmacies that were laying off pharmacists and technicians in the summer are now scrambling to boost staff in preparation for large scale vaccine administration. Walgreens said it plans to hire about 25,000 people, including 8,000 to 9,000 pharmacists and other health care workers, to administer the vaccine. Some firms are reaching out to retired workers and offering signing bonuses.
  • The US Department of Health and Human Services authorized licensed pharmacists to order and administer FDA-approved coronavirus tests, including serology tests.
  • Sales in the health and personal care retailing industry, which includes drugstores and pharmacies, increased 5.7% in value month over month on an adjusted basis and 7.7% in value year over year on an unadjusted basis in March.
  • Employment at drug stores and pharmacies increased 1.1% year over year in February.

April 22, 2021

  • The impact of the coronavirus outbreak on dry cleaning and laundry firms is likely to vary based on each firm’s customer base. Firms heavily dependent upon cleaning business attire are likely to be negatively impacted due to work-from-home measures. Firms deriving significant revenue from business-to-business sales may see revenue rise as clients intensify their cleaning efforts to minimize the possibility of infection. One in six dry cleaners in the US have closed or gone bankrupt, and industry sales are about half of what they were prior to the pandemic, according to the National Cleaners Association (NCA). More than 90% of dry cleaner owners are not taking a paycheck, and about 90% are paying employees out of their savings, according to the NCA.
  • Vaccine distribution gives dry cleaners hope that business will improve as more white-collar workers return to the office. However, the shift to work-from-home is expected to outlast the pandemic. More than 80% of workers say they either don’t want to return to the office or would prefer a hybrid work schedule moving forward, according to a recent survey conducted by Harvard Business School. More than 25% of employees hope to work from home full-time, and another 61% would like to work from home two or three days per week.
  • Nearly 85% of dry cleaning customers say it’s extremely important to feel safe about a dry cleaning establishment’s sanitation practices, according to the recent Cleaner’s Supply Dry Cleaning Consumer Pulse Report. Customers want to know dry cleaners are wiping down surfaces including door handles, counters, and credit card systems and offer contactless drop-off and pick-up. In an earlier Cleaner’s Supply survey, more than 70% of customers said they want touchless payment methods. Half reported they were working from home; half also said they were not wearing nice clothing – neither of which are encouraging for dry cleaners.
  • The National Cleaners Association recommends not shaking clothing; not using the same baskets for loading and unloading dirty and clean laundry; dry clothing thoroughly and not using the short cycle; tag incoming laundry in nylon or plastic bags and let them sit for 24 hours to allow the virus to die; and not reusing bags unless they’ve been washed or sanitized. Additional guidance regarding COVID-19 issued in early April 2021 by the Centers for Disease Control and Prevention (CDC) suggests the virus primarily spreads through the air. The agency said, “It is possible for people to be infected through contact with contaminated surfaces or objects (fomites), but the risk is generally considered to be low.”
  • Firms are advertising to let customers know they are open, that curbside drop-off and pick-up are available and if hours have changed. They are advertising laundry service as a means of battling coronavirus and making more pickup/deliveries. Some are installing plexiglass barriers at counters, according to a survey by American Cleaners. Adding sanitizing features to existing laundry equipment can help draw in wash-dry-fold customers, differentiate from competitors, and generate additional revenue, according to American Coin-op. Sanitizing features include the injection of ozone gas to cold water intakes, which kills bacteria and viruses. Dry cleaning and laundry service locations that offer no-touch features such as a drive-thru or pick-up/drop-off lockers may be advantaged.
  • While services like wash-dry-fold and free pick-up and delivery aren’t new, more customers are finding them helpful as they spend more time at home, according to American Drycleaner. Some cleaners are revamping their websites’ search engine optimization (SEO) strategies and placing online ads to boost their ranking in search engines and keep customers informed about service offerings.
  • Dry cleaners that have seen business drop off during the pandemic may seek relief via the reauthorization of the Paycheck Protection Program (PPP). The PPP was revived with the December passage of the $900 billion COVID-19 Economic Stimulus Relief Act. The legislation includes $300 billion in funding for Small Business Administration (SBA) loans. The most recent round of PPP lets eligible borrowers get a second draw loan. It also simplifies loan forgiveness for loans under $150,000 and makes forgiven loans tax deductible. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act which included an additional $7.25 billion for PPP. The PPP is set to wind down on May 31, but funding could run out before then. As of mid-April, the program had $44 billion in funding left, according to the SBA.
  • In the most recent American Laundry News Your Views survey, 80% of laundry owners said they made operational changes in response to COVID-19. Of about 20% of laundry managers who didn’t make changes, 60% said it was due to an existing emphasis on cleanliness prior to the pandemic. Key steps managers took included employee temperature checks, increasing wash temperatures, and daily electrostatic spraying. More than 70% of laundry managers say their changes in cleaning protocol will stay in place even after the pandemic.
  • Some fashion industry insiders report an uptick in store traffic and consumer interest in updated wardrobes as vaccine distribution has surpassed initial expectations. The CEO of Gap Inc. said she expects consumers to embrace “peacocking” – showing off new looks amid warmer weather and a broader reopening of the economy. Some retailers have reported increased consumer interest in dressier clothing as more people prepare for returns to the office and travel. More than half of US consumers plan to purchase apparel in the coming months, according to market research firm NPD Group. Industry watchers suggest consumer demand for fresh apparel looks has been pent-up during the pandemic. The recent round of $1,400 stimulus checks is also projected to help drive apparel spending. Increased spending on nice clothing could be a bellwether for improved dry-cleaning demand.

May 12, 2021

  • All 50 states have either opened coronavirus vaccinations to everyone eligible under US Food and Drug Administration emergency use authorizations, or have announced when they plan to do so. For all states currently vaccinating anyone 16 and older, people ages 16 or 17 can only receive a Pfizer/BioNTech vaccine, as it is the only option authorized for use in that population so far. The vaccines made by Moderna and Johnson & Johnson are authorized for use in adults 18 and older.
  • Spending on home improvements and repairs increased more than 3% year over year in 2020 to nearly $420 billion, according to the Harvard Joint Center for Housing Studies. The increase occurred despite 3.5% shrinkage in the overall economy.
  • Drywall prices increased 20% year over year in January, according to an Associated Builders and Contractors analysis of US Bureau of Labor Statistics’ Producer Price Index data. ABC Chief Economist Ken Simonson cited pandemic-related supply chain issues as a key cause of price increases. Other industry experts note additional causes, including West Coast wildfires during 2020 and contractors hoarding materials to continue building homes during the shutdown.
  • Pandemic-induced material shortages will continue into 2021, according to the Q4 2020 US Chamber of Commerce Commercial Construction Index. About 71% of contractors surveyed for the report said that they are facing at least one material shortage. Price increases for materials like scrap steel and gypsum drywall are also expected to continue into 2021.
  • Construction workers are five times more likely to be hospitalized with COVID-19 than their peers in other professions, according to a University of Texas at Austin study. Lauren Ancel Meyers, one of the study authors, said that the findings don’t necessarily mean construction work needs to stop. “It means we need to go to great lengths to ensure the health and safety of workers when they do go to work.”
  • Total construction spending increased 0.2% month over month on an adjusted basis and 5.9% year over year on an unadjusted basis in March, according to the US Census Bureau. Residential construction spending increased 1.7% month over month and 22.8% year over year in March. Nonresidential construction spending decreased 1.1% month over month and 7% year over year in March.
  • Employment in the specialty trade contracting industry increased 15.5% year over year in April. The large increase is likely due to the effect of the large, pandemic-related employment decrease in April of 2020.
  • The number of building permits issued increased 2.7% month over month and 30.2% year over year in March. Housing starts increased 19.4% month over month and 37% year over year in March. Housing completions increased 16.6% month over month and 23.4% year over year in March.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, increased to 83 in April from 82 in March. The Index was at 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. The outlook for home sales in six months decreased to 81 from 83 in March, but was up from 80 in February, The buyer traffic component of the Index increased to 75 in April from  72 in March.

May 6, 2021

  • Scotia Capital analyst Andrew Weisel said he expects a "delightfully boring" first-quarter 2021 earnings season. "This should be the least eventful quarter in nearly two years," Weisel wrote in an April 20 research report. "We believe that some of the excitement about incremental support for renewables and decarbonization-enabling technologies earlier in 2021 might have been a bit overdone, but see a stellar outlook even without any new support from D.C.," Weisel added.
  • President Biden's 10-year, $2 trillion American Jobs Plan to invest in infrastructure improvements calls for the modernization of the country's aging electric grid, which Biden wants to produce 100% carbon-free electricity by 2035. The plan proposes $100 billion in spending on upgrading and building out the nation's aging and regionally siloed electric transmission system. The plan also asks Congress to provide $35 billion to develop technology to address climate change and develop clean energy resources. Key Republican legislators have expressed opposition to some aspects of the plan, however. Representative Sam Graves, the senior Republican on the federal House Committee on Transportation and Infrastructure, said that he told President Biden that his plan to rebuild US infrastructure will lose GOP support if it adds to the deficit or delves into issues beyond roads and bridges, such as expanding clean power sources. Axios news services said that President Biden's transition team indicated to business leaders in December 2020 that it sees an opening to use an infrastructure deal as a driver for more economic and job relief as the US emerges from the coronavirus pandemic.
  • Monthly home electricity usage increased an average of 22% year over year beginning in March 2020, according to data analytics firm Sense. Mid-day energy usage was the biggest factor in driving up energy demand. Home energy usage typically drops in the middle of the day between 10 am and 4 pm, when many people are away from home for work or school. That changed soon after state emergencies were announced in March 2020 but well before state stay-at-home orders were issued. The average home showed steadily rising energy usage starting at 5 am and peaking at 4 pm, followed by decreasing use through the evening and overnight.
  • Legislation introduced in the US Congress would provide $10 billion in utility debt relief for Americans struggling during the COVID-19 pandemic. The Energy Debt Relief for American Families Act would provide funding to states through the Low-Income Home Energy Assistance Program (LIHEAP) to pay down utility bills in arrears. The National Energy Assistance Directors’ Association estimates that 15% to 20% of residential customers are at least 60 days behind on their electric and natural gas bills. The sponsors of the legislation say that it would stop utility companies from being forced to either push the cost of “bad debt” to the rest of their customer base in the form of higher rates or impose cutbacks on assistance to struggling customers.
  • State regulators will allow Georgia Power to eventually recoup the cost of personal protective gear, extra cleaning services, overtime, and meals for the company’s frontline essential workers. The costs will be recouped from customers. Georgia Power will also be allowed to add the value of bills that go unpaid due to the pandemic into rates to be collected from customers. The added costs from bad debt and the coronavirus expenses will be factored in the next time Georgia Power reviews its rates with the state Public Service Commission in 2022.
  • At least 35 states either have granted utility requests for “accounting orders” or are poised to do so, according to Utility Dive. Accounting orders allow utilities to record on their books an offset known as a “regulatory asset,” which is a shareholder asset entirely backed by regulations that allow utilities operating as monopolies to recoup losses through surcharges at a later date that would not be possible in a competitive market. The accounting orders consist primarily of the rising “bad debt” associated with unemployed customers who cannot pay their bills, according to Utility Dive. These regulatory assets earn a return at an amount calculated by the regulator. In Wisconsin, for example, utilities have asked that their regulatory asset accounts grow at between a 7.22% and 7.77% annual return. A Wisconsin utility that couldn't collect $100 million from its customers during the pandemic ultimately would be able to collect $115 million in two years.

May 12, 2021

  • Residential construction employment is back to its pre-pandemic level of February 2020, while non-residential has regained only 51% of those jobs, according to Ken Simonson, chief economist at Associated General Contractors of America.
  • Electrical contractors are benefiting from pandemic-driven demand growth for data and services accessed via the Internet. Capital expenditures on hyperscale data centers by the 20 largest cloud and internet service companies in the world hit a record-breaking $37 billion in Q3 2020, according to Synergy Research Group. Data center spending by these companies from January 2020 to September 2020 totaled $99 billion, up 16% year over year. More than 100 new hyperscale data center facilities were built during 2020, taking the total number to almost 600. Synergy Group analysts cite new, pandemic-driven business models that emphasize cloud-based computer services as a key driver of increasing spending on hyperscale data centers.
  • Wind and solar power facility installations increased 61% year over year in 2020, according to BloombergNEF and Business Council for Sustainable Energy. About 34 gigawatts was added to the grid in 2020, nearly 50% more than the previous record, set in 2016. Electrical contractors are likely to have benefited and are likely to benefit from the extension through 2022 of a federal solar tax credit that was set to expire in 2020.
  • Construction industry experts expect a surge in commercial renovations in 2021 due to tax changes included in the 2020 CARES Act. Facility upgrades qualified for tax deductions before the passage of the CARES Act, but to reap the full benefits, facility managers had to claim a 2.5% write-off each year for up to 39 years. With the passing of the 2020 CARES Act, facility managers can write off 100% of qualifying facility improvement costs in the first year. A few improvements that qualify for the tax deduction are the installation of airflow management accessories, HVAC devices, and physical security and access control solutions.
  • Attorneys at Atlanta-based law firm Fisher Phillips told contractors that it is within their legal rights to compel workers to get vaccinated against COVID-19. Requiring construction workers to get a coronavirus vaccination is comparable to existing rules for healthcare workers that make flu shots mandatory in order to protect all patients and staff and keep the workplace safe, the attorneys said. The attorneys also recommended that contractors set up programs to administer vaccines on jobsites, during work hours, and free of charge, in order to get the highest participation possible while ensuring projects continue to move forward.
  • Employment in the specialty trade contracting industry increased 15.5% year over year in April. The large increase is likely due to the effect of the large, pandemic-related employment decrease in April of 2020.
  • Total construction spending increased 0.2% month over month on an adjusted basis and 5.9% year over year on an unadjusted basis in March, according to the US Census Bureau. Residential construction spending increased 1.7% month over month and 22.8% year over year in March. Nonresidential construction spending decreased 1.1% month over month and 7% year over year in March.
  • The number of building permits issued increased 2.7% month over month and 30.2% year over year in March. Housing starts increased 19.4% month over month and 37% year over year in March. Housing completions increased 16.6% month over month and 23.4% year over year in March.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, increased to 83 in April from 82 in March. The Index was at 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. The outlook for home sales in six months decreased to 81 from 83 in March, but was up from 80 in February, The buyer traffic component of the Index increased to 75 in April from  72 in March.

April 12, 2021

  • Capital expenditures on hyperscale data centers by the 20 largest cloud and internet service companies in the world hit a record-breaking $37 billion in Q3 2020, according to Synergy Research Group. Data center spending by these companies from January 2020 to September 2020 totaled $99 billion, up 16% year over year. More than 100 new hyperscale data center facilities were built during 2020, taking the total number to almost 600. Synergy Group analysts cite new, pandemic-driven business models that emphasize cloud-based computer services as a key driver of increasing spending on hyperscale data centers.
  • Construction industry experts expect a surge in commercial renovations in 2021 due to tax changes included in the 2020 CARES Act. Facility upgrades qualified for tax deductions before the passage of the CARES Act, but to reap the full benefits, facility managers would have to claim a 2.5% write-off each year for up to 39 years. With the passing of the 2020 CARES Act, facility managers can write off 100% of qualifying facility improvement costs in the first year. A few improvements that qualify for the tax deduction are the installation of airflow management accessories, HVAC devices, and physical security and access control solutions.
  • Dodge Data & Analytics predicts 4% growth in total construction starts for 2021. Total residential starts are expected to rise 5%. Nonresidential construction is expected to decrease 9.3%.
  • Total construction spending decreased 0.8% month over month on an adjusted basis but increased 3.4% year over year on an unadjusted basis in February, according to the US Census Bureau. Residential construction spending decreased 0.2% month over month but increased 19.7% year over year in February. Nonresidential construction spending decreased 1.3% month over month and 7.8% year over year in February.
  • Electrical equipment distributor industry employment decreased 5.7% year over year in February.
  • Demand for electrical equipment is tied to commercial construction. The US Chamber of Commerce’s Commercial Construction Index (CCI) increased to 62 in Q1 from 60 in Q4 2020. The Index score was 74 for Q1 2020, which at the time was in the midrange of scores since the Index began in 2017. The main factor driving an increase in the CCI was increasing revenue expectations. Revenue—one of the overall Index’s three main indicator scores—increased five points this quarter to 57.
  • Distributor sales and marketing have largely moved online along due to social distancing requirements. Distributors have cutback travel to conferences and are attending virtual conferences and product training sessions when available. Distributors are also recognizing the importance of having a disaster recovery or emergency preparedness plan.

April 28, 2021

  • President Biden has promised to have at least 500,000 electric vehicle charging devices installed across the US by 2030. Biden has prioritized a national EV charging network under his $2 trillion infrastructure bill. The Biden administration announced a $174 billion plan to spur the development and adoption of electric vehicles that includes money to retool factories and boost domestic supply of materials, tax incentives for EV buyers, and grant and incentive programs for charging infrastructure.
  • Electrical equipment manufactures may not be able to maintain adequate supplies of components that require semiconductor chips. One specific bottleneck is a type of semiconductor called microcontrollers, very small computers—that are used for things such as engine control systems, according to New Street Research analyst Pierre Ferragu. The semiconductor shortage is likely to be particularly disruptive firms supplying auto manufacturers because the production of vehicles relies on dozens of computer chips for electronic components that control engines, transmissions, entertainment systems, brakes and other systems. Both General Motors and Ford have estimated that the shortage will lower their operating profit by at least $1 billion this year.
  • Total US energy consumption, a driver of demand for electrical equipment, decreased 7.8% in 2020 but is expected to increase 2.6% in 2021 and 2.5% in 2022, according to the US Energy Information Administration.
  • Employment in the electrical equipment manufacturing industry decreased 9% year over year in February.
  • Electrical equipment manufacturers, particularly those that need rare earth magnets to make motors and generators, may benefit from attempts to reduce US reliance on rare earths imports from China. Rare earth metals are used in the production of high-tech goods, including smartphones, electric vehicles, and modern defense systems. The RARE Act introduced in the US Congress in September 2020 would provide tax incentives through deductions on property used for the mining and on the purchase of materials extracted within the United States. It would also create a $50 million yearly grant program through the Secretary of the Interior through the next four fiscal years. China produces over 85% of the world’s rare earth materials, and most US imports of them come from China, according to the Center for Strategic and International Studies (CSIS).
  • Electrical utility industry revenue is expected to be flat in 2021 before rising 7.8% in 2022. With electrical utilities suffering losses, demand for equipment is likely to stall.
  • US production of electrical equipment decreased 3.8% year over year in March, but was up 8.3% from the low posted in May 2020.
  • Imports of electrical equipment decreased 0.4% year over year in the first two months of 2021 while exports decreased 10%.

April 18, 2021

  • The pandemic has executives in industries including electronic component manufacturing re-thinking their supply chains. Manufacturers surveyed in early 2021 by IHS Markit said that the "stretching of supply chains" over the last year has extended delivery times to levels "unsurpassed in over 20 years of data availability." More emphasis on flexibility and less on cost reduction will be vital for company profits going forward.
  • Rising prices for copper and other metals and potential shortages of multilayer ceramic capacitors, power MOSFETs and other components are some of the supply chain challenges that electronic components manufacturers say they will face in 2021, according to Electronics Sourcing magazine. Another issue of growing concern is supplier consolidation. “When this happens, we often see that product availability is impacted due to rationalization of products, which in effect leads to end-of-life of redundant or similar products,” said Shabnam Shaghafi, vice president of supply chain for EMS provider Benchmark Electronics. Consolidation-driven product rationalization may force the redesign of electronic components ahead of schedule.
  • Several industry analysts expect new auto sales to increase about 6.9% in 2021. The National Automobile Dealers Association expects 2021 sales of 15.5 million. Forecasters at car-shopping web site Edmunds also predicted 2021 sales of 15.5 million. Charlie Chesbrough, senior economist for Cox Automotive, said that Cox expects 2021 sales of 15.7 million. US auto sales in 2020 were 14.5 million, down 15% from 2019. It was the fourth-largest annual decline since at least 1980.
  • Auto manufacturers are cutting or stopping production due to shortages of critical microprocessors and other computer chips. The problem is exacerbated by the rebound from the Covid-19 pandemic that led to lengthy factory closures last spring, said Kristin Dziczek, a senior industry analyst with the Center for Automotive Research. Manufacturers have ramped up production to respond to inventory shortages, putting them into competition for chips with a consumer electronics industry facing its own surge in demand.
  • The United States must find a path to domestic sources for the important microelectronics that are used in defense weapons systems, according to US Department of Defense (DOD) Under Secretary of Defense for Acquisition and Sustainment Ellen M. Lord. "While we still design components, [field-programmable gate arrays], [application-specific integrated circuits], and printed circuit cards in the US, the majority of fabrication, packaging, testing etc., is done offshore," Lord said. "We can no longer clearly identify the pedigree of our microelectronics. Therefore, we can no longer ensure that backdoors, malicious code or data exfiltration commands aren't embedded in our code."
  • Employment in the electronic component manufacturing industry decreased 2.6% year over year in February.
  • Multinational banking and financial services corporation ING doesn't expect major changes in the length or location of global value chains in direct response to Covid-19. The coronavirus outbreak has led to many calls for more resilient production chains, but in the industries that ING studied, the sheer number of suppliers and their concentration in specific regions present major obstacles to diversifying risks. Specialization in electronics value chains makes it difficult for firms to diversify their suppliers across countries to increase supply chain resilience. ING cites South Korea, the major exporter of memory chips, as a prime example. Although some other countries produce memory chips, quantities are not sufficient to meet global demand in the event of a shock affecting the supply of South Korean producers.

April 22, 2021

  • A plan by E-commerce giant Amazon to open electronics and appliance stores was suspended after a pandemic-driven surge in spending forced the company to prioritize the handling of day-to-day demand and the launch of its Fresh grocery store, according to Bloomberg News. An anonymous source told Bloomberg that the idea for a consumer electronics and home goods store was "a way to be able to clean out warehouses, and get through inventory without having to destroy it." Analysts note that Amazon has launched similar bricks-and-mortar stores in the past, and may revisit the idea post-pandemic.
  • A significant number of appliance categories are on a 90- to 120-day back order due to component shortages and social distancing in factories, according to industry veterans. There are severe component shortages for dishwashers and refrigerators, and material shortages such as rolled steel. Many customers are deciding that getting a brand name item is much less important than getting an item that is currently in stock.
  • Retail sales for the electronics and appliance store industry increased 10.5% in value month over month on an adjusted basis and 29.4% in value year over year on an unadjusted basis in March.
  • Best Buy is expanding its test of a new store format that reduces the space for customers to browse by nearly half. The electronics retailer’s experiment shows how retailers are adapting their business models to cope with the sharp uptick in e-commerce during the pandemic. The new format, first tested in late 2020 at four locations near Best Buy’s Minneapolis headquarters, provides additional space to prepare digital orders for pickup or delivery from the store. Some of the additional floor space in a few locations could be devoted to the retailer’s Geek Squad service desk.
  • Research firm Moody's Analytics says that retailers can expect increasingly favorable operating conditions in 2021 as the economy gradually rebounds from the effects of the Covid-19 pandemic. “Our current 2021 forecast is for 6.2% growth in core retail sales,” said Scott Hoyt, senior director of consumer economics for Moody’s Analytics.
  • Employment in the electronics and appliance store industry decreased 9.3% year over year in March but was up 20% compared to the low of May 2020.

April 22, 2021

  • On April 21, the 7-day average for new cases was about 64,000 – about the same daily level had remained consistent for a month. Hospitalizations were rising but deaths continued to drop. Some health experts are concerned that the spread of more communicable coronavirus variants combined with vaccine reluctance could lead to fresh outbreaks and prolong the attainment of herd immunity. As of April 21, 213 million doses of vaccine had been administered and 26% of the US population was fully vaccinated. Demand for employment services may rise if infections continue to slow and more parts of the economy rebound. The American Staffing Association’s Staffing Index was up 33% over the four weeks ending April 11, 2021 compared to a year earlier. However, a year earlier much of the economy was under lockdown.
  • As of April 9, 2021, job postings on Indeed were 17.9% higher than they were on February 1, 2020 – Indeed’s pre-pandemic baseline. Many sectors are experiencing a major boom in job postings, including loading & stocking (+61.5%), production & manufacturing (+60.1), pharmacy (+55.7), and construction (+53.7). Hospitality & tourism, and beauty & wellness continue to struggle; the sectors were down 17.1% and 2.7%, respectively. Sectors performing close to the average for all US postings included retail (+18%), software development (+16.8), banking & finance (+15.2), and food preparation & service (+13.6%).
  • The US economy added 916,000 jobs in March 2021, according to the Bureau of Labor Statistics and the unemployment rate fell to 6% compared to February. New jobless claims were 576,000 the week ending April 10. In March, 9.7 million people were unemployed, about 4 million more than were unemployed in February 2020.
  • US average shift work volume fell 1.2% in March compared to the prior month, according to data compiled by HR solutions firm Ultimate Kronos Group (UKG). March started strong but all major sectors saw shift work erosion in the second half of the month and finished March with minor declines. Healthcare experienced the biggest drop with shiftwork off 2.2%, followed by public sector (-1.9%), manufacturing (-1.6%), services and distribution (-1.2%), and retail, hospitality, and food service (-0.3%). The UKG Workforce Recovery Scale was 85.5 in March, down 1.1 points from February. The UKG Workforce Recovery Scale in April 2020 hit a low of 66.8.
  • Glassdoor developed a dedicated COVID-19 job search hub and a hiring surge explorer, so job seekers can filter and see industries and cities where hiring is strong. Job seekers can also filter listings for work-at-home jobs. Working from home was born out of necessity for many companies at the onset of the pandemic. As some types of jobs become less tethered to physical workplaces, employment services may have to adapt to locating the best candidates regardless of where they live. More than 80% of workers say they either don’t want to return to the office or would prefer a hybrid work schedule moving forward, according to a recent survey conducted by Harvard Business School.
  • The US jobs market may be recovering, according to the latest quarterly Business Conditions Survey conducted by the National Association for Business Economics (NABE) and released in January. The survey showed that 30% of NABE member respondents said they planned to increase employment, which was up from the 16% who said they planned to increase employment in the previous quarter’s survey. The number of survey participants who said they planned to decrease employment fell from 15% to 10% during the same period.
  • Temporary staffing revenue is expected to rise 11% to $134.7 billion in 2021 after a decline of 8% in 2020, according to a Staffing Industry Analysts (SIA) forecast released in April. The new SIA forecast expects strong GDP growth in 2021 as more people become vaccinated, the economy continues to reopen, and government stimulus helps drive economic growth. Temporary staffing revenue in education will see the strongest growth in 2021 with a rise of 25% after school closures reduced demand for most of 2020. A 16% increase in industrial staffing revenue will be driven by recovery in the manufacturing and hospitality sectors. Other key areas of temporary staffing growth will include travel nursing (+10%), and IT (+9%).

May 6, 2021

  • Engineering services may benefit from increasing use of robots and robotic technology resulting from the coronavirus pandemic. Orders for robots in North America, mostly the US, increased 20% year over year in Q1 and were up 16% compared to the same period in 2019, according to the Association for Advancing Automation. The Pennsylvania Turnpike eliminated toll collection by hand and switched to a cashless electronic system. Procter & Gamble, maker of detergents, diapers, toilet paper and a cornucopia of other household goods, found that strategically adding robots to its assembly lines made it possible to keep more workers on the job and produce more goods while complying with social distancing guidelines.
  • Unintended consequence of the Federal Acquisition Regulation (FAR) could prevent small engineering firms working with state departments of transportation and other government clients from receiving assistance through the Paycheck Protection Program (PPP), according to several industry advocacy groups. The FAR "credits" clause (FAR 31.201-5) is being interpreted to apply to forgiven PPP loans, which would require a refund or a reduction in the amount of the PPP loans that are allocable to contract costs. For most engineering companies, this will result in a reduction in their future billing rates, advocates say. Depending on how this credit is applied, some firms could lose more than the loan amount, especially in the case of multi-year contracts. "We need our small engineering firms working with their public sector clients now more than ever, but this policy could force them to walk away or work at a loss," said the President and CEO of the American Council of Engineering Companies.
  • Engineering services are playing a major role in the pandemic-driven attempt to increase rural broadband access. Typical steps for bringing broadband to a community that require the participation of engineering services include conducting feasibility studies and determining return on investment (ROI), preparation of funding applications based on feasibility studies and ROI, creating and finalizing deployment plans after funding is approved, and overseeing broadband system deployment.
  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. The SBA approved 3.6 million loans worth $211.8 billion as of March 28, which covers about 75% of the $284 billion that was allocated to the program when it reopened in January. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Total construction spending increased 0.2% month over month on an adjusted basis and 5.9% year over year on an unadjusted basis in March, according to the US Census Bureau. Residential construction spending increased 1.7% month over month and 22.8% year over year in March. Nonresidential construction spending decreased 1.1% month over month and 7% year over year in March.
  • Engineering industry employment was increased 3.5% year over year in March and was up 3.7% from the pandemic-related low of April 2020, according to the US Bureau of Labor Statistics.

May 11, 2021

  • As the pace of reopening has varied by state, some environmental consulting firms that operate across state lines face a patchwork of state-level regulations which can change suddenly. Industry insiders recommend field consultants work very closely with their firm’s general counsel office to ensure they are in compliance with the state regulations where they are operating.
  • The $1.9 trillion America Rescue Plan Act signed by President Biden in March includes $100 million in funding for grants and other activities aimed at reducing environmental health risks in minority and low-income communities. A growing list of studies suggest that areas with high levels of air pollution can experience higher deaths from COVID-19 or experience more severe outbreaks. The funding will be administered by the Environmental Protection Agency (EPA).
  • As businesses, schools, universities, and other public indoor spaces reopen, it may create opportunities for consulting firms with expertise in maintaining indoor environmental quality. Facilities may seek consulting expertise to ensure proper sanitization and ventilation. Consultants can offer third-party assessments and inspections for cleaning and disinfection policies and procedures, HVAC ventilation evaluations, air and surface testing for pathogens, and indoor environmental safety training.
  • Prior to the pandemic, government and consumer pressure was building to regulate single-use plastic products and their impact on the environment, especially oceans. The spread of COVID-19 greatly increased waste from single-use products, including masks, plastic gloves, and food containers. The impact of this increase in waste may prompt companies, industries, and governments to perform life-cycle assessment (LCA) studies to determine product development initiatives and government regulations. However, critics of the LCA process argue the studies can often be skewed to further a corporate or government agenda. The need for improved public perception and transparency could drive demand for environmental consultancies to perform independent LCAs and/or provide peer review services for LCAs produced by corporations and governments.
  • The pandemic is expected to hasten the adoption of remote sensors and other digital tools that can help environmental consultants monitor conditions in the field. Restrictions on travel and social distancing requirements challenged some firms’ ability to perform environmental field work and maintain optimal levels of regulatory compliance. Advanced sensors - monitored via cloud-based mobile aps - can make compliance faster, less costly, and more efficient.
  • Some large consulting firms are seeing less demand for corporate restructuring advice as economic conditions have improved compared to earlier in the pandemic, according to The Wall Street Journal. Consultancies are helping clients focus on other areas, including environmental, social, and corporate governance (ESG) issues. Many restructuring firms and investment banks believe corporate restructurings will continue to taper off in 2021 compared to 2020, but will still be high compared to pre-pandemic levels.
  • The COVID-19 pandemic has increased consumer concerns about sustainability, according to a recent survey of 14,000 consumers in nine countries by the IBM Institute for Business Value (IBV). Nine in 10 respondents said the pandemic had affected their views on environmental sustainability, more so than other types of disasters, including severe weather and wildfires. More than two-thirds of consumers felt corporations would face increased public scrutiny regarding corporate environmental policies over the next year. Nearly 55% of those surveyed said they would be willing to pay more for brands that are sustainable and/or environmentally responsible. Heightened consumer awareness of sustainability issues might increase demand for consultants who can help firms develop and implement sustainability goals.

April 13, 2021

  • Corporate bankruptcy filings increased in March to levels not seen since the worst days of the COVID-19 pandemic. Sixty-one companies entered bankruptcy proceedings in March, nearly doubling February's total of 34 and marking the highest one-month count since July 2020, according to S&P Global Market Intelligence data. As of March 31, 138 companies have announced bankruptcies so far in 2021. That is fewer than the 153 filings at the same time in 2020 and a slower pace than all but four of the prior 11 years — 2014, 2015, 2017 and 2018.
  • A larger share of distressed companies upended by the COVID-19 pandemic is using court processes to restructure instead of close, according to S&P Global Market Intelligence. Nearly 62% of corporate bankruptcy filings in 2020 sought reorganizations, the highest rate for any year going back to at least 2010. Companies were less likely to liquidate in 2020, a departure from 2019 and 2018 when corporate liquidations outpaced reorganizations in bankruptcy filings. As of March 30, the share of filings seeking restructuring is larger in 2021 than in 2020.  S&P analysts note that government stimulus and easy access to capital have kept at-risk companies from entering bankruptcy following a jump in filings during the early months of the pandemic in in 2020, but bankruptcies are likely to pick up again later in 2021 as companies confront the aftershocks of the pandemic.
  • Industry employment decreased 6.2% year over year in February but was up 5.5% from the pandemic-related low of April 2020.
  • The prices that commercial machinery repair and maintenance services charge increased 3.1% year over year in March.
  • Capacity utilization for the manufacturing sector as a whole, an indicator of demand for equipment and machinery repair, increased from a low of 60.4% in April 2020 to 72.3% in February, approaching the 75% level achieved in 2019. Total capacity utilization, including factories, mines and utilities, increased to 73.8% in February. That rate compares with 76.9% in February 2020.
  • Construction firms are using remote monitoring to connect to equipment and determine if repairs are needed. Equipment repair services can link into these same systems to diagnose equipment remotely and bring parts and tools needed to the site to make repairs more quickly. Repair services can also work remotely with a client to troubleshoot equipment malfunctions and minor repairs.
  • Maintenance and repair organizations (MRO) are expected to postpone acquisitions and divestments during the pandemic, according to Beroe Inc, a North Carolina-based procurement intelligence firm. MROs are also having some difficulty sourcing parts for equipment that is produced outside of North America and may look to build supply partnerships with Canada and Mexico to reduce reliance on Asian suppliers.

May 6, 2021

  • US Education Secretary Miguel Cardona said in early May that he expects  all schools to be open full-time in person for all students in the fall. Demand for tutoring services may revert to pre-pandemic levels if the expectation is met. About 54% of public schools below high school were providing full-time in-person learning in early May, up from 46% in January, according to a survey released by the Education Department.
  • About 43% of tutors surveyed by online tutoring platform Wyzant said that the pandemic was causing learning loss among their students, and nearly one-third of respondents said they believe that some of their students will never catch back up. About 78% said that their students who are studying remotely need the most help.
  • Heightened demand for tutors of certain subjects indicates where students may be struggling most with the remote learning format, according to a survey conducted by online tutoring platform Wyzant. STEM subjects account for many of the increases in Wyzant’s business in 2020, including a more-than 100% hike in demand for organic chemistry tutors and an approximately 600% increase in demand for help with macroeconomics.
  • Students continue to take exams like the SAT and ACT despite the fact that more many colleges stopped requiring them for admissions. Education experts say that demand for the test is being sustained by their use in determining the winners of academic scholarships. Colleges and universities including Loyola University Chicago, Clemson University, and the University of Oklahoma, have made scores optional for admission but continue to require test results for their most prestigious merit scholarships. Students who are among the top PSAT scorers could earn $68,500 from the University of Oklahoma, which would cover full tuition for an in-state student. Some state-run scholarship programs, including in Idaho and Florida, also continue to require students to have an SAT or ACT score to be considered.
  • The Brookings Institution found that more than four-fifths of the tutoring programs that were examined since the pandemic started resulted in "statistically significant" improvements for the students involved.
  • Some school districts have announced that employees who try to lead tutoring pods while keeping their regular teaching jobs may be fired. “As a reminder…[Arlington Public Schools] teachers are not permitted to take on additional positions such as tutoring or learning supervision during the school day,” officials in the Northern Virginia district wrote in a recent message to staff. “Nor are they allowed to tutor students they work with…outside of the classroom for pay.” Some school leaders contacted by The Washington Post said they could not estimate the number of pod leaders in their ranks. Industry experts say that data on how many teachers are leading pods is difficult to gather because many educators are hiding their activities from school districts.
  • Over 1,450 colleges and universities have dropped standardized testing requirements for fall 2021, according to the National Association for College Admission Counseling. Some institutions are entirely abandoning the SAT and ACT as a requirement for applicants. Many industry experts say that, in a year when most seniors can’t take the test, some students believe that a score will tip the scales for them. Experts also note that schools that have chosen "test optional" policies have created confusion among students and families about the role that scores play in the admission process. Test-optional means that students may submit standardized test scores on their application, but they are not required to. Going test-optional doesn’t mean that a college won’t look at scores.
  • The private tutoring market, which includes Chegg, Club Z, and Varsity Tutors, is projected to grow in the US by $7.37 billion by 2023, at a compound annual growth rate of almost 8%, according to Technavio. Varsity Tutors, a live learning platform connects students with tutors, who work as independent contractors, "... is experiencing unprecedented demand, as students — especially [those in] kindergarten through fifth grade, who have historically been less receptive toward online learning — work to stay

April 20, 2021

  • The Centers for Disease Control and Prevention said in April that, based on analysis of the latest available data, cleaning once a day is usually enough to minimize the chance of coronavirus transmission in most settings. Fabric mills supplying nonwoven fabric to manufacturers of cleaning wipes may be negatively impacted if demand for the wipes decreases. The CDC did identify one appropriate situation for deep cleaning: an indoor environment where a case of COVID-19 had been confirmed within the past 24 hours.
  • Several industry analysts expect new auto sales to increase about 6.9% in 2021. Fabrics are used in the manufacture of auto seating and auto floor coverings. The National Automobile Dealers Association expects 2021 sales of 15.5 million. Forecasters at car-shopping web site Edmunds also predicted 2021 sales of 15.5 million. Charlie Chesbrough, senior economist for Cox Automotive, said that Cox expects 2021 sales of 15.7 million. US auto sales in 2020 were 14.5 million, down 15% from 2019. It was the fourth-largest annual decline since at least 1980.
  • President Biden signed the $1.9 trillion American Rescue Plan Act coronavirus relief package into law in March, directing a third round of stimulus checks to most Americans. Fabric mills are likely to benefit if the plan helps boost consumer spending by stabilizing consumer finances. The aid comes as millions of Americans struggle to pay for food and housing, and face the loss of eviction protections that expire at the end of March 2021. The Senate bill directs $1,400 payments to individuals earning up to $75,000, but cuts off eligibility for single people earning more than $80,000. For couples who file a joint federal income tax return, the phase-out begins at those making $150,000 and ends at $160,000.
  • The coronavirus relief package also includes $248 billion for the Small Business Administration, the agency overseeing the Paycheck Protection Program. The Bipartisan Emergency COVID Relief Act of 2020 would make small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 eligible for a second round of PPP funding. Business expenses paid for with PPP funding would be tax deductible, according to a summary of the proposal.
  • Legislation has been introduced in the US Congress that is intended to boost domestic production of personal protective equipment. The US Made Act of 2020 would provide eligible US manufacturers with a 30% tax credit against equipment costs associated with PPE manufacturing. Items that would be declared national priorities by the legislation include bedding, privacy curtains, and surgical and isolation gowns.
  • Scientists are developing antiviral fabrics that target the coronavirus through a variety of approaches. Intelligent Fabric Technologies North America, a Canadian biotech company, has developed a chemical that can be coated onto fabric. The chemical enters the outer shell of the novel coronavirus, disrupting its ability to replicate. Swiss textile company HeiQ has also developed a fabric coating, ViroFormula, which may deactivate and block the replication of coronaviruses. University researchers are working on materials meant to kill the virus through low-level electric fields and UV light. Industry experts say that it’s unclear how much these fabrics, even if they do kill the novel coronavirus, will actually reduce wearers’ risk of contracting COVID-19. They note, however that the strong demand potential has caused product developers to partner with popular apparel brands like North Face, which plan to apply the treatments to their products.
  • The global fabrics market is expected to grow at a CAGR of 7% from 2021 and reach $218.8 billion in 2023. The Asia-Pacific region accounted for 53% of the global market in 2019. Western Europe was the second largest region, accounting for 13% of the global fabrics market.

April 21, 2021

  • A Center for Effective Philanthropy survey of nearly 240 foundations, of whom 170 signed a pledge to reduce restrictions on their giving during the pandemic, found that 92% of respondents had loosened or eliminated restrictions on current contributions, 80% were making new donations as unrestricted as possible and 90% were reducing what they ask of grantees, like reporting requirements.
  • The American Rescue Plan Act signed into law in March includes $50 million for family planning services. The funding is intended for non-profits and/or public entities, including for “services for adolescents.”
  • The president of the Planned Parenthood Action Fund called the $900 billion coronavirus relief package passed by the US Congress in December 2020 "a step in the right direction, but it's still severely inadequate and long overdue." Alexis McGill Johnson said that the legislation includes largely flat funding for both domestic ($286.4 million for Title X) and international family planning programs ($575 million) and for the United Nations Population Fund ($32.5 million) but fails to include critical language to permanently repeal the harmful global gag rule, or language from the House Labor-HHS-Education bill to block the Title X domestic gag rule.
  • A rule finalized in late January by the Office of the Comptroller of the Currency (OCC) would prohibit the largest US banks from refusing to lend to entire business sectors. The proposal follows years of complaints by Republican lawmakers about what they say are increasingly partisan and discriminatory lending practices by big banks that are under pressure from investors and staff to curb lending to industries including family planning services, fossil-fuel companies, private prisons, and firearms makers. The rule applies to banks that may exert significant pricing power or influence over sectors of the national economy.
  • A spike in birth control requests may reduce the size of an expected coronavirus baby boom. Digital health clinic Nurx, which serves more than 250,000 patients, said that it's seen a 50% increase in patient requests for birth control and a 40% increase in emergency contraception requests. Industry experts say that health-related uncertainties brought on by the coronavirus pandemic may be causing people to refrain from having a child. A study published by the Centers for Disease Control and Prevention found that pregnant women may be at increased risk for severe illness from COVID-19 compared with non-pregnant women.
  • All fifty states and DC are expanding telehealth access to family planning services for Medicaid beneficiaries. North Carolina is allowing both traditional Medicaid beneficiaries and beneficiaries of its family planning Medicaid program to receive select family planning services via telehealth. State officials have also expanded Medicaid-covered telehealth service delivery to include perinatal care, maternal support services, and postpartum depression screening. Alaska has begun allowing direct entry midwives to provide some services using telehealth. Many state Medicaid programs are waiving potential penalties for HIPAA violations for the duration of the emergency.

April 15, 2021

  • Coronavirus has disrupted the agriculture sector by affecting demand for food, food exports, and biofuels. The US food supply chain had to quickly adapt as commercial demand (restaurants and schools) disappeared and consumer demand increased. Quarantines also hurt demand for corn-derived ethanol.
  • US net cash farm income, a demand indicator for farm and garden machinery, is estimated to have risen by $27.3 billion (24.7%) to $137.8 billion in 2020 compared to 2019, according to a February 2021 USDA forecast. Net cash farm income is forecast to decline $7.9 billion (5.8%) to $128.3 billion in 2021. Net cash farm income includes cash receipts from farming as well as farm-related income, such as US government payments. Cash receipts for animals and animal products in 2021 are expected to rise $8.6 billion (5.2%), while crop receipts are projected to increase $11.8 billion (5.8%). Direct government payments are forecast to fall $21 billion to $25.3 billion, a drop of more than 45%. Farm supports are expected to decline in 2021 amid less supplemental and ad hock COVID-19 relief payments compared to 2020.
  • Various US government stimulus programs designed to aid farmers and ranchers – including provisions of the CARES Act and direct aid by the USDA – might help boost investments in farm machinery. Payments under the Coronavirus Food Assistance Program (CFAP) totaled more than $23 billion, according to the USDA. The Paycheck Protection Program (PPP) provided nearly $6 billion, according to the University of Missouri’s Food and Agriculture Policy Research Institute (FAPRI). Farmers also received assistance from Market Facilitation Program (MFP) payments. In late-December, Congress passed the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act which provides $284 billion in additional funding for PPP. The bill also included $13 billion in additional direct agricultural assistance. The American Rescue Plan Act that passed in March 2020 includes more than $10 billion for programs aimed at strengthening US agriculture and the food supply chain, according to analysis by the American Farm Bureau Federation. The bill includes $3.6 billion – or 35% of total agriculture appropriations – for pandemic-related food purchase and distribution. About $4 billion – or nearly 40% of the total - will provide debt forgiveness to socially disadvantaged farmers. The Farmers to Families Food Box Program funded farmers to provide boxes of meats, dairy, and produce to families in need during the pandemic. Citing inefficiencies and high costs, the USDA is winding down the Farmers to Families Food Box program by the end of April 2021. It is being replaced by a new USDA food box program that will provide fresh produce through The Emergency Food Assistance Program (TEFAP) and be distributed to those in need by local foodbanks.
  • Total US farm tractor sales increased 84.1% in March 2021 compared to the same month a year earlier, according to the Association of Equipment Manufacturers (AEM). Tractors with less than 40 horsepower saw the strongest gain with a sales increase of 96.5%. Farm tractors with 100 horsepower or more experienced a rise of 63.5%. Four-wheel-drive tractor sales increased 2.5% Sales of self-propelled combines were up 6.7%. Tractor sales gains were led by smaller units, but the market has been strong across class sizes, according to the AEM. An AEM survey suggests machinery manufacturers are confident sales will remain stable amid strong customer demand. March marked the eleventh straight month of tractor sales growth.
  • Farm and construction equipment manufacturer Deere’s worldwide sales in its production & precision ag segment rose 22% in fiscal Q1 2021 compared to the prior year. Sales in Deere’s small agriculture & turf segment were up 27%. In the US and Canada, Deere projects agricultural machinery sales in fiscal 2021 will be up between 15% to 20%. European demand is expected to rise about 5%. Deere forecasts its fiscal 2021 South American tractor and combine sales will be up about 10%, but revenue in Asia will be down slightly compared to fiscal 2020. Some industry watchers expect Deere’s fortunes to improve as farmers spend their COVID-19-related government payments on new machinery. Higher commodity prices and increased animal feed exports to China have also helped to boost farmers’ buying power.

May 6, 2021

  • Farmers who are flush with cash after a pandemic-driven increase in grain prices are struggling to get new equipment due to a pandemic-driven parts shortage faced by farm equipment manufacturers. Supply chain disruptions have left manufacturers short of the steel, plastics, microchips, and tires needed to make tractors and combines. Suppliers in the US and Europe face a labor crunch because of the coronavirus pandemic. AGCO, one of the world’s largest farm machinery makers, has had to tell customers that they may have to wait as long as six months for their machinery, effectively too late for the US harvest of corn and soybeans.
  • Right-to-repair legislation under consideration in some states would apply to farm machinery, according to the Nextgov news site. Right-to-repair advocates say that the legislation is needed because the pandemic has made it harder to get broken devices fixed. The resulting frustration has given new impetus to at least 39 right-to-repair bills in 25 states. The legislation would loosen restrictions on manufacturers’ information and parts and allow small repair shops and device owners to do their own fixing. Many of the bills are modeled on a Massachusetts law that was approved by voters last November, though that measure applies only to automotive repairs.
  • Some essential industries, including agriculture, have not been impacted by the coronavirus pandemic nearly as much as others, according to the Association of Equipment Manufacturers and economics service provider Oxford Economics. Several key indicators point to healthy growth in the agricultural machinery market in 2021 and 2022. "...farmers are expanding and/or replacing their existing capital. Rather than just spend money on repairing existing equipment, they must be feeling confident enough to start spending on new equipment again,” said Chloe Parkins, senior economist at Oxford Economics. The credit backdrop also remains favorable heading into 2021. The corporate borrowing rate and long-term interest rate are expected to increase slightly this year, but they are still much lower than they were during the 2015-19 timeframe, according to Parkins.
  • Deere & Co, the world’s largest farm equipment maker, forecast a 10% to 15% year-over-year worldwide increase in agriculture and turf equipment sales in 2021. “Higher crop prices and improved fundamentals are leading to renewed optimism in the agricultural sector and improving demand for farm equipment,” said CEO John May.
  • Tractor sales increased 81.4% year over year in March, according to the Association of Equipment Manufacturers (AEM). Self-propelled combine sales increased 6.7%. Sales of tractors rated 40 horsepower (HP) and below increased 96.5% year over year in March. About 73% of all tractors sold in March were 40 HP and below. Sales of tractors rated from 40 to 100 HP increased 58.4% year over year March. Sales of tractors in the 100-plus HP range increased 33.7%.
  • Farm machinery manufacturing employment increased 6.3% year over year in March and was up 17.2% from the pandemic-related low of April, according to the US Census Bureau.

May 6, 2021

  • Pandemic-related supply chain issues that have resulted in rising corn prices and possible corn shortages have some livestock farmers preparing to switch to wheat feed. “We are running out of the corn in the country and wheat got really cheap,” said Joe Nussmeier, a broker at Frontier Futures in Minneapolis. By mid-June, “the only thing to feed critters at that time will be wheat.” Changing the diet of animals comes with some risk: wheat shouldn’t be fed to younger cattle and cows can get bloated if they eat too much of it. Researchers at North Dakota State University recommend that wheat make up no more than 15% of an animal’s diet when it’s being introduced. The color of a bird’s skin can also vary depending on what it eats, with corn-fed chicken looking yellowish, a trait shunned in some countries.
  • The US Department of Agriculture (USDA) allocated an additional $1.1 billion to increase payment rates for more than 410,000 cattle producers under the Coronavirus Food Assistance Program (CFAP) 1 program. The USDA will continue taking applications from swine producers and contract growers for CFAP-AA but would not release payments to pork producers as of late March. The department stated that the payments to pork producers "are likely to require modifications to the regulation as part of the broader evaluation and future assistance." Raw farm product wholesalers are likely to benefit from increased investment in the livestock industry.
  • China bought about 64% of the US agricultural goods agreed to for 2020 in the Phase One trade deal in 2020, according to the Peterson Institute for International Economics. Several experts say that it was unrealistic to expect China to buy the targeted amount of US goods. Meeting that obligation was made even more difficult as the Covid-19 pandemic caused Chinese import demand to plunge. The target rises to $43.5 billion in 2021.
  • China is forecast by the US Department of Agriculture (USDA) to import a record $27 billion worth of farm products in fiscal 2021 (started on October 1) and regain its rank as the top foreign market for American farm products.
  • Wholesale farm product sales increased 44.7% in value year over year in March, according to the US Census Bureau.

April 12, 2021

  • The US Department of Agriculture (USDA) is dedicating at least $6 billion toward new coronavirus aid programs through an initiative called Pandemic Assistance for Producers. Emphasis will be placed on outreach to small and socially disadvantaged producers, specialty crop and organic producers, and timber harvesters. Support will also be provided for other participants in the food supply chain. Existing programs like the Coronavirus Food Assistance Program (CFAP) will fall within the new initiative and, where statutory authority allows, will be refined to better address the needs of producers.
  • Vertical farms are positioning themselves as one of the solutions to pandemic-induced disruptions to the harvesting, shipping, and sale of food, according to Successful Farming. Wholesalers with clients in the sector are likely to benefit. Vertical farms grow crops indoors in stacked layers or on walls of foliage inside of warehouses or shipping containers. They rely on artificial light, temperature control, and growing systems with minimal soil that involve water or mist, instead of the vast tracts of land in traditional agriculture. Proponents, including the US Department of Agriculture, say that vertical farming increases food security at a time of rising inflation and limited global supplies. Traditional North American produce output is concentrated in Mexico and the US Southwest, including California, which is prone to wildfires and other severe weather. The average investment in vertical farming doubled in size in 2020, as large players including BrightFarms and Plenty raised fresh capital, according to AgFunder research head Louisa Burwood-Taylor.
  • The $900 billion federal stimulus package passed in late December 2020 includes $13 billion for agricultural programs, representing approximately 1.4% of total funding amount. The bill provides approximately $11.2 billion of direct financial assistance to commodity producers.
  • The volatility of crop prices has been exacerbated by the coronavirus and changes in demand. Spot prices for corn were as low as $3.08 per bushel on August 3, 2020, and as high as $5.71 on April 12.
  • Farm supplies wholesaler employment increased 2% year over year in February.
  • The global fertilizer market is forecast to grow 4.4% annually through 2025 to reach $3 billion, according to Markets and Markets. The global herbicide market is forecast to grow 6% annually to reach $43 billion by 2024, according to Market Research Future.
  • The prices that wholesalers paid for pesticides, fertilizers and other agricultural chemicals increased 13.6% year over year in March and were up 6.8% from the start of the year. Prices hit a 3-year low in April 2020.

May 6, 2021

  • All 50 states have either opened coronavirus vaccinations to everyone eligible under US Food and Drug Administration emergency use authorizations, or have announced when they plan to do so. For all states currently vaccinating anyone 16 and older, people ages 16 or 17 can only receive a Pfizer/BioNTech vaccine, as it is the only option authorized for use in that population so far. The vaccines made by Moderna and Johnson & Johnson are authorized for use in adults 18 and older.
  • Labor advocates want the federal Occupational Safety and Health Administration (OSHA) to issue an emergency standard that would protect farm workers who are at risk of being exposed to the coronavirus. The advocates, who note that the Biden administration ordered OSHA in January to determine whether there’s a need for an emergency temporary standard protecting workers, say that access to COVID-19 vaccines is a key priority. They also want an emergency standard set for housing and transportation. Many industry experts say that coronavirus safety standards have largely been set at the state and local level.
  • Net farm income, an indicator of demand for farm support services, is expected to have risen 40% year over year in 2020 to nearly $120 billion, the second-highest yearly total of all time, according to the US Department of Agriculture (USDA). Farm cash receipts from crop and livestock sales are expected to have declined 0.9% year over year to $3 billion in 2020, the lowest since 2016. Growth in farm income was being driven by $46.5 billion in federal payments including those provided through farm bill and conservation programs, ad hoc support related to Chinese retaliatory tariffs, natural disasters such as wildfires and hurricanes, and coronavirus pandemic relief funding. Federal support as a percentage of net farm income in 2020 is now projected at 39%. Federal support as a percentage of gross farm income is now projected at a record 10%.
  • China is forecast by the US Department of Agriculture (USDA) to import a record $27 billion worth of farm products in fiscal 2021 (started on October 1) and regain its rank as the top foreign market for American farm products as it continues to recover from the effects of the coronavirus pandemic.

April 26, 2021

  • Many investors are trying to balance their long- and short-term strategies amid COVID-19-related and economic news that is in rapid flux. Three vaccines are now authorized in the US and vaccination rates have steadily ramped up since December. On April 22, the 7-day average for daily new cases was about 66,000 – still high, but more than four times lower than the highs seen in January. Hospitalizations were up but deaths were falling. The rollout of vaccines, a leveling off of COVID-19 cases, jobs growth, and the passage of the $1.9 trillion stimulus package have helped to buoy investor sentiment. On average, economists surveyed by The Wall Street Journal in April believe US inflation-adjusted GDP will rise more than 6% in 2021. However, there are concerns that the economy might grow too quickly and trigger inflation. Such concerns may drive some investors to lean on their financial planners for advice about hedging strategies in case the bullish market turns an about face.
  • The pandemic-fueled market volatility in 2020 attracted a wave of new investors and day trading activity on free stock trading apps such as Robinhood. Some Wall Street watchers felt the rise in rookie day trading and robo-advisor investment tools boded ill for the financial planning and advice industry. However, the rise in retail investing may actually drive demand for active planning and advice services as investors realize they may need help in building wealth long-term, according to Financial Planning. A recent research report by wealth management firm Cerulli Associates showed that 40% of investors surveyed said they needed more advice. More than 55% said they were willing to pay for professional advice, and more than 80% who already had paid advisors said it was worth the cost.
  • As the pandemic boosted demand for investment advice, registered investment advice (RIA) firms are looking for new talent and are often finding it at other independent firms, according to Charles Schwab’s annual compensation report released in February. The report is based on a survey of more than 760 firms and took place between January and April 2020. To attract top talent, RIA’s are having to sweeten their insurance and equity-stake plans as well as their compensation offerings. More than 70% of respondents said they planned to hire new staff in 2020. A key area of focus was effectively onboarding new staff in virtual environments amid the pandemic.
  • For high wealth clients, advisors may set up joint meetings with clients’ attorneys and CPAs to adjust tax planning in light of President Biden’s proposed tax increases on individuals who earn more than $400,000 per year. Some experts suggest investors with a large portion of their net worth in pretax retirement accounts should roll of a portion of their wealth into a Roth IRA. Assuming taxes may rise, a Roth is attractive because taxes are collected on the front end – while taxes are low – and is tax-free when the money is spent in retirement. Advisors may also advise clients who earn more than $1 million to avoid higher capital gains taxes proposed in the Biden plan by selling off some investments.
  • Some advisors are recording podcasts or conducting periodic live meeting sessions via Zoom to stay in touch with clients and keep them informed about COVID-19-related updates, according to Financial Planning. Many financial technology firms are providing free access to online tools for planners and investment advisors that are working remotely. Thanks to webinars and other online resources, many certified financial planners (CFP) have had no problem keeping up with continuing education (CE) requirements during the pandemic, according to Financial Planning. CFPs are required to get 30 CE credits every two years.
  • Despite the pandemic, investors continued to pour money into their investment accounts in the fourth quarter of 2020, according to analysis of retirement savings trends by Fidelity Investments. The average IRA balance was $121,500 in Q4, an 11% increase over the previous quarter and up 8% over the same period in 2019. In Q4 2020, when combined with employer contributions, the total savings rate for Fidelity 401(k) accounts was 13.5%. The average IRA balance rose 9% to $128,100 in Q4 compared to Q3 and was up 11% year-over-year. The rise in retirement investment activity may signal increased demand for financial planning and investment advice.
  • As the pandemic has increased participation in investing, brokerages have enjoyed strong growth as new investors opened accounts. Fidelity Investments saw more than 32 million new workplace participant accounts opened in 2020 and 26 million new retail investment accounts. To help service the influx of new clients, in April Fidelity announced it planned to hire about 4,000 new employees and about a quarter of the new hires will be financial planners. The company plans to complete the round of new hires by mid-2021. The spate of fresh hires planned so far for 2021 follows the 7,200 new associates Fidelity hired in 2020.
  • About half of respondents to a recent survey by Allianz Life said the challenges of making financial ends meet during the pandemic make it difficult to think about retirement saving. However, nearly two-thirds of those participating in Allianz’s 2021 Retirement Risk Readiness Survey said they are paying more attention to their saving and spending habits. More than 55% reported that stock market swings made them nervous about their retirement savings. Among those who are nearing retirement, 37% said they are making a formal investment plan with a financial professional, up from 29% in 2020.
  • About 15% of all stock market investors got their start in 2020 as they sought to leverage stock market volatility amid the pandemic, according to a survey released by Charles Schwab in April. The average age of the new investor is 35, and more than 55% of them believe the stock market will rise in value in 2021. More than 80% are interested in guidance from an investment professional. More than 40% of new investors have not considered the tax efficiency of their portfolio, and more than half reported a lack of understanding about fees.

May 13, 2021

  • At the onset of the COVID-19 pandemic, music, visual art, dance and other fine art schools had to quickly adapt to distance learning technologies to continue operations. Visual arts schools face unique challenges with moving to online learning environments because students may lack supplies, materials, or equipment. Some schools plan to focus on research and learning digital skills for online presentation early in the fall with the hope of more in-person learning later in the school year. Some fine arts students may question the value of a virtual arts education and take time off or switch educational paths as the future of performing is unknown.
  • Some fine arts schools may qualify for relief under the stimulus package that passed in December of 2020. The $900 billion stimulus includes $22.7 billion for colleges and universities. Higher education has been hit hard as the pandemic reduced enrollment. Meanwhile, schools’ have had to bear higher costs related to the pandemic including testing, protective equipment, health support, and financial aid for students.
  • Fine arts programs – including those in public schools – are exploring ways to continue arts education amid the ongoing coronavirus crisis. Music programs that include singing or brass and wind instruments pose unique challenges as singing and forcefully blowing air are thought to be highly efficient methods of spreading coronavirus through airborne droplets. However, researchers at the University of Maryland and the University of Colorado Boulder suggest there are a number of strategies that can mitigate the risk of singing and playing wind instruments in groups, according to The Wall Street Journal. Wearing a mask while singing significantly reduces the number of particles. Particles can also be reduced by placing bags or bell covers over wind and brass instruments. Special masks with slits in them also proved effective at reducing airborne particle emission while playing wind instruments. Singers and wind instrument players should maintain social distancing of at least six feet, nine feet for large instruments such as trombones. Particle build-up can also be reduced by taking 15-minute breaks every 30 minutes where all participants leave the room. Improving ventilation also reduces risk, including opening windows, HVAC systems that bring in fresh outside air three times per hour, or using portable HEPA air cleaners.
  • Some fine art schools have a high percentage of foreign students who left the US when the outbreak began. If foreign students leave, such schools could face revenue shortfalls. Foreign students tend to pay higher tuition than US citizens.
  • The Music Business Association has set up a series of educational webinars, online career development workshops, and regular check-in meetings via Zoom so industry professionals and educators can stay informed about current trends and networking opportunities.
  • Rigorous testing protocols may be a key to allowing fine arts students to rehearse together in smaller groups. University of Iowa (UI) researchers have developed a saliva test for COVID-19 which the university’s arts departments are using to test students prior to scheduling rehearsals. The test can be self-administered and results are returned within a few hours. The test is 95% accurate and is awaiting FDA approval. Some fine art schools may seek to resume some level of in-person instruction as local and state regulations allow. Some schools are embracing hybrid models that supplement less frequent and smaller live classes with online ones. Some dance studios located in mild climate areas, such as Los Angeles, have moved classes outdoors.
  • Dance instructors may use pandemic-related downtime to further their dance educations. The National Dance Education Organization (NDEO), through its Online Professional Development Institute (OPDI), offers online coursework in teaching methods, dance history, and assessments for dance teachers in private dance studio, higher education, and K-12 education settings.
  • Some schools hope to bring back live performances by limiting audience sizes in auditoriums and concert halls. Performances are also being recorded and made available online or performed live via Zoom. While live performances are seen as an integral part of fine arts education, instructors stress that the most important thing for group performers is being able to rehearse together – even if it’s in smaller groups.
  • Hundreds of colleges and universities have announced they will require students to be vaccinated if they plan to return to in-person classes for the fall semester. Most of the colleges that have announced vaccinations requirements - which include Duke, Rutgers, Brown, Cornell, and Notre Dame – are private institutions. However, the public university systems in California and New York will also require in-person students to be vaccinated. Because much of arts education involves performances and the need for in-person instruction, fine arts schools may institute vaccination requirements. Requiring students to have certain vaccinations is not new, and most schools have existing portals for uploading vaccination records. However, laws and regulations regarding vaccination requirements vary by state. Requiring students to be vaccinated may be complicated by the fact that the COVID-19 vaccines were approved by the FDA under emergency use authorizations (EUA). In May, Pfizer put in the request for full FDA approval for the Pfizer-BioNTech vaccine. The same month, Pfizer received FDA EUA for use of its vaccine in children ages 12-15.

May 12, 2021

  • Lumber prices remain at or near record territory as mid-2021 approaches. Lumber closed at $1,601 per thousand board feet on May 10, according to Business Insider. The price had fallen to $496 per thousand board feet on October 26, 2020, from a peak of $941 on September 7.  Reduced mill production coupled with rising demand from DIY projects and ongoing construction projects is contributing to the substantial rise in lumber prices.
  • Spending on home improvements and repairs increased more than 3% year over year in 2020 to nearly $420 billion, according to the Harvard Joint Center for Housing Studies. The increase occurred despite 3.5% shrinkage in the overall economy. Multiple rounds of federal economic relief during the pandemic kept employees on payrolls, which contributed to higher-than-expected income. Lockdowns also meant people were spending less and had more money to put toward things like home improvement.
  • The surge in new-home construction is likely to be concentrated at the outer rims of metropolitan areas and, to a lesser extent, in small towns and nonmetropolitan regions.
  • Total construction spending increased 0.2% month over month on an adjusted basis and 5.9% year over year on an unadjusted basis in March, according to the US Census Bureau. Residential construction spending increased 1.7% month over month and 22.8% year over year in March. Nonresidential construction spending decreased 1.1% month over month and 7% year over year in March.
  • Employment in the specialty trade contracting industry increased 15.5% year over year in April. The large increase is likely due to the effect of the large, pandemic-related employment decrease in April of 2020.
  • The number of building permits issued increased 2.7% month over month and 30.2% year over year in March. Housing starts increased 19.4% month over month and 37% year over year in March. Housing completions increased 16.6% month over month and 23.4% year over year in March.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, increased to 83 in April from 82 in March. The Index was at 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. The outlook for home sales in six months decreased to 81 from 83 in March, but was up from 80 in February, The buyer traffic component of the Index increased to 75 in April from  72 in March.

April 21, 2021

  • Firearms manufacturers are among the beneficiaries of direct payments to US consumers via the coronavirus stimulus package signed into law in March. The most recent round of federal stimulus payments, $1,400 for those with incomes up to $75,000 per year, arrived in bank accounts of many Americans in recent weeks. Gun shop owner Tim Wright said that the payments have led to a direct increase in gun sales at his shop. "It was probably most dramatic on and after March 17," Wright said. "We've had people come in and spend the entire $1,400 right here and say: 'Thanks Uncle Joe (Biden),' as they go out the door."
  • Ammunition shortages are increasing, due partly to the effects of the coronavirus pandemic on input prices. Kaycie Klimisch, an organizer of the Dakota Territory Gun Collectors Association gun show, notes that input costs have increased for ammunition manufacturing firms, some of which also manufacture firearms, largely due to nationwide coronavirus restrictions that have disrupted suppliers’ production cycle. Klimisch notes that ammunition and firearms manufacturers have also been disrupted during the pandemic, especially those in states with much stricter COVID-19 restrictions. The pandemic-related factors, combined with the growing demand related to fears of stricter gun restrictions, creates a perfect recipe for shortages.
  • Raw materials shortages are increasing for many firms, including firearms manufacturers, partly because of pandemic-related congestion in freight transportation networks. A pandemic-driven shift in consumer purchasing habits from experience purchases to consumer goods purchases, particularly of items for the home, led to a dramatic increase in imports from Asian manufacturing centers, according to The Detroit News. The increase in imports resulted in backups at overwhelmed ports and freight hubs across the US. Businesses of all types are now forced to wait months instead of the usual weeks for deliveries, and no one knows when the situation will be resolved. The Fitch Ratings credit ratings agency said in its ‘Fitch Ratings 2021 Outlook: US Transport’ that the coronavirus pandemic will continue to be an impediment, even though performance will improve in 2021.
  • The federal Office of the Comptroller of the Currency (OCC) finalized in late January a rule banning large banks from rejecting businesses based on their industry. The rule makes it illegal for any bank regulated by the OCC with more than $100 billion in assets to reject a customer for reasons other than financial risk. Supporters and critics of the rule both say it is intended to prevent more banks from joining those who’ve stopped serving firearm companies and financing oil and gas drilling projects. Many industry experts say that the rule, which was finalized during the last days of the Trump Administration, is unlikely to survive during the Biden administration.
  • Thousands of people barred from purchasing firearms have tried to buy them since the beginning of the coronavirus pandemic, according to the FBI. Gun-control advocates say that more people can slip through the cracks and buy guns when they’re not supposed to because the spike in background checks has resulted in a significantly increased workload. If a background check cannot be completed within three days, the purchase can go through, so a strained system that causes delays would not be able to effectively enforce the law. The US Department of Justice has asked Congress for more resources so it could confiscate guns from people who never should have been able to buy them in the first place.

April 26, 2021

  • About 42% of adults reported undesired weight gain due to Covid-19, according to a recent survey by the American Psychological Association. The average increase reported was 29 pounds.
  • Both gyms and streaming fitness companies are seeing a surge in new demand and overall workouts. Orangetheory memberships nationwide rose 17% in the first quarter of this year. Growth accelerated during Q1, with the biggest increase (9%) occurring in March, the company said. "We're forecasting that the big boom is September, when we've gotten through the summer, the kids are back to school, there's some normalcy with businesses opening offices again, especially in urban centers like Manhattan and San Francisco," said Crunch Fitness CEO Jim Rowley.
  • The Centers for Disease Control and Prevention said in April that, based on analysis of the latest available data, cleaning once a day is usually enough to minimize the chance of coronavirus transmission in most settings. Fitness centers are likely to benefit if the guidance results in lower pandemic-related cleaning costs. The CDC did identify one appropriate situation for deep cleaning: an indoor environment where a case of COVID-19 had been confirmed within the past 24 hours.
  • About 72% of gyms now offer some type of on-demand or livestream workout, up from the 25% of gyms that offered a comparable service in 2019, according to fitness research firm ClubIntel. Some gyms are offering a hybrid model through which classes can be attended in person or online. Some gyms offer live hybrid classes only, but others offer greater flexibility for those who prefer the remote option by offering prerecorded workouts that customers can follow according to their own schedules.
  • About 60% of Americans don’t plan to return to their gym after the pandemic, according to a TD Ameritrade survey.
  • A survey of 3,500 Americans by The New Consumer and Coefficient Capital found that 76% of people have tried working out at home during the pandemic and 66% of those who did prefer it. Among millennials, the number is even higher: 82% made the switch and 81% of those who did like it more.
  • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
  • Gyms and fitness centers are not considered essential businesses by federal, state, and local governments.

May 12, 2021

  • Nonresidential construction starts increased 13% month over month in March to a seasonally adjusted annual rate of $235.3 billion. Institutional building starts increased 15% during the month fueled by gains in education, recreation, and public buildings. Commercial building starts increased 11% thanks to healthy gains across all commercial sectors. Manufacturing starts decreased 52% in March after strong levels during the previous two months.
  • Some industry experts expect excess office space resulting from the pandemic-driven rise in telecommuting to be converted into housing space. Likely candidates for conversion include aging, deteriorating or functionally and technologically obsolete office buildings; buildings in overbuilt areas or neighborhoods with falling real estate values and rising vacancy rates; and buildings far from public transit. Some buildings could even be adapted for mixed use, with one portion of a building preserved for offices and residential units occupying the remaining portion.
  • The pandemic-driven spike in product deliveries to homes has led to a surge in demand for distribution facilities, according to The Associated General Contractors of America. Demand is greatest for smaller buildings located nearer to residential customers than the traditional warehouse districts on urban fringes. Delivery companies are also adding sorting facilities at hub airports.
  • Industrial facility construction completions will increase 29% year over year in 2021, according to commercial real estate services and investment firm CBRE Group. Big boxes in the 500,000-square-foot range will account for the majority of new product. Demand growth that began in 2020 will continue in intermodal hubs like the Inland Empire, Dallas, Houston, Chicago, and Atlanta markets. Demand for local infill space will also continue, spurred by the likes of Amazon, Walmart, Target, Best Buy and Costco.
  • The Joint Center for Housing Studies of Harvard University projects annual growth in renovation and repair spending of 4.1% by the first quarter of 2021 with gains softening to 1.7% by the third quarter. “The surge in DIY and small project activity is lifting the remodeling market, but it remains to be seen if the strong sales market this summer translates into larger improvements that would drive even stronger growth in the coming quarters,” said Chris Herbert, Managing Director of the Joint Center for Housing Studies.
  • Total construction spending increased 0.2% month over month on an adjusted basis and 5.9% year over year on an unadjusted basis in March, according to the US Census Bureau. Residential construction spending increased 1.7% month over month and 22.8% year over year in March. Nonresidential construction spending decreased 1.1% month over month and 7% year over year in March.
  • Employment in the specialty trade contracting industry increased 15.5% year over year in April. The large increase is likely due to the effect of the large, pandemic-related employment decrease in April of 2020.
  • The number of building permits issued increased 2.7% month over month and 30.2% year over year in March. Housing starts increased 19.4% month over month and 37% year over year in March. Housing completions increased 16.6% month over month and 23.4% year over year in March.
  • The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, increased to 111.3 in March from 110.3 in February, according to the National Association of Realtors. An index of 100 is equal to the level of contract activity in 2001. Contract signings increased 23.3% year over year in March, with the difference due in large part to the pandemic-induced lockdown in March 2020.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, increased to 83 in April from 82 in March. The Index was at 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. The outlook for home sales in six months decreased to 81 from 83 in March, but was up from 80 in February, The buyer traffic component of the Index increased to 75 in April from  72 in March.

April 24, 2021

  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. As of April 4, the SBA had disbursed $746 billion of the $813.5 billion total appropriated for the PPP. Some $60 billion, or 21% of Round Three PPP funding, remains available. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Social distancing, masking, and other measures should remain in place until late July, “and that may be optimistic,” according to Dr. Jeffrey Shaman, an epidemiologist at Columbia University. Vaccines alone are not enough to end the pandemic, according to a new model by created by Dr. Shaman and his associates at Columbia University. Some areas of the country have let the pandemic rage so uncontrollably that it is too late for the vaccine to have a major impact, Dr. Shaman said.
  • Florists have begun placing orders months in advance due to pandemic-related supply chain delays. “During the shutdowns lot of growers were actually going out of business. We couldn’t get the transportation of the flowers here, just because the flights weren’t coming in,” said flower shop co-owner Jennifer Barnard. Bard says that her shop finalized their Valentine's Day orders in mid-December.
  • Social distancing has initiated the development of the “microwedding,” according to Catersource. Different from eloping, microweddings include the elements of a traditional ceremony and reception on a much smaller scale. Guest lists that average about 25 to 30 individuals allow the bride and groom to celebrate for a few thousand dollars, a fraction of the cost of a traditional wedding. Scaled-down weddings still involve flowers, but budgets are considerably smaller.
  • In the absence of big events that account for a sizable percentage of business, a few New York floral designers have innovated and leveraged the DIY movement. New York floral designer Lewis Miller and other firms ship boxes of 50 to 100 loose stems directly from Dutch suppliers to customers and provide access to online videos that show how to arrange them.
  • “Designer’s Choice” arrangements have become the norm, as florists learn to work with whatever is available. COVID-19 has affected the supply chain, leaving florists unable to procure a variety of popular flowers from South America, Africa, and Holland. Many operators are only open for curbside pick-up and delivery.
  • Florists are generally considered nonessential businesses although in some states, the ability to serve funeral homes and cemeteries allowed some to operate during the COVID-19 pandemic, according to an article in the Taunton Gazette.

May 6, 2021

  • Large customers like Walmart and Sysco are fining food distributors for late or incomplete orders, according to The Wall Street Journal. Distributors say that labor shortages, supply constraints, and high freight costs are making it difficult to deliver complete, timely orders. Distributors' large customers had excused such penalties for months during the pandemic when surging demand led to widespread shortages.
  • Many analysts say that food distributors should prepare for an upcoming pandemic-related spending shift that is increasingly referred to as revenge shopping. Consumers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time. The bounce back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues. A significant portion of food sales may shift from grocery stores back to restaurants as a result.
  • Kroger, the largest supermarket chain in the US, said that it expects sales at stores open for at least one year (comparable sales) to decline by 3% to 5% year over year in 2021. Sales increased 14.1% year over year in 2020. Kroger cited the end of consumer stockpiling and the availability of coronavirus vaccines, which makes it possible for consumers to shift back to eating more meals at restaurants and outside of their homes, as a key cause of expected lower sales growth.
  • Other grocers have also forecast year-over-year sales decreases. Discount grocer Grocery Outlet said that comparable sales in the first quarter of 2021 are likely to decline into the high-single digits. Sales rose 12.7% last year. Sales at Sprouts Farmers Market increased 6.9% year over year in 2020, but the chain said that sales growth will decline to low-to-mid-single digits this year. Walmart projects comparable sales to grow by low single-digits in 2021 after 8.6% growth last year.
  • Food distribution industry leader Sysco’s sales were down 23% year over year in the last six months of 2020. Performance Food Group’s sales were down 17% excluding the impact of its acquisition of Reinhart Foodservice. Executives at both firms cite the impact of the coronavirus pandemic on restaurants as a key cause of decreasing sales.
  • The food supply chain is facing another pandemic-induced hurdle in the form of a can shortage. Wholesale manufacturers and distributors are running out of empty cans to pack nonperishable foods that so many consumers are buying in bulk. “Especially in ready-to-eat meals, like chili, soups and prepared meats,” said James Kwon, CEO of technology and logistics firm ePallet. “The cans are in short supply.” Canned items that normally may be unavailable for just a week or two are now delayed for months, according to National Public Radio. Can manufacturers have announced plans to build at least three new factories within the next 18 months. Can maker Ball Corp. will open two new US plants and is adding two new production lines to existing US facilities.
  • The Food and Drug Administration (FDA) has issued a blueprint that the agency said outlines the approach it will take over the next decade to improve food safety. Core sections of the New Era of Smarter Food Safety Blueprint address enhanced traceability, smarter tools and approaches for prevention and outbreak response, new business models, and a culture of food safety. The FDA says that enhanced traceability, coupled with advanced analytical tools, may help the FDA spot potential problems in advance and prevent or lessen the impact of recurring outbreaks of illnesses associated with the consumption of certain foods.
  • Wholesale grocery sales increased 10.3% in value year over year in March, according to the US Census Bureau.
  • Grocery store sales decreased12.3% year over year in March, according to the US Census Bureau.

April 24, 2021

  • About 46% of school systems were offering fully in-person instruction in late April, while 50% are offering hybrid options, according to the American Enterprise Institute’s Return To Learn tracker. Those numbers have shifted upward over time. President Biden said in late February that he wants many elementary and middle schools to reopen full-time by May. Food service contractors serving schools are likely to benefit if the goal can be met. Biden also raised the idea of keeping schools open over the summer.
  • A dedicated relief fund of $28.6 billion was provided in the coronavirus stimulus package signed into law in March. The funding will help small and mid-sized hospitality industry firms including food service contractors in need of assistance with rent and operational expenses. It provides grants of up to $10 million per entity with a maximum of $5 million per location based on the difference between 2020 and 2019 revenue.
  • A University of Chicago study published in January concluded that “22 percent of all full work days will be supplied from home after the pandemic ends, compared with just 5 percent before.” Corporate demand for food service may not rebound to pre-pandemic levels as a result. “The pandemic drove a mass social experiment in which half of all paid hours were provided from home,” according to the study. By most accounts, the authors concluded, that experiment was successful.
  • Adults who contract COVID-19 are twice as likely as the general population to have eaten at a restaurant in the two weeks prior, according to the Centers for Disease Control and Prevention (CDC). Both indoor and outdoor dining pose a risk of infection because patrons cannot eat or drink with a mask on, the CDC noted.
  • College dining services have been forced to overhaul operations to accommodate social distancing and safety and health regulations because of COVID-19. Customized meals have been replaced by grab-and-go, self-serve is disappearing, and condiment and coffee stations replaced by single-serving packets and paper cups. Some colleges have invested in robots for food prep and delivery.
  • K-12 schools have played a key role in providing meals to students who are part of the National School Lunch Program during the COVID-19 pandemic. Many districts continued to feed students by working with food banks and non-profits, reconfiguring meal distribution plans, and offering workers hazard pay when schools shut down. Almost every school program in the country transitioned to curbside pick-up, according to the School Nutrition Association. According to a survey by Hunger Free America, more than one-third of parents reported skipping meals for their children or reducing serving sizes because they lacked the funds to buy food.

April 20, 2020

  • Sales of high-heeled shoes decreased 45% in 2020, according to market research firm NPD Group. Sales are expected to rise modestly in 2021, but more women feel liberated from the tyranny of heels and are likely to continue using more comfortable footwear, according to NPD Group.
  • Footwear manufacturer Caleres, which closed over 100 bricks-and-mortar locations in 2020, noted that its direct-to-consumer (D2C) channels accounted for 75% of its business during the three-month period ending on January 30. “Caleres is a more agile and focused organization than it was at the start of 2020,” CEO Diane Sullivan said.
  • Real disposable income, an indicator of demand for discretionary purchases, decreased 8.2% in February following an 11% increase in January. The January increase, the largest increase in 9 months, was driven in large part by government transfer payments, which rose 52% in January from the prior month, reflecting both stimulus checks and the supplemental $300 weekly jobless benefit payments. Consumer spending decreased 1% in February, following a 2.4% increase in January. Spending and income are expected to rebound in the coming months as more people become vaccinated.
  • President Biden signed the $1.9 trillion American Rescue Plan Act coronavirus relief package into law in March, directing a third round of stimulus checks to most Americans. Footwear manufacturers are likely to benefit if the plan helps boost consumer spending by stabilizing consumer finances. The aid comes as millions of Americans struggle to pay for food and housing, and face the loss of eviction protections that expire at the end of March 2021. The Senate bill directs $1,400 payments to individuals earning up to $75,000, but cuts off eligibility for single people earning more than $80,000. For couples who file a joint federal income tax return, the phase-out begins at those making $150,000 and ends at $160,000.
  • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
  • Fashion and performance footwear will boost dollar sales for the overall industry in 2021, though sales will remain below 2019 levels, according to The NPD Group’s Future of Footwear report. “A return to the office and store re-openings will likely reignite some demand for fashion footwear, although the focus will remain on casual and comfort-oriented styles. The pandemic has only amplified the importance of these attributes, as the blending of work-from-home and remote learning has led consumers to favor comfort to wear any time of the day,” said Beth Goldstein, NPD’s fashion footwear and accessories analyst. Performance footwear growth will be driven by demand for road running shoes.

April 13, 2021

  • The forestry industry hasn’t benefited significantly from lumber price increases. Logging production increased just 0.7% year over year in February but was up nearly 41.4% from the low of April 2020. Industry experts say that sawmills lack the capacity to significantly reduce an existing timber surplus despite record demand and prices for lumber, so trees aren’t being cut and sold.
  • Lobbyists are fighting an Oregon proposal to increase taxes on the industry, saying that economic damage caused by the coronavirus pandemic and loss of significant amounts of acreage to fires in 2020 have created severe problems. Proponents of the tax increase argue that those problems have been offset by record-high lumber prices, but opponents note that the benefits of lumber price increases have gone mostly to large, vertically-integrated firms that own sawmills. Small-scale timber owners who lost most of their timber in last year’s wildfires suffered major financial hits and may have lost valuable equipment, but large corporations and lumber manufacturers are thriving, said Brooks Mendell, president of the forest investment consultancy Forisk. “You can see it’s showing up in their financial statements, and the publicly traded guys and the private guys are doing really well,” Mendell said. “They’re investing in their mills and they’re just doing extremely well.”
  • The $200 million allocated for logging and log hauling businesses in the COVID-19 relief package that was signed into law in late 2020 will go to timber harvesting and hauling businesses that have, because of the COVID–19 pandemic, experienced a loss of 10% or more in gross revenue during the period beginning on January 1, 2020, and ending on December 1, 2020, compared to the same period a year earlier.
  • The forestry sector—landowners, logging companies, and sawmills — lost an estimated $1.1 billion in 2020, according to the Trump administration.
  • Low timber prices are likely to linger for five to seven years, according to Pete Stewart, president and founder of industry consulting firm Farm2Market. Prices are low despite recent record-high lumber prices because of the vast oversupply of timber, said Stewart.
  • Logging companies are seeing strong demand from some customers and weak demand from others, due to COVID-19. Customers that make sanitary paper products (toilet paper, paper towels, wipes) are driving sales of wood chips which are used to make pulp, a raw material of paper products. Conversely, demand from commercial paper manufacturers for pulp is lower.
  • Employment in the logging industry decreased 5.4% year over year in February. The logging segment has an aging workforce and chronic labor shortages. Loss of labor due to coronavirus illness and quarantines is hurting the industry.

April 20, 2021

  • President Biden signed the Paycheck Protection Program Extension Act into law on March 31, pushing application expiration date of the Paycheck Protection Program (PPP) back to May 31 and giving the Small Business Administration (SBA) the authority to continue processing pending applications for another 30 days after that. As of April 4, the SBA had disbursed $746 billion of the $813.5 billion total appropriated for the PPP. Some $60 billion, or 21% of Round Three PPP funding, remains available. Small businesses with up to 300 employees and that have sustained a 30% revenue loss in any quarter of 2020 are eligible for a second round of PPP funding. Business expenses paid for with PPP funding are tax deductible.
  • Federal Reserve officials expect gross domestic product (GDP) to increase 6.5% year over year in 2021. Growth will be driven by massive federal fiscal stimulus and optimism around the success of coronavirus vaccines. "Strong data are ahead of us," Federal Reserve Chair Jerome Powell said in mid-March. The Federal Reserve expects economic growth to remain above trend for at least two years to come, at 3.3% in 2022 and 2.2% in 2023, compared to estimated long-term potential growth of just 1.8%.
  • President Biden signed the $1.9 trillion American Rescue Plan Act coronavirus relief package into law in March, directing a third round of stimulus checks to most Americans. Forging and stamping companies are likely to benefit if the plan helps boost consumer spending by stabilizing consumer finances. The aid comes as millions of Americans struggle to pay for food and housing and face the loss of eviction protections that expire at the end of March 2021. The Senate bill directs $1,400 payments to individuals earning up to $75,000, but cuts off eligibility for single people earning more than $80,000. For couples who file a joint federal income tax return, the phase-out begins at those making $150,000 and ends at $160,000.
  • Several industry analysts expect new auto sales to increase about 6.9% in 2021. The National Automobile Dealers Association expects 2021 sales of 15.5 million. Forecasters at car-shopping web site Edmunds also predicted 2021 sales of 15.5 million. Charlie Chesbrough, senior economist for Cox Automotive, said that Cox expects 2021 sales of 15.7 million. US auto sales in 2020 were 14.5 million, down 15% from 2019. It was the fourth-largest annual decline since at least 1980.
  • New orders for durable goods increased 0.6% year over year in February, according to the US Census Bureau. Excluding transportation, new orders increased 2.2%. Excluding defense, new orders increased 1.5%. New orders decreased 0.8% month over month in February, ending nine consecutive month-over-month increases.
  • Employment in the forging and stamping industry decreased 7.6% year over year in February but was up 4.3% from the low of April 2020, according to the US Department of Labor.
  • The University of Michigan’s consumer sentiment index, a measure of consumer confidence, increased to 83 in March from 76.8 in February.  It was the highest reading since the coronavirus pandemic hit the US. The index of current economic conditions rose to 91.5 in early March from 86.2 in the prior month. The index of longer-run expectations rose to 77.5 from 70.7 in February. The index remains about 16 points below its pre-pandemic level.

May 12, 2021

  • Lumber prices remain at or near record territory as mid-2021 approaches. Lumber closed at $1,601 per thousand board feet on May 10, according to Business Insider. The price had fallen to $496 per thousand board feet on October 26, 2020, from a peak of $941 on September 7.  Reduced mill production coupled with rising demand from DIY projects and ongoing construction projects is contributing to the substantial rise in lumber prices.
  • Framing contractors may benefit from increasing demand for what is often referred to as "other healthcare” facilities. The ongoing shift to diagnosis and treatment outside of hospital settings is likely to continue even if there are not more surges in COVID-related hospitalizations, according to The Associated General Contractors of America. The need for long-term care in facilities other than nursing homes will grow as well. The steady increase in the number of elderly persons and possibly in individuals with chronic symptoms from COVID-19 will further increase demand for new types of medical institutions.
  • The value of commercial and multifamily construction starts in the US decreased 20% year over year in 2020 to $193.4 billion, according to Dodge Data & Analytics. The value of starts in the top 20 metropolitan areas decreased 23% in 2020, falling to $111.1 billion. The New York metropolitan area continued to be the largest market for commercial and multifamily starts at $23.5 billion but suffered a 25% decline from 2019. The Washington DC metro area managed to maintain its second place standing despite an identical decline in 2020 that cut commercial and multifamily starts to $8.9 billion. The Los Angeles, CA, metro area, which fell 21% to $7.4 billion, ranked third.
  • Attorneys at Atlanta-based law firm Fisher Phillips told contractors that it is within their legal rights to compel workers to get vaccinated against COVID-19. Requiring construction workers to get a coronavirus vaccination is comparable to existing rules for healthcare workers that make flu shots mandatory in order to protect all patients and staff and keep the workplace safe, the attorneys said. The attorneys also recommended that contractors set up programs to administer vaccines on jobsites, during work hours, and free of charge, in order to get the highest participation possible while ensuring projects continue to move forward.
  • Total construction spending increased 0.2% month over month on an adjusted basis and 5.9% year over year on an unadjusted basis in March, according to the US Census Bureau. Residential construction spending increased 1.7% month over month and 22.8% year over year in March. Nonresidential construction spending decreased 1.1% month over month and 7% year over year in March.
  • Employment in the specialty trade contracting industry increased 15.5% year over year in April. The large increase is likely due to the effect of the large, pandemic-related employment decrease in April of 2020.
  • The number of building permits issued increased 2.7% month over month and 30.2% year over year in March. Housing starts increased 19.4% month over month and 37% year over year in March. Housing completions increased 16.6% month over month and 23.4% year over year in March.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, increased to 83 in April from 82 in March. The Index was at 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. The outlook for home sales in six months decreased to 81 from 83 in March, but was up from 80 in February, The buyer traffic component of the Index increased to 75 in April from  72 in March.

April 29, 2021

  • The pandemic has exposed the vulnerability of far-flung, complicated global supply chains. Some manufacturing industry experts suggest supply chains need to be shorter to be more resilient. Simpler supply chains could reduce global freight demand and shrink the freight forwarding market. More than half of US manufacturing executives surveyed by consulting firm Kearny reported they had increased sourcing from the US as a result of COVID-19-related disruptions. More than 15% said they increased sourcing from nearshore countries including Canada and Mexico. Nearly 50% of manufacturing executives said their companies planned to reduce dependence on single-source countries or locations over the next three years; more than 40% want to reduce dependence on China. However, there are challenges to bringing manufacturing closer to home. About 60% of survey respondents felt the pandemic had eroded the US labor productivity gains made in recent years. Nearly 60% said it’s now more difficult to find the right workers because of furloughs and layoffs brought on by the pandemic.
  • Air freight volumes posted robust growth in February after returning to pre-COVID-19 levels in January 2021, according to an April report by the International Air Transport Association. Worldwide air cargo demand, as measured by cargo tonne-kilometers (CTKs), was up 9% in February compared to the same month in 2020. Volumes also increased 1.5% on a month-over-month basis. Global air cargo capacity, as measured by available cargo tonne-kilometers (ACTKs) was down nearly 15% compared to February 2019 (comparison to February 2020 is problematic as China was in lockdown). Air freight demand is expected to rebound to pre-pandemic levels in 2021, according to an April 2021 estimate by the International Air Transport Association. Global cargo demand is forecast to rise 13.1% in 2021 over 2020 levels. The pandemic pushed global air cargo volumes down 9.1% in 2020 compared to the prior year. Worldwide air freight volumes are projected to reach 63.1 million metric tons in 2021, nearly reaching the peak of 63.5 million metric tons in 2018. However, as passenger flights were drastically reduced due to COVID-19, freight capacity has fallen as about half of global air freight volumes are transported in the bellies of passenger flights.
  • In an economic outlook released in December, The Organization of Economic Co-Operation and Development (OECD) estimates global GDP declined 4.2% in 2020. China, with GDP growth of 1.8%, was the only major economy that saw a gain in GDP in 2020. In its December outlook, the OECD projected worldwide GDP would grow by 4.2% in 2021. In March, the OECD upgraded its 2021 global GDP forecast to 5.6% growth amid rapidly accelerating vaccinations and the $1.9 billion US stimulus package. The OECD also upgraded 2021 US GDP growth from 3.5% to 6.5%. China’s GDP forecast was downgraded slightly to 7.8% compared to the 8% growth that was anticipated in December. India’s 2021 economic outlook increased to 12.6% GDP growth compared to 7.9% in the prior forecast. The OECD noted that countries need to keep up the pace of vaccinations to prevent new coronavirus variants from leading to further outbreaks and economic strain.
  • Transportation and warehousing capacity are tight, according to the April Logistics Manager’s Index (LMI) report. The LMI was 72.2 in March, up eight points from the prior month. A reading above 50 indicates logistics expansion while a reading below 50 suggests a contraction. March’s warehousing utilization index climbed 1.9 points to 72.1, while the warehouse capacity index rose 0.9 points to 43.3. With warehousing demand outstripping supply, prices are rising. The warehousing price index rose 2.5 points in March to 81.5. Those surveyed for March’s LMI were not optimistic about sufficient warehousing capacity coming online in 2021; they also believed warehousing utilization would continue to grow amid tight capacity. With demand outstripping supply, LMI respondents believe warehousing prices will continue to go up. March’s transportation utilization index fell 7.5 points to 66, while the transportation capacity index dropped 7.7 points to 30.4. With transportation demand outstripping supply, prices are rising. The transportation price index rose 2.6 points in March to 90.6. Those surveyed for March’s LMI believe transportation capacity may slip in 2021, they also believed transportation prices would keep going up despite any increase in capacity. Higher vaccination rates and government stimulus are likely to drive consumer spending which would trigger even more tightness in transportation capacity. The LPI is compiled monthly by logistics researchers at five universities and the Council of Supply Chain Management Professionals (CSCMP).
  • After posting robust growth in 2020, major US ports are off to a strong start for 2021. The Port of Long Beach saw cargo volume reach a record high in March, rising more than 62% over March 2020.  The Port of Los Angeles moved more than 957,000 TEUs in March 2021, a 113% rise compared to the same month in 2020. The port of Los Angeles’ volume in the first quarter was up 44% over Q1 2020. Container volumes at the Port of New York and New Jersey rose 7.9% in February 2021 compared to the same month in 2020. High US demand for imported goods coupled with a virulent COVID-19 outbreak among workers created a logjam of goods at the ports of Los Angeles and Long Beach. Vaccinations are expected to slow the spread of COVID-19 on West Coast ports, and by mid-April the congestion at the Port of Long Beach and the Port of LA was showing signs of improvement.
  • The pandemic has caused a major disruption in the global positioning of shipping containers, according to The New York Times. In the early days of the pandemic key medical supplies and protective equipment poured out of Asia to destinations worldwide. Many of those containers became stranded as global trade slowed. When consumer demand roared back, a shortage of containers slowed trade flows and drove shipping prices higher. Shipping carriers are ramping up efforts to move empty containers back to Asia. China manufactures most of the world’s containers and is boosting production. Some industry insiders believe that falling COVID-19 cases and rising vaccinations will lead consumers to spend more on experiences and less on goods, which could help rebalance the global container fleet. Others worry a fresh round of US stimulus could unleash even more consumer goods spending and make the container shortage even worse. The global imbalance of containers could last through the end of 2021.
  • The troubles with oceangoing freight, including a since-cleared blockage of the Suez Canal, have pushed shippers to the air cargo market which is driving up air freight rates as already-tight air capacity gets tighter. In mid-April, air freight rates from China/Hong Kong to North America were up compared to a year ago, according to The Air Freight Index Company (TAC Index). For China to North America, rates hit $8.06 per kilogram the week of April 19, up 58% compared to mid-March. Some industry watchers suggest high air freight rates may squeeze out shippers of lower margin goods. High margin consumer goods – which have seen strong demand amid the pandemic-fueled rise in ecommerce – are better able to absorb higher freight rates.

May 6, 2021

  • A rebalancing of food sales, which shifted heavily to grocery stores and away from hospitality industry businesses like restaurants and bars, may have begun in March. Sales at food services and drinking places increased 35.3% year over year in March while grocery store sales decreased12.3% during the period, according to the US Census Bureau.
  • Kroger, the largest supermarket chain in the US, said that it expects sales at stores open for at least one year (comparable sales) to decline by 3% to 5% year over year in 2021. Sales increased 14.1% year over year in 2020. Kroger cited the end of consumer stockpiling and the availability of coronavirus vaccines, which makes it possible for consumers to shift back to eating more meals at restaurants and outside of their homes, as a key cause of expected lower sales growth.
  • Other grocers have also forecast year-over-year sales decreases. Discount grocer Grocery Outlet said that comparable sales in the first quarter of 2021 are likely to decline into the high-single digits. Sales rose 12.7% last year. Sales at Sprouts Farmers Market increased 6.9% year over year in 2020, but the chain said that sales growth will decline to low-to-mid-single digits this year. Walmart projects comparable sales to grow by low single-digits in 2021 after 8.6% growth last year.
  • The aluminum can shortage, which industry experts say has been driven primarily by the coronavirus pandemic and rising demand for cans by craft brewers, continues to constrain some fruit and vegetable manufacturers. Can manufacturer Ball Corporation anticipates "demand continuing to outstrip supply well into 2023." Multiple new US production facilities are in operation, according to Ball executives, and the company is readying to ramp up production in its Pittston, PA, plant in the second half of 2021.
  • Health experts have determined that the risk of coming in contact with the coronavirus by handing grocery items like packages of fruits and vegetables is extremely small. Information on the website of the Centers for Disease Control and Prevention says that “because of the poor survivability of these coronaviruses on surfaces, there is likely a very low risk of spread from food products or packaging.” The site also notes that no cases of COVID-19 have been linked to people touching food or food packaging and then touching their faces. There is now wide agreement among health experts that the coronavirus is spread primarily through droplets in the air, according to USA Today.
  • Manufacturers and retailers are focusing on making, delivering, and stocking their top-selling items, which can lead to fewer niche or seasonal items. Additionally, other aisles have less stock because the sector cannot make enough. B&G Foods, which produces Green Giant canned and frozen vegetables, said that it is making as much as possible but hasn’t been able to stock up on extras to prepare for another wave of shutdowns. Other manufacturers such as Kimberly-Clark, and General Mills also said that they haven’t been able to rebuild inventories because of the strong demand.
  • Fruit and vegetable manufacturers may need to upgrade cooling systems in cold storage rooms due to concerns that the coronavirus can spread via HVAC systems. Specialists are evaluating how well heavy-duty filters block microbes and considering whether to install systems that use ultraviolet light or electrically charged particles in the ductwork to kill the virus. Many of the methods to reduce pathogens have been around for years, but were geared more to hospitals than commercial buildings.

April 10, 2021

  • Sales of generators, grills, patio heaters, and other propane-fueled appliances increased significantly during the coronavirus pandemic, according to LPGas magazine. “Restaurant patios were a must this past winter season, with most restaurants obtaining additional outdoor heating,” said Mike Dodd, CEO of Propane Ninja, a Florida cylinder exchange provider. “We sell to a great deal of restaurants, and demand has been staggering.” Retail outlets such as convenience stores, hardware stores, and supermarkets have demanded more bottle gas due to residents working from and spending more time at home. Many people have purchased propane-powered appliances for personal use outdoors, says Dodd.
  • President Biden signed the $1.9 trillion American Rescue Plan Act coronavirus relief package into law in early March, directing a third round of stimulus checks to most Americans. Fuel oil and LP gas dealers are likely to benefit if the plan helps stabilize consumer finances. The aid comes as millions of Americans struggle to pay for food and housing, and face the loss of eviction protections that expire at the end of March 2021. The Senate bill directs $1,400 payments to individuals earning up to $75,000, but cuts off eligibility for single people earning more than $80,000. For couples who file a joint federal income tax return, the phase-out begins at those making $150,000 and ends at $160,000.
  • A third round of $1,400 checks would allow nearly 23 million adults to pay their expenses for more than four months without going into more debt or using their savings, according to Morning Consult economist John Leer.
  • “Most propane retailers have done very well in the pandemic, particularly if they have barbecue tank exchange cylinders – the business is just through the roof,” says Steve Abbate, managing director of Cetane Associates, a mergers and acquisitions advisory firm. Retailers whose gallon sales rely on restaurants have faced some financial stress, he added. More than 110,000 eating and drinking places were closed for business temporarily or for good as of December 1, 2020, according to the National Restaurant Association.
  • The rise in recreational vehicle activity has driven demand for propane. Most RV appliances, including cooktops, furnaces, grills, refrigerators, hot water heaters, and generators, run on propane. U-Haul, which entered the propane market when it rented RVs, kept its propane business when it exited the RV rental market. The company continues to serve RVers with propane, according to LP Gas.
  • Heating oil users may see lower bills throughout the winter while households that heat with gas, electricity, and propane are expected to pay more on average for fuel, according to the Energy Information Administration (EIA). EIA expects higher energy consumption due to telecommuting and online education, but home heating oil expenditures are forecast to fall by 10%, due primarily to a combination of low crude oil prices and high distillate fuel oil supplies heading into the winter.
  • Goldman Sachs believes that global crude demand will not be back to pre-pandemic levels until 2022. Demand is expected to have declined 8% in 2020, to decline 6% in 2021, and fully recover in 2022. Propane supply is driven by economics for crude and natural gas production.

April 29, 2021

  • Payments at full-service restaurants increased 15% in Q1 2021 over Q4 of 2020, according to pay-at-the-table technology maker TableSafe. Payments increased to the highest level since the first quarter of 2020.  "... it appears that the full-service restaurant industry may have hit an inflection point in its recovery from the pandemic,”  TableSafe CEO Gordon Gardiner said. “This is very encouraging for the restaurant industry and we expect more progress as the full effect of restaurant re-opening comes into play in Q2.”
  • The coronavirus pandemic has removed some of the oversupply of restaurants, according to Restaurant Business. Chains including Ruby Tuesday and Logan’s Roadhouse have closed locations while large numbers of primarily full-service local restaurants have closed.
  • The environment for full-service restaurants will be “choppy” for the balance of 2021, according to, Josh Benn, global head of consumer, food, restaurant, and corporate at financial consultancy firm Duff & Phelps. “The demand is going to be strong as time passes. Whether it’s in Q3 or Q4, there’s going to be a strong consumer bid in the market to go out to have entertainment. All those things are going to drive a nice recovery.”
  • Gene Lee, CEO of Olive Garden parent Darden Restaurants, said that takeout and delivery are likely to dip back below where it had been pre-pandemic. Full-services restaurants may benefit from an expected “return to normal” as vaccinations increase.
  • A number of full-service chains have adopted features from quick-service restaurants. Golden Corral, Applebee’s, Famous Dave’s and Velvet Taco are at least testing drive-thru lanes, and curbside pickup is now standard at many full-service establishments. Outback Steakhouse, Texas Roadhouse, The Cheesecake Factory, P.F. Chang’s, IHOP and Famous Dave’s now have fast-casual ventures (Aussie Grill, Jaggers, Flower Child, P.F. Chang’s to Go, Flip’d and Urban Barbecue, respectively).

May 13, 2021

  • Unadjusted wholesale furniture sales fell 6.6% in March 2021 compared to February but were up 22% year-over-year. However, year-over-year comparisons for March 2021 may be misleading because of quarantines and shutdowns in the US and Asia in March 2020. Unadjusted furniture and home furnishing store sales increased 20.4% in the first three months of 2021 compared to the same period in 2020; sales were up 22% from February levels. Furniture manufacturing industry employment rose 14% in April 2021 compared to prior-year levels, according to the US Bureau of Labor Statistics.
  • All states are in various phases of reopening, and furniture manufacturing firms and major furniture retailers have begun to reopen. Early in the pandemic, industry insiders noted that furniture retail is a tactile business where consumers have traditionally wanted to “try out” products such as sofas, chairs, and beds for comfort – a practice that was thought to be problematic amid concerns about the potential spread of COVID-19 on surfaces. However, additional guidance regarding COVID-19 issued in early April 2021 by the Centers for Disease Control and Prevention (CDC) suggests the virus primarily spreads through the air. The agency said, “It is possible for people to be infected through contact with contaminated surfaces or objects (fomites), but the risk is generally considered to be low.”
  • US new home sales in March 2021 were up 20.7% compared to February, and rose nearly 67% year-over-year, according to the Census Bureau. However, year-over-year comparisons for March 2021 may be misleading because of quarantines and shutdowns in the US in March 2020. Homebuilder confidence remained strong in April, rising one point to 83, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). While the National Association of Home Builders said housing demand remained strong, affordability is an increasingly concerning issue amid tight inventories and rising construction costs. A healthy housing market is a strong demand driver for furniture sales.
  • During periods of high unemployment, consumers typically postpone large purchases, such as furniture. For the week ending April 24, 2021, nearly 17 million workers were receiving unemployment assistance. The unemployment rate in April largely stayed the same at 6% as the economy added 266,000 jobs, marking a disappointing month as Dow Jones estimates had forecast 1 million new jobs in April and an unemployment rate of 5.8%.
  • Makers and distributors of office furniture may have some short-term opportunities but face long-term challenges. In the near-term, some companies may invest in new furniture with features that make workers feel safer – like desks that are further apart and have clear barriers. Schools may invest in acoustic partitions that can help create a barrier between students. The CDC has recommended partitions when social distancing in schools is difficult. College students remaining in their parents’ homes while taking courses online boosted sales of futons, according to Furniture Today. Longer term, companies may look to save money on furniture and office space by letting employees work from home.
  • Americans who transitioned to working remotely have tended to spend out-of-pocket to set up comfortable and functional work spaces at home, according to a recent survey of full-time remote employees by discount coupon code company CouponFollow. On average, respondents spent $572 in setting up work spaces in their homes. Among items purchased that are in the moderate-cost range, some of the most popular included sitting desks, office chairs, and stand-up desks. The survey data tended to suggest that people were willing to spend to make their work-from-home spaces comfortable even amid tightening household budgets and economic uncertainty.
  • Stay-at-home orders, working from home, and retail closures created a boom in online furniture sales. Online home furnishings retailer Wayfair reported a 49% increase in sales in the first quarter of 2021 compared to the same period in 2020. The company said it expects consumers in the US and Europe to continue to focus on their homes even as life in these regions starts normalizing.  Wayfair’s full-year 2020 revenue was up 55% to $14.1 billion. Industry watchers expect the shift to ecommerce to remain even after the pandemic passes. Furniture wholesalers may seek to establish relationships with customers outside traditional brick and mortar furniture retail.
  • In the first quarter of 2021, US remodelers’ confidence was up strongly compared to the same time a year earlier, according to the National Association of Home Builders’ (NAHB) April 2021 Remodeling Market Index (RMI) report. The RMI in Q1 2021 reached 86, up 36 points from the same time in 2020. Remodeling activity is a key driver of consumer demand for furniture and home furnishings. The NAHB expects US remodeling activity to remain strong through 2021 as the pandemic eases and the economy gains strength.

May 11, 2021

  • Pandemic-related demand increases and supply chain disruptions continue to create backlogs and material shortages. The furniture industry is reporting delays of four months or longer at many points in the supply chain, and according to the Commerce Department. Furniture sales in March 2021 significantly outpaced the prior year, rising 46.8% to a total of totaling $11.6 billion. Manufacturers cut back production when the pandemic started in March 2020, according to Scott Paul, president of the Alliance for American Manufacturing. They also cut raw material purchases in anticipation of declining consumer demand. Demand for goods did plunge in April but rebounded steadily, fed by households that have held up well during the pandemic. Consumer spending on goods rose nearly 6% in January 2021, according to the US Department of Commerce, even as spending on services was up less than 1%. Manufacturers are now scrambling to restock raw materials in response to unexpectedly high demand. Experts warn, however, that demand could shift back to services in the summer as more Americans get vaccinated. Manufacturing could slow as a result.
  • Workplace furniture manufacturer Formaspace is on pace for 30-40% year-over-year growth in 2021, according to CEO Jeff Turk. Formspace saw growth move away from office furniture to laboratory furniture in 2020, but the company began receiving more office furniture orders in March. Turk attributes that to businesses getting ready to go back to their office spaces, and/or companies trying to entice their workers to come back on some sort of regular basis.
  • Many experts say that telecommuting has been normalized, and furniture manufacturers are likely to benefit as telecommuting plays an integral role in future employee work patterns. About 17% of employees were telecommuting full time before the pandemic, according to Forbes Magazine. That increased to 51% In April 2020, after the nationwide lockdowns forced employees from their offices. If part-time employees are included during the April time frame, the percentage of employees working remotely jumps to 66. Nicholas Bloom, an economics professor at Stanford University, says that while the percentage of telecommuters is likely to drop somewhat immediately after the pandemic, the stigma surrounding from working at home is gone. Bloom noted that a number of corporations are developing work-from-home plans beyond the pandemic.
  • A survey done by Global Workplace Analytics and Iometrics found that only 6% of employees do not want to work from home at all while 76% want to be in the office an average of 2.5 days a week. "Our forecast is that once the dust settles, 25%-30% of the workforce will continue to work from home at least one day a week, with the sweet spot being about 2.5 days," said Kate Lister, president of Global Workplace Analytics.
  • Furniture and home furnishings retail sales increased 49.6% in value year over year on an unadjusted basis in March, according to the US Census Bureau. Sales increased 5.9% month over month on an adjusted basis in March.
  • Household and institutional furniture manufacturing industry employment decreased 7% year over year in March but was up 20.2% from the pandemic-related low of April 2020, according to the US Bureau of Labor Statistics. Office furniture and fixtures manufacturing industry employment decreased 13.9% year over year during March but was up 3.7% compared to the pandemic-related low of April 2020.
  • Total construction spending increased 0.2% month over month on an adjusted basis and 5.9% year over year on an unadjusted basis in March, according to the US Census Bureau. Residential construction spending increased 1.7% month over month and 22.8% year over year in March. Nonresidential construction spending decreased 1.1% month over month and 7% year over year in March.

April 22, 2021

  • Furniture stores may continue to benefit from the increase in telecommuting as the pandemic wanes. About 58% of respondents to a survey by online job search service FlexJobs said that they would "absolutely" look for a new opportunity if they weren’t able to continue working remotely in their current role. Many remote workers have set up a permanent workspace in their homes, whether it’s a dedicated office space (34%) or an "actual" home office (24%), according to FlexJobs. Nine in 10 telecommuters reported spending money on their home office in 2020.
  • Furniture stores are experiencing record shipment delays due to pandemic-related worldwide supply chain disruptions. Material shortages and pandemic safety measures have slowed production in factories. Store owners say that they have to guess at wait times, and the information from their suppliers is often inaccurate. “We like to be up front [with customers], but we can only go by the information that we have," said Rob Rubin, co-owner of New England furniture store chain Bernie & Phyl's. "The lead times, what used to take us 30 days to get is now upwards of five or six months."
  • Retail sales for the furniture and home furnishings industry increased 5.9% in value month over month on an adjusted basis and 49.6% in value year over year on an unadjusted basis in March.
  • Demand for furniture will remain at or near record levels through the end of 2021 since sheltering at home will continue in many areas until the vaccines are given to most who want them, said Robert Klaben, vice president of communications at Morris Furniture Company. Shoppers should plan ahead for their furniture shopping needs, at least 120 days before furniture is needed in the home, he added.
  • The University of Michigan’s consumer sentiment index, a measure of consumer confidence, increased to 83 in March from 76.8 in February. It was the highest reading since the coronavirus pandemic hit the US. Higher consumer confidence may boost demand for furniture. The index of current economic conditions rose to 91.5 in early March from 86.2 in the prior month. The index of longer-run expectations rose to 77.5 from 70.7 in February. The index remains about 16 points below its pre-pandemic level.
  • Some furniture retailers have been able to capitalize on rising consumer demand for refurbished office furniture. Chicago firm Rework has seen noncorporate walk-in and online orders increase to about $100,000 per month from a pre-pandemic monthly average of $3,000, said co-owner Mark Knepper. Business has picked up significantly since August 2020. “It took that long for people’s backs to hurt, and for people to realize they could be sitting in the kitchen for a long time to come,” Knepper said. “That’s when a lot of companies started offering stipends.”
  • Employment in the furniture store industry decreased 6% year over year in February but was up 53.5% compared to the low of April 2020.

May 11, 2021

  • Industry watchers are concerned that resurgent outbreaks in Brazil and India could slow a full global rebound in oil consumption. However, the gradual lifting of restrictions in Europe is expected to drive an uptick in motor vehicle and aircraft fuels. In April 2021, the International Energy Agency (IEA) upwardly revised its 2021 global oil demand forecast to 96.7 million barrels per day (b/d), a rise of 230,000 barrels (b/d) over its prior forecast. The IEA said the global oversupply in oil inventories has eased and economic conditions are improving amid vaccine distribution, especially in the US.
  • The number of oil rigs in operation has fallen drastically since the onset of the pandemic. The US oil and gas rig count as of April 30, 2021 was 440, up 2 from the prior week and 32 higher from a year ago, according to Baker Hughes Rig Count. While the rig count was up year-over-year, producers slashed more than 260 rigs in April 2020 as coronavirus-related lockdowns devastated world oil markets and consumption. However, in late April 2021, rig counts were up 80% compared to the low of 244 seen in August 2020. As oil prices have recovered, drillers are gradually increasing drilling activity. Some energy firms are increasing drilling and completion spending in 2021, although the boost is small as oil companies focus on cash flow, debt reduction, and shareholder returns rather than increasing output, according to Reuters.
  • Exploration and production (E&P) companies slashed capital expenditures in 2020. Together, 2020 writedowns by BP, Royal Dutch Shell, and Exxon totaled $51.4 billion, according to Bloomberg. In 2021, US E&Ps are expected to further reign in spending, reducing capex by about 8% compared to 2020, according to a recent Raymond James survey of mid-to-large E&P firms. Firms outside the US are expected to increase capex by about 6%. Capex strategies could change quickly in the second half of 2021 if oil prices move higher. As the pandemic has worn on, energy firms have been under pressure from investors to curtail expenditures in favor of paying dividends to shareholders. Some industry watchers believe that pressure may diminish as long as oil stays in the neighborhood of $60 per barrel.
  • The pandemic and resulting drop in oil consumption is fueling consolidation in the US shale oil industry, according to the New York Times. In January, Conoco Phillips finalized its acquisition of Texas-based Concho Resources. In October, Chevron completed its purchase of Nobel Energy. Amid higher oil prices and vaccine rollouts, the first quarter of 2021 was marked by more consolidation as larger shale players used their equity to purchase smaller firms that have quality assets and low debt, according to The Wall Street Journal.
  • US natural gas consumption is forecast to fall 0.4% in 2021 due to higher prices reducing the use of natural gas by electric power plants. The ongoing economic recovery is expected to drive an increase in industrial natural gas consumption in 2021. Residential and commercial consumption are also projected to increase.

April 19, 2021

  • About 73% of consumers who typically visited shopped centers before the pandemic intend to return again after they have been vaccinated, according to a global survey by IBM's Institute for Business Value. Retailers should  look to in-store promotions, which ranked as the most compelling reason for consumers to shop in a physical store, especially for Gen X (54%) and those over 55 (52%), according to the survey.
  • Gift store chain Paper Source has filed for Chapter 11 bankruptcy protection. The brand, which operates 158 stores and an e-commerce arm in the US, plans to close at least 11 of its stores. “As with many other retail brands, [Paper Source has] sustained deep damage to their finances and operations as a result of the ongoing COVID-19 pandemic,” said Paper Source CFO Ronald Kruczynski in the chain’s bankruptcy filing.
  • It may take more time than initially expected for the distribution of COVID-19 vaccines to be widespread enough for people to gather without social distancing or enhanced hygiene measures. Gift and souvenir stores may be negatively impacted, as travel may not begin recovering to pre-pandemic levels quickly. Health officials have stressed that even with effective vaccines, many of the same safety protocols will have to remain in place until there is clear herd immunity. There are growing concerns that virus mutations will slow the process. President Biden said in early February that wearing masks "though the next year" can save a significant number of lives. According to some epidemiological estimates, as many as 85% of Americans must become immune to COVID-19 – either by recovering from the disease or by getting vaccinated – to halt the virus’s spread.
  • A coalition of health and technology organizations are working to develop a digital COVID-19 vaccination passport. The Vaccination Credential Initiative, which includes members like Microsoft, Oracle, and healthcare nonprofit Mayo Clinic, is using the work from coalition member Commons Project’s international digital document which verifies that a person has tested negative for COVID-19. Gift and souvenir stores may benefit if travel and business activity increases due in part to widespread use of a passport that confirms vaccinations have been received.

April 19, 2021

  • Many analysts say that glass product manufacturers should prepare for an upcoming pandemic-related spending shift that is increasingly referred to as revenge shopping. Consumers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time. The bounce back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues. A significant portion of  consumer expenditures may shift from household products back to  so-called experience purchases as a result.
  • Multiple-dose glass vials may not be a viable option for future vaccine manufacturing, according to Dr. Ian Muir, chief executive of pharmaceuticals manufacturer Porton Biopharma. There are only a few manufacturers in the world who can make the specialized vials that vaccines are currently delivered in, Muir said. He added that the supply chain for the vials is getting longer as demand for them grows around the world. Additional delivery systems like single use plastic vials or single-use prefilled syringes may be needed because just making enough glass, anywhere in the world, and filling it is going to be a major constraint.
  • Schott AG, the world’s biggest supplier of specialty glass for medical bottles and syringes, said that it doesn't expect a shortage of vials for bottling COVID-19 vaccines. Drug makers had warned of limited supplies in 2020. Schott said at the time that their rush to secure supplies early risked making matters worse. “Customers are ordering only to the extent that they actually build up their own production capacities,” a company spokesperson said in late January. “We seek reassurance that orders are not placed to build early reserves, so that all firms that really need (vials) for filling can be served,” he added.
  • SiO2 Materials Science's Auburn, AL, facility went from manufacturing 10 million vials per year to over 10 million vials per month and their local workforce grew from 100 employees to over 500. Each vial manufactured by SiO2 is multi-dose and can hold anywhere from 8-10 doses of COVID-19 vaccine.
  • The vast majority — 70% to 90% — of medical glass is made overseas, according to Chandra Brown, CEO of digital manufacturing institute MxD.
  • Industry experts say that the pharmaceutical industry has settled on 10-milliliter vials, capable of holding eight to 15 doses, as the most common standard for a coronavirus vaccine. A key reason for multi-dose vials is to conserve glass supply. Single-dose vials and single-dose, pre-filled syringes have become commonplace for many vaccines, although multi-dose vials are available as well, according to the CDC.
  • Glass manufacturing has continued largely unimpeded during the coronavirus pandemic, according to Nicole Harris, president of the National Glass Association (NGA). Glass operations were declared essential and run continuously, largely because the large glass-making furnaces are extremely difficult and expensive to shut down and restart. Raw materials used to make glass run 24/7 through ovens that can be as long as three football fields. Demand for glass is currently being driven mainly by hospitals, medical centers, testing laboratories, and manufacturers of medical supplies and equipment.

May 12, 2021

  • Nonresidential construction starts increased 13% month over month in March to a seasonally adjusted annual rate of $235.3 billion. Institutional building starts increased 15% during the month fueled by gains in education, recreation, and public buildings. Commercial building starts increased 11% thanks to healthy gains across all commercial sectors. Manufacturing starts decreased 52% in March after strong levels during the previous two months.
  • The number of hotel projects completed, a driver of demand for glass installation, will increase 11.5% year over year in 2021 and 11% year over year in 2022, according to Lodging Econometrics.
  • Nonresidential construction is expected to decrease 5.7% year over year in 2021, according to a consensus forecast from the American Institute of Architects. Health care and public safety are the only two major sectors in the AIA Consensus Construction Forecast projected to see slight increases — up 1.2% and 1%, respectively— in 2021. Overall nonresidential construction spending is projected to increase 3.1% year over year in 2022.
  • Pandemic-induced material shortages will continue into 2021, according to the Q4 2020 US Chamber of Commerce Commercial Construction Index. About 83% of construction contractors surveyed by the Chamber of commerce are experiencing product delays and 71% are struggling to meet schedule requirements. Some 58% are putting in higher bids on projects and 39% are turning down work opportunities.
  • Glass and glazing contractors may benefit as COVID-19 outbreaks on college campuses help boost interest in trade schools. A Siegemedia survey of 1,500 Americans shows that about 30% of respondents view trade schools as a more favorable option than going to college. Only 9% viewed vocational schools as a worse option, while 58% found the two to be about equal. A similar survey conducted in 2019 found that only 25% of young Americans thought that trade school offers a better future than college. Other benefits cited by those now favoring trade school were less debt (cited by 35%) and better chances at finding a job (30%). About 16% of respondents said they felt trade schools lead to better paying jobs than those facilitated by college.
  • Employment in the specialty trade contracting industry increased 15.5% year over year in April. The large increase is likely due to the effect of the large, pandemic-related employment decrease in April of 2020.
  • Total construction spending increased 0.2% month over month on an adjusted basis and 5.9% year over year on an unadjusted basis in March, according to the US Census Bureau. Residential construction spending increased 1.7% month over month and 22.8% year over year in March. Nonresidential construction spending decreased 1.1% month over month and 7% year over year in March.
  • The number of building permits issued increased 2.7% month over month and 30.2% year over year in March. Housing starts increased 19.4% month over month and 37% year over year in March. Housing completions increased 16.6% month over month and 23.4% year over year in March.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, increased to 83 in April from 82 in March. The Index was at 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. The outlook for home sales in six months decreased to 81 from 83 in March, but was up from 80 in February, The buyer traffic component of the Index increased to 75 in April from  72 in March.
  • Pella and Infinity from Marvin offered virtual appointments to remain connected to customers during the COVID-19 pandemic. Both companies reported an increase in demand for virtual appointments.

April 26, 2021

  • The pandemic-induced respite from competition with other recreational activities that golf courses are receiving may continue for some time despite increasing availability of COVID-19 vaccines. The rate of daily COVID-19 vaccinations administered in the US fell below 3 million on April 22, according to the Centers for Disease Control and Prevention. It was the first time in weeks that the rate was below 3 million, and the decline occurred despite the fact that every American adult is now eligible for the shots.
  • About 40% of the US population had received one or more vaccine shots by late April, and more than a quarter is fully vaccinated.
  • Total rounds of golf played increased 13.9% year over year in 2020, according to Golf Datatech. The percentage increase was the highest since Golf Datatech started tracking rounds played in 1998. The only time the industry saw a bigger spike in rounds played was in 1997, the breakout year for Tiger Woods, according to the National Golf Federation.
  • Increases in rounds played varied greatly by region in 2020. The area defined as West North Central by Golf Datatech – Missouri, Kansas, Nebraska, Iowa, Minnesota, South Dakota and North Dakota – saw a 23.1% year-over-year increase in rounds played in 2020. That compares to only a 4.8% annual rise – the smallest of any region in the US – in the Pacific Region of California, Oregon and Washington. Resorts that depend heavily on travel – especially those to which players typically fly – have not seen a strong rebound as travel overall has diminished during the pandemic.

May 13, 2021

  • The CARES Act provision that reimburses federal contractors who extend coronavirus-related paid leave to their employees and subcontractors was set to expire on September 30, 2020. The provision – Section 3610 – funds contractor employees’ paid leave when COVID-19 has prevented access to government worksites and workers’ jobs could not be performed remotely. President Trump signed a continuing resolution September 30 that continued to fund the government – including Section 3610 - through December 11, 2020. Section 3610 was again extended as part of the $900 billion stimulus bill passed in December 2020. The extension runs to March 31,2021. President Biden’s signing of the American Rescue Plan Act on March 11, 2021 further extended Section 3610 to September 30, 2021.
  • Legal experts suggest the large sums of COVID-19-related money flowing to contractors from the Small Business Administration will further the trend of tighter DOJ enforcement under the False Claims Act. Contractors are urged to make certain of eligibility when applying for contracts and when subcontracting or providing contract support for partner companies.
  • In the early days of the pandemic, the US government scrambled to get enough emergency supplies where they were most needed, and contract awards were expedited. Under the CARES Act, government contractors also qualified for loans through the Small Business Administration (SBA) by the Paycheck Protection Program (PPP). Some legal experts – including federal auditors - worried the haste in awarding contracts and relief aid may have created a potential for fraudulent “double dipping.” Some federal contractors repaid their loans over the summer of 2020, with interest, to avoid any regulatory or oversight complications, according to the Wall Street Journal. In March 2021, the Government Accountability Office (GOA) placed PPP on its High-Risk List due to concerns about program integrity. That same month, the GOA requested the SBA implement a strategy for PPP fraud risk assessments. The GOA continues to review the SBA’s PPP loan forgiveness and review processes.
  • A third round of PPP funding was part of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act that was built into a larger fiscal 2021 spending package passed in December. The second round of PPP extended the lending program aimed at helping small businesses retain their workers. The funding included $284 billion for additional PPP loans (that can be forgiven) which are administered by the Small Business Administration (SBA). Amid concerns that the first rounds of PPP loans were inequitably awarded, the second round prioritized funding for loans by community lenders serving underserved borrowers, including businesses led by women, minorities, and veterans. In March 2021, President Biden signed the American Rescue Plan Act which included an additional $7.25 billion in PPP funding, and kept the application window open until the end of May 2021. Government contractors are eligible for PPP loans, but the Office of Management and Budget notes that contractors must provide the government with credits or reductions in billing for costs paid with PPP dollars, especially if the contractor hopes to have their loan forgiven. The PPP ran out on money on May 11 and stopped accepting most new applications, according to The New York Times.
  • The US response to the COVID-19 pandemic drove a large jump in spending on government contracts. Civilian agency contract spending for fiscal 2020, which ended on September 30, rose 17% from the prior year to reach $228 billion. The rise in spending was about two or three times the amount of the usual annual increase in spending, according to Bloomberg Government. About 44% of the increase was due to Department of Health and Human Services (HHS) spending for COVID-19-related vaccine development, biomedical research, and personal protection equipment and ventilator purchases. In addition to spending tied to the $900 billion stimulus bill passed at the end of 2020, spending increased further under the $1.9 trillion American Rescue Plan Act passed in March. The plan allocates $123 billion for COVID-19-related policy spending, including testing and contact tracing ($50 billion), disaster relief funds ($47 billion), vaccine distribution ($16 billion), and purchase and distribution of medical supplies under the Defense Production Act ($10 billion).
  • In late January, President Biden signed an executive order aimed at protecting workers and on-site government contractors in government agency offices during the pandemic. The order created the Safer Federal Workforce Task Force which, in cooperation with the Office of Management and Budget (OMB), has issued initial guidance for heads of government agencies to implement COVID-19 workplace safety plans. Some key requirements include maximizing remote work for federal workers and contractors, a 25% capacity cap on federal office spaces, and a mandate that masks must be worn at all times in federal offices.
  • US government contractors could be required to certify or represent that their employees have received COVID-19 vaccinations, according to JD Supra. Including social policy clauses in government contracts is common and dates to the 1960s. The National Emergency created by the pandemic could be an impetus for vaccination requirements and there currently is enough vaccine available to support such a move. Some legal experts suggest private employers can legally require employees be vaccinated as a condition of continued employment, but the law on the matter is still in flux, according to JD Supra. However, any requirement for contractor vaccinations may face some pushback and would have to include exemptions under Equal Employment Opportunity Commission guidance regarding disabilities, religious practices, and state law conflicts. According to a Brookings Institute estimate released in October 2020, there are about 5 million federal contractors that are essential to the functioning of the US government.

April 20, 2021

  • Year-over-year retail sales comparisons of Mastercard Spending Pulse data show a reversal of early pandemic spending patterns, according to Digital Journal. Discretionary sectors like apparel experienced a sales decrease in March 2020, when people first started social distancing. Essential sectors, such as grocery, faced the opposite situation as sales surged in March 2020 due to consumer stockpiling. Apparel sales increased 60.6% year-over-year in March 2021, while grocery sales decreased 20.4% during the period. Grain and oilseed milling firms may be negatively impacted by declining grocery sales.
  • Flour supplier King Arthur Baking expects demand to remain elevated when the coronavirus pandemic wanes. “Many months ago, we were seeing three times the volume that we would typically see,” King Arthur Baking Company’s co-CEO Karen Colberg said. While things have slowed a bit from the height of the pandemic Colberg noted that “we are still seeing baking at levels of about 25% to 30% over the prior year.”
  • Total wheat flour production by US flour mills increased 0.7% year over year in 2020 according to the US Department of Agriculture. It was the third largest yearly total on record. Whole wheat flour production decreased 10% year over year in 2020. Whole wheat flour production has now fallen three consecutive years and four of the last five. The trend is at odds with the advice of the Dietary Guidelines for Americans, which suggests at least 50% of grains intake should be in the form of whole grains. The share of total flour production accounted for by whole wheat flour in 2020 was 4.7%, down from 5.3% in 2019 and 5.2% in 2018.
  • The $900 billion coronavirus relief package signed into law in late December 2020 explicitly states that small businesses which received Paycheck Protection Program (PPP) loans and used those funds to incur otherwise deductible eligible expenses can deduct the expenses even if they reasonably expect to receive forgiveness of the PPP loan. The relief package deductibility rule is a reversal of the Internal Revenue Service (IRS) position that taxpayers cannot claim such a deduction because it would be an impermissible double tax benefit to have income on debt forgiveness not taxed as income, and then to also allow tax deductions for the expenses paid with the forgiven loan money.
  • Global ethanol production may fall to 2013 levels and may not recover until 2022, according to Brian Healy, director of global ethanol market development at the US Grains Council. Production will decline due to demand destruction caused by coronavirus pandemic quarantine measures. “About half of the US industry is offline or under capacity,” Healy said. “There’s some recovery in China and a few states in the US are opening up, but demand for gasoline and ethanol is still falling in major gasoline markets, including the US, the EU, and India.”
  • Flour milling giant Ardent Mills is pushing more broadly into direct sales and making investments to package flour for sale to meet demand created by changing consumer behavior, the company said. The largest US miller of grain into flours has established a dedicated a team of employees to its growing retail flour efforts and has been adding warehousing and packing lines at sites around the country. Adding retail capabilities is both a response to make its flours more easily available during the Covid-19 pandemic and a longer-term growth strategy, company officials said.

April 29, 2021

  • Private foundations have stepped up to help battle the coronavirus by providing millions in funding for outbreak-related research, food insecurity, and other emergency relief needs. Candid, a non-profit that collects data on philanthropies, has identified nearly 46,000 grants totaling more than $23 billion in response to the coronavirus to date.
  • In 2020, more than $20 billion in COVID-19 relief was awarded globally, according to a recent report by Candid and the Center on Disaster Philanthropy (CDP). Corporations accounted for almost nearly 44% of funding in 2020, but community foundations awarded the most grants of any grantmaking type, and made up more than half of the grants awarded. Giving by independent foundations more than doubled, rising to $4.7 billion in the second half of 2020 compared $1.7 billion in the first half. The CDP noted that second-half funding improved for vulnerable populations in the US – such as Black, Indigenous, and People of Color (BIPOC) communities – which have disproportionately suffered from the health and economic effects of the pandemic. The CDP says US BIPOC communities accounted for 35% of all specified funding during the second half of 2020 compared to just 5% in the first half.
  • More than 90% of charitable organizations have been negatively impacted by the pandemic, according to a global survey of charities conducted in early and mid-December by CFA America. Of organizations that have been negatively impacted, nearly 75% reported reductions in contributions. More than 40% saw their costs increase, and nearly 40% experienced staffing disruptions. Almost three-quarters of organizations said they adapted by shifting to the digital realm. About 57% reported having to innovate new fundraising strategies and campaigns. Nearly 55% have developed new products or services to help drive revenue. More than 54% are collaborating or partnering with other nonprofits to coordinate their responses to COVID-19.
  • Foundations are required by law to annually pay out 5% of their endowment. Some have suggested if Congress doubled the payout requirement to 10%, billions of dollars could be raised for charities battling the effects of the pandemic with no expense to taxpayers. A group of five large foundations – including the Ford Foundation and the Catherine T. McArthur Foundation – jointly announced they would increase their payouts above 5% for the next two or three years. Another 775 foundations have pledged to loosen restrictions on how the charities they support use funds to give them more flexibility in response to the pandemic.
  • Amid rising need during the pandemic, several major foundations issued a total of about $3 billion in bonds in the second half of 2020 to help cover their increases in grant making, according to the Chronicle of Philanthropy. Low interest rates have made the issuing of bonds an attractive alternative for some foundations. While the nonprofits they support saw their finances pummeled by the pandemic, grantmaking foundations have generally done well as most of their income is from investments and Wall Street performed well in 2020.
  • Nonprofit organizations are finding their budgets squeezed as demand for services remains but staffing and donations have waned. A fresh round of stimulus relief was passed in December. The $900 billion spending bill included more than $284 billion for first and second forgivable Paycheck Protection Program (PPP) loans, and expanded eligibility for nonprofit organizations. However, the bill did not include aid for state and local governments. Typical nonprofits get four times as much funding from state and local governments as they do from private foundations, according to Nonprofit Quarterly. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act (ARP). The third round of stimulus includes $360 billion in aid to state and local governments. State and local governments are free to spend the funding on nonprofits that serve the greater good of the community. The ARP also includes an additional $7.25 billion for the Paycheck Protection Program (PPP) which provides forgivable loans through the Small Business Administration (SBA) and was created under the CARES Act. The PPP is set to wind down on May 31, but funding could run out before then. As of mid-April, the program had $44 billion in funding left, according to the SBA.
  • Grantmaking organizations are uniquely positioned to aid governments as they battle the coronavirus pandemic, according to the Chronicle of Philanthropy. Through their giving, non-profit organizations can work with governments in three key ways: improving transparency and accountability to weed out corruption, providing resources that enhance data-driven policymaking, and promoting civic engagement through public health advocacy and grassroots organization.
  • Despite the economic turmoil and other hardships brought on by the pandemic, more Americans say they gave to charitable causes in 2020 than those who say they did so in 2019, according to a recent survey by DealAid.com, an ecommerce site that donates a portion of sales to nonprofit organizations. More than 70% of survey respondents said they gave to charity in 2020, compared to 62% who said they gave in 2019. While the percentage of people saying they gave went up for 2020, the average overall amount given fell about 8% to $348. Nearly 72% of those surveyed said they planned to give to charity in 2021 and they plan to increase their giving amount by 14%. Causes related to health were the most popular recipients of charitable giving in 2020.
  • In April 2021, the World Health Organization (WHO) Foundation along with the Bill & Melinda Gates Foundation announced the launching of a global mass fundraising campaign to help Covax, the international effort to distribute COVID-19 vaccines to low-income countries. The “Go Give One” drive aims to raise billions of dollars in small donations with the help of corporations, religious organizations, and world leaders. Covax was initially funded by the WHO, UNICEF, and other global health agencies. The Go Give One campaign will cooperate with healthcare systems and mass vaccination sites to advertise the program. The campaign also aims to work with corporations to help them promote Go Give One to their employees and customers through corporate social media platforms.

May 11, 2021

  • Corporate bankruptcy filings slowed in early April after increasing in March to levels not seen since the worst days of the COVID-19 pandemic. Eighteen companies entered bankruptcy proceedings in the first half of April, well behind the 31 recorded in early March, according to S&P Global Market Intelligence data. As of April 15, 155 companies have announced bankruptcies so far in 2021. That is fewer than the 180 filings at the same time in 2020 and a slower pace than all but three of the prior 11 years — 2014, 2015 and 2018.
  • A larger share of distressed companies upended by the COVID-19 pandemic is using court processes to restructure instead of close, according to S&P Global Market Intelligence. Nearly 62% of corporate bankruptcy filings in 2020 sought reorganizations, the highest rate for any year going back to at least 2010. Companies were less likely to liquidate in 2020, a departure from 2019 and 2018 when corporate liquidations outpaced reorganizations in bankruptcy filings. As of March 30, the share of filings seeking restructuring is larger in 2021 than in 2020.  S&P analysts note that government stimulus and easy access to capital have kept at-risk companies from entering bankruptcy following a jump in filings during the early months of the pandemic in in 2020, but bankruptcies are likely to pick up again later in 2021 as companies confront the aftershocks of the pandemic.
  • Real disposable income, a driver of spending on graphic design services, increased 23% in March following an 8.2% decrease in February and an 11% increase in January. The increase in disposable income in March largely reflected an increase in government transfer payments to individuals, primarily the additional round of direct economic impact payments authorized in The American Rescue Plan Act. The January increase was driven in large part by government transfer payments, which rose 52% from the prior month, reflecting both stimulus checks and the supplemental $300 weekly jobless benefit payments. Real personal consumption expenditures increased 3.6% in March following a 1% decrease in February, following a 2.4% increase in January.
  • Employment at graphic design services increased 1.5% year over year in March and was up 14.5% from the pandemic-related low of May 2020, according to the US Bureau of Labor Statistics.

May 1, 2021

  • Retail sales in the grocery store industry increased 0.4% in value month over month on an adjusted basis but decreased 12.3% in value year over year on an unadjusted basis in March. Total retail sales excluding motor vehicles and parts stores, gas, and repair stations increased 9.4% month over month and 26.9% year over year in March.
  • Grocery store visits decreased 6% during Q1 2021 compared to Q4 of 2020 and 8% compared to Q1 of 2020, according to location-based retail foot traffic specialist Placer.ai.
  • Kroger, the largest supermarket chain in the US, said that it expects sales at stores open for at least one year (comparable sales) to decline by 3% to 5% year over year in 2021. Sales increased 14.1% year over year in 2020. Kroger cited the end of consumer stockpiling and the availability of coronavirus vaccines, which makes it possible for consumers to shift back to eating more meals at restaurants and outside of their homes, as a key cause of expected lower sales growth.
  • Other grocers have also forecast year-over-year sales decreases. Discount grocer Grocery Outlet said that comparable sales in the first quarter of 2021 are likely to decline into the high-single digits. Sales rose 12.7% last year. Sales at Sprouts Farmers Market increased 6.9% year over year in 2020, but the chain said that sales growth will decline to low-to-mid-single digits this year. Walmart projects comparable sales to grow by low single-digits in 2021 after 8.6% growth last year.
  • The response to laws passed in some jurisdictions requiring the provision of hazard pay to frontline essential workers has not been uniform. Trader Joe’s has boosted pandemic pay for its hourly and non-management employees by $2 an hour at stores nationwide. Two grocery industry trade groups – Northwest Grocery Association and the Washington Food Industry Association – filed a lawsuit against the city of Seattle over a new law that mandates $4 an hour pay raises for grocery store workers. Kroger announced it will close two grocery stores, a Ralphs and a Food 4 Less, both in Long Beach, CA, in response to a local ordinance requiring extra pay for certain grocery employees working during the pandemic.
  • Some grocers are paying employees to be vaccinated against COVID-19. The Aldi grocery chain is providing hourly workers with two hours of pay for each of the two necessary vaccine shots. Aldi, which has 2,000 stores in the US, also said it would help employees pay for the shots. Trader Joe’s and Dollar General are also offering financial incentives while the Instacart grocery delivery service is offering grocery deliverers a $25 stipend, according to National Public Radio.
  • Employment at grocery stores increased 4.1% year over year in February.
  • Food prices are expected to rise 2% to 3% in 2021, according to the US Department of Agriculture The expected increase is slightly higher than the 1.9% increase in 2019 but in line with the 20-year historical average of 2.3%.

April 22, 2021

  • On April 21, the 7-day average for new cases was about 64,000 – about the same daily level had remained consistent for a month. Hospitalizations were rising but deaths continued to drop. Some health experts are concerned that the spread of more communicable coronavirus variants combined with vaccine reluctance could lead to fresh outbreaks and prolong the attainment of herd immunity.  As of April 22, there were no statewide restrictions in place for salons and barbershops, according to The New York Times.
  • As of April 21, 213 million doses of vaccine had been administered and 26% of the US population was fully vaccinated. The rising vaccination rate and lifting of restrictions has helped to improve foot traffic in many salons and barber shops, according to The Wall Street Journal.
  • Upon reopening, some salons were confused by conflicting guidelines provided by state governments and state boards of cosmetology. Guidelines for opening may include wearing gloves and masks, only one person allowed in per appointment (including children), temperature checks, limiting services to brief ones like haircuts, spacing work stations six feet apart, sanitizing stations and equipment after each customer, and providing hand sanitizer or alcohol wipes. Blow drying may also be limited or eliminated. Some worry blow dryers could spread droplets that carry coronavirus. Salons and shops may temporarily discontinue high-touch services such as scalp, neck and shoulder massages.
  • Reopening safely increased salon and barber shop costs as they invested in automated trash receptacles, equipment sterilizing equipment, additional soap and hand sanitizer dispensers, and thermometers. Adhering to new distancing guidelines can decrease salon capacity. Time-consuming sanitizing efforts between clients can also reduce the potential volume of business.
  • Salons may need to renegotiate rent/lease terms with landlords. Some salons pay rent based on a percentage of their profit. Some experienced stylists have opted not to return to their pre-pandemic salon workplaces and instead have rented private salon suites to make their customers, and themselves, feel more comfortable.
  • In January, the Professional Beauty Association (PBA) released a study suggesting there’s limited evidence that the salon industry contributes to the spread of COVID-19. In a survey of more than 2,500 salons that have served more than two million clients since reopening, only 0.07% of clients reported testing positive for COVID-19 within 14 days of visiting a salon. The PBA and its members are publicizing the study to help assuage customers’ fears so they return to salons. The industry is hopeful business will rebound more strongly when vaccines are more widely available.
  • In February, salon firm Regis Corporation announced the company lost $32.9 million in its fiscal second quarter 2021. Regis’ second quarter revenue declined 50% as it continued to struggle with the ongoing challenges related to the COVID-19 pandemic. The company’s revenue declined $135.6 million in its fiscal first quarter 2021, and $75 million in its fiscal fourth quarter 2020. Regis’ brands include Cost Cutters, SuperCuts, and MasterCuts. The company is continuing with its strategy of selling off company-owned stores to franchisees.
  • Salons and barbershops that have seen business drop off during the pandemic may seek relief via the reauthorization of the Paycheck Protection Program (PPP). The PPP was revived with the December passage of the $900 billion COVID-19 Economic Stimulus Relief Act. The legislation includes $300 billion in funding for Small Business Administration (SBA) loans. The most recent round of PPP lets eligible borrowers get a second draw loan. It also simplifies loan forgiveness for loans under $150,000 and makes forgiven loans tax deductible. In February, the Biden administration established a two-week period where the SBA will only accept PPP loan applications from small businesses and nonprofits with fewer than 20 employees, which could benefit small, owner-operated salons. The period began on February 24 and allows small businesses to receive 100% forgivable loans. In March 2021, President Biden signed the $1.9 trillion American Rescue Plan Act which included an additional $7.25 billion for PPP. The PPP is set to wind down on May 31, but funding could run out before then. As of mid-April, the program had $44 billion in funding left, according to the SBA.
  • In February, Japanese researchers published a study titled Physics of Fluids that showed talking when workers are standing or leaning over clients (as is common in salons, spas, and some medical services) could increase transmission of viral particles even if both parties are wearing masks. If masks are loose, particles could escape and be pulled downward by gravity, increasing infection risk. Previous research has shown that talking can produce large amounts of viral particles.

April 23, 2021

  • Hardware manufacturers serving the auto industry are likely to be negatively impacted as pandemic-related shortages widen. Auto manufacturing firms, which have been forced to slow or stop the production of some models due to a pandemic-related semiconductor shortage, are now facing a natural rubber shortage caused in part by the coronavirus pandemic. Slow shipping has disrupted the delivery of natural rubber, which is a key material in many auto parts and components. Analysts say that reliance on the just-in-time manufacturing process to reduce costs left automakers with limited flexibility when the pandemic hit.
  • Several industry analysts expect new auto sales to increase about 6.9% in 2021. The National Automobile Dealers Association (NADA) expects 2021 sales of 15.5 million. Forecasters at car-shopping web site Edmunds also predicted 2021 sales of 15.5 million. Charlie Chesbrough, senior economist for Cox Automotive, said that Cox expects 2021 sales of 15.7 million. US auto sales in 2020 were 14.5 million, down 15% from 2019. It was the fourth-largest annual decline since at least 1980. Sales in 2019 were 17.1 million. Patrick Manzi, chief economist for NADA, said 2020 was the first time since 2014 that US auto sales failed to top 17 million.
  • President Biden is expected to push for a “Build Back Better” infrastructure spending plan costing up to $4 trillion. Hardware manufacturers are likely to benefit from spending on roads, bridges, rail lines, electrical vehicle charging stations, the cellular network, and other projects. The legislative effort is expected to be split into two parts, an initial package the deals with traditional transportation projects and a second one that addresses administration priorities like universal prekindergarten, national childcare, and free community college tuition.
  • Experts note, however, that achieving even a fraction of the infrastructure proposal will require Biden to secure new funding streams or expand debt-fueled spending, potentially upend the way infrastructure policy typically works, and ensure hundreds of Democratic lawmakers in a closely divided Congress remain in lockstep, with no room for error.

April 8, 2021

  • About 84% of respondents to an early 2021 Plumbing-Heating-Cooling Contractors—National Association (PHCC) survey rank the continuing impact of COVID-19 on their businesses as having either a “low” or “medium” impact compared to 57% in spring 2020, when PHCC first began tracking trends during the pandemic. The number of respondents ranking the impact as “medium high” to “high” has dropped to 9% from 43% in spring 2020.
  • The plumbing and HVACR contractors who responded to the PHCC survey cite several ongoing challenges, including maintaining a safe and fully operational staff; increased operating costs related to new safety requirements; addressing employee and customer health and safety concerns; customer delays on projects because of economic concerns; disruptions in the supply channel; and a fear of a potential recession.
  • The federal coronavirus relief package passed in March allocates $128 billion for helping K-12 public schools deal with the coronavirus pandemic. Schools will be able to use the funding for a variety of pandemic-related issues, including maintenance, repair, and/or replacement of HVAC and plumbing systems. Distributors are likely to benefit if such expenditures increase.
  • Demand for HVACR equipment is likely to increase as architecture firms get more requests to upgrade HVAC systems in commercial buildings. High-density filtration is a common request from office building owners, as are ion technology and UV lighting in HVAC systems. Landlords are asking for Minimum Efficiency Reporting Values air filters rated between 11 to 13. The higher the number, the greater the ability for filters to capture small particles. Ion technology in HVACR systems use an ion rod that spins in the ductwork. The rod ionizes the molecules in the air and neutralizes viruses and bacteria. Much of the work on HVACR equipment is being done when building leases turn, which happens every 5, 7, or 10 years, depending on the contract.
  • Colleges and K-12 schools will receive $82 billion from the federal stimulus package signed into law in late December 2020 to help cover HVAC repair and replacement work intended to reduce the risk of coronavirus infections so schools can reopen.
  • Guidance issued by The Occupational Safety and Health Administration (OSHA) recommends that employers work with heating, ventilation, and air conditioning (HVAC) professionals to look at ways to improve building ventilation as a way to address the potential hazard of exposure to COVID-19. Specific recommendations include Using HVAC system filters with a Minimum Efficiency Reporting Value (MERV) rating of 13 or higher where feasible and considering the use of portable high-efficiency particulate air (HEPA) fan/filtration systems to increase clean air, especially in higher-risk areas. Distributors are likely to benefit from increased demand for HVAC services.
  • HVAC distributors may benefit from increasing use of heavy-duty filters to block microbes and the installation of systems that use ultraviolet light or electrically charged particles in the ductwork to kill the virus. Many of the methods to reduce pathogens have been around for years, but were geared more to hospitals than commercial buildings. What we’ve learned is that our previous standards of air purification didn’t hold up to the test of the pandemic and those need to evolve accordingly, George Oliver of Johnson Controls said.
  • Carrier Global Corporation, which estimates the total market for indoor air-quality improvements at about $10 billion, has identified $150 million of potential business opportunities for itself. Honeywell International cited a more than $600 million sales pipeline for its “healthy buildings” offerings.
  • The Centers for Disease Control and Prevention acknowledged that the coronavirus can sometimes spread through airborne particles that can "linger in the air for minutes to hours" and among people who are more than 6 feet apart. The CDC cited published reports that demonstrated "limited, uncommon circumstances" in which people with the virus infected others who were more than 6 feet away.

April 16, 2021

  • All 50 states have either opened coronavirus vaccinations to everyone eligible under US Food and Drug Administration emergency use authorizations, or have announced when they plan to do so. Demand for supplements, which has increased during the pandemic as many consumers hoped that they may help ward off COVID-19, may decline as a result. For all states currently vaccinating anyone 16 and older, people ages 16 or 17 can only receive a Pfizer/BioNTech vaccine, as it is the only option authorized for use in that population so far. The vaccines made by Moderna and Johnson & Johnson are authorized for use in adults 18 and older.
  • Nestlé Health Science reported 12.2% sales growth in 2020, driven by strong, pandemic-driven demand for vitamin and wellness supplements, including the Garden of Life, Pure Encapsulations, and Persona brands.
  • Researchers from the Cleveland Clinic who examined the effects of vitamin C and zinc on 214 people who were recovering from COVID-19 found that even at high doses, the supplements didn't help reduce the duration of COVID-19 symptoms. Many Americans rushed to buy supplements when the COVID-19 pandemic first hit the US. Vitamin C sales increased 146% during the first week of March, according to the New York Times. Zinc sales increased 255%.
  • Vitamin D, which is known to boost the immune system by fighting off infection, is being tested to see if it can lessen the severity of coronavirus symptoms and reduce the chance of becoming infected with the illness. Brigham and Women’s Hospital is conducting a nationwide, placebo-controlled study that will include people age 30 and older who have gotten a positive coronavirus test result within the previous five days. The 2,700 participants will take either high-dose vitamin D or a placebo pill for four weeks to see whether taking the supplement reduces the severity of symptoms and risk of hospitalization or death from COVID-19.
  • Health supplement stores may struggle to maintain adequate inventory because product manufacturers are having difficulty acquiring packaging materials. Shortages are occurring due to increasing demand for supplements during the COVID-19 pandemic and to competition for packaging coming from the healthcare industry, according to panelists who participated in a webcast by industry news site Nutritional Outlook. Packaging costs have also increased. "...what we’re seeing is that manufacturers are beyond capacity. It’s going to take some time for these manufacturers to be able to build their capacity. Just to give some perspective, for a common round packer, we’re seeing delays out to February 2021,” said Jeohvan Montoya, director of supply chain management for contract manufacturer Lief Labs.
  • A survey by the Council for Responsible Nutrition revealed that more than two in five (43%) of dietary supplement users changed their supplement routines since the start of the pandemic. Among those who altered their regimens due to COVID-19, 91% reported increasing their supplement intake, which included adding new supplements to their existing routines (46%); taking the same supplements more regularly (25%); or increasing dose(s) (22%).
  • GNC Holdings filed for bankruptcy and accelerated plans to close between 800 and 1,200 of the company’s 7,300 stores. The company had worked with creditors when it was unable to make debt payments after realizing a $200 million loss and a 10.1% drop in 1Q sales due to COVID-19. Approximately 1,100 or 30% of US and Canadian stores were closed due to the virus. GNC furloughed a significant number of store and corporate associates. E-commerce revenue rose 25% versus year-ago, and the company launched curbside pick-up operations to comply with state restrictions.
  • The FTC continues to warn companies about making claims that their products and/or therapies can treat or prevent COVID-19. The agency has received hundreds of reports of consumers purchasing products that lack scientific evidence showing that they have any impact on human health outcomes related to the virus.

May 11, 2021

  • Buoyed by tech gains, commodity plays, healthy earnings, and optimism about the improving economy, hedge funds notched their strongest January-to-April performance in 20 years, according to Hedge Fund Research (HFR). The HFR Fund Weighted Composite Index, a global measure of about 1,400 single-manager hedge funds, was up 8.68% in the first four months of 2021 compared to the same period in 2020. Event driven hedge fund managers saw led the growth trend with gains of 10.17%. Renewed hope for a wider economic reopening and robust corporate earnings sent equity long/short hedge funds up 10% through April. Led by commodity-focused managers, macro funds – which wager on macroeconomic trends – were up 7.12% in the first four months of the year.
  • Some commodity hedge fund managers are bullish on oil for 2021, anticipating that widespread COVID-19 vaccine availability will release pent-up global demand for travel and transport services and send oil prices higher, according to Hedge Week. As oil prices collapsed in the early months of the pandemic, crude production slowed and rig counts fell. Some hedge fund managers suggest that if vaccine roll-outs are successful and travel-related fuel demand rises, oil reserves will be depleted quickly and production will take time to ramp up, sending prices higher. Tougher regulation by the Biden administration may also curtail production and capital expenditures by oil majors, further tightening supplies. The low-interest rate policy of the Fed and its tolerance for above-2% inflation may also stimulate commodity investments as a hedge against higher oil prices, according to Oilprice.com.
  • As the world economy continues to recover, hedge fund and private equity fund insiders suggest private debt will be a fast-growing asset class. In a recent report by Preqin, assets under management in private debt will see a compound annual growth rate of more than 11% over the next five years, growing from $848 billion to more than $1.4 trillion. The growth is expected to be fueled by investors seeking alternative sources of yield, and tighter lending standards among banks. Direct lending funds are well-positioned to help businesses during the recovery because they have a stockpile of $1.5 trillion in cash, according to Preqin estimates. In a recent Preqin survey of private fund managers, more than 60% expect private debt funds to play a bigger role in the debt lending arena.
  • Hedge fund managers are expected to more fully embrace environment, social, and corporate governance (ESG) investment principles in 2021, according to Agecroft Partners. The COVID-19 pandemic shed a bright light on existing social and economic inequities which is expected to drive more consideration of ESG issues. Pension funds, endowment foundations, and sovereign wealth funds account for nearly half of hedge fund industry assets, and they are increasingly demanding EGS principals from investments. Climate change awareness, in the form of renewable energy, is a key area of ESG investment focus. Investors are also demanding greater diversity both among the workforces of the companies they invest in, but also the workforces of fund managers.
  • Hedge funds are “cautiously optimistic” regarding growth prospects for 2021, according to the recent Global Hedge Fund Benchmark Survey by the Alternative Investment Management Association (AIMA) and law firms Simmons & Simmons and Seward & Kissel. More than 70% of hedge fund managers surveyed said they had a positive confidence level. Amid strong hedge fund interest among investors, funds’ inflows are expected to remain positive. As COVID-19 precautions persist, investors are expected to be more comfortable working with hedge fund managers with whom they have past business relationships, which could disadvantage newer funds and managers. The report also suggests hedge fund firms are likely to play an important role in the global COVID-19 economic recovery.
  • Some investors may look to hedge funds as a diversification tool to protect against potential inflation and higher interest rates as global economies recover from the pandemic, according to K2 Advisors, the hedge fund investing arm of Franklin Templeton. Improving vaccine distribution and lower COVID-19 infection rates could significantly boost consumer and corporate spending which could spark inflation, and create a knock-on effect for equities and bonds. Hedge funds may create opportunities for investors by going long on investments that stand to benefit from higher borrowing costs while shorting those markets hurt by them.

April 8, 2021

  • The trucking industry helped sustain states' gas tax revenue during the pandemic, according to the American Trucking Association (ATA). The industry had “pockets of weakness” in 2020, such as tank trucks that haul gasoline, but freight activity in many sectors was strong. Trucks were especially busy hauling groceries and home improvement goods. “Overall, we’ve been buying,” said ATA chief economist Bob Costello. “We may change what we’re eating and where we’re eating, but we’re still eating. It has to do with consumption of retail goods, usually bought online, but it also is going to be related to better construction activity for home building as well as remodeling. That was strong last year.”
  • A surge in new-home construction expected in 2021 by The Associated General Contractors of America is likely to be concentrated at the outer rims of metropolitan areas and, to a lesser extent, in small towns and nonmetropolitan regions. These developments will generate demand for new streets, utilities, schools and other local public buildings, and limited amounts of retail.
  • The $900 billion coronavirus relief package signed into law in late December 2020 includes $10 billion for state highways. Industry experts say that the funding is intended to help offset severe losses in state transportation revenues due to reduced vehicle travel during the pandemic.
  • A National League of Cities survey found that 65% of cities were delaying or canceling transportation-related expenditures and infrastructure projects.
  • Receipts for the Highway Trust Fund decreased just 2.1% year over year during fiscal 2020, which ended on September 30, 2020. Gross gasoline tax receipts were down 2.7%, gross diesel fuel receipts were down 1.7%, and the total receipts from the three trucking excise taxes were down 3.2%. Some industry experts note that gasoline production decreased 11% during fiscal 2020, and they expect a downward revision to gasoline tax receipts in the future. More than 80% of the Fund comes from the gasoline tax.
  • Employment in the highway, street, and bridge construction industry decreased 4% year over year in February.
  • Construction spending on highway and street projects decreased 3.7% year over year in February.
  • Several states have increased gas taxes to make up for sudden shortfalls in revenue. New Jersey raised its gas tax from 30.9 cents to 40.2 cents for gasoline and from 34.9 cents to 44.2 cents for diesel fuel. Other recent increases have included Virginia (5 cents), Nebraska (3.9 cents), California (3.2 cents), South Carolina (2 cents) and Illinois (0.7 cents), and Alabama (2 cents).
  • The American Association of State Highway and Transportation Officials expect pandemic-related state transportation revenue losses to be recovered by 2025.

April 16, 2021

  • About 73% of consumers who typically visited shopping centers before the pandemic intend to return again after they have been vaccinated, according to a global survey by IBM's Institute for Business Value. The biggest categories that will see shifts toward in-person shopping are toys, games and hobbies, at 121%, and apparel, footwear and accessories, at 76%.
  • Brand management company WHP Global said that it has acquired a controlling interest in Tru Kids, the parent company of the Toys R Us, Babies R Us, and Geoffrey the Giraffe brands. WHP Global reportedly plans to open Toys R Us stores ahead of the 2021 holiday shopping season. The two Toys R Us stores that opened in November 2019 as part of an attempted US comeback by the iconic toy chain were closed in January. Corporate executives said of the closings that COVID-19 had put the proverbial "nail in the coffin."
  • Sales at sporting goods, hobby, musical instrument, and book stores increased 23.5% month over month on an adjusted basis and 78.1% year over year on an unadjusted basis in March. Sales increased 37.2% year over year for the first three months of 2021.
  • Financial and investing advice company The Motley Fool says that the pandemic has largely killed the in-store experience for independent bricks-and mortar toy shops. Many don't have enough square footage to allow for normal capacity, so they've been forced to limit customers, and bringing a child into a store is too risky for some parents. Many Americans who have seen their income decline during the pandemic can't afford to pay more for toys and games that may be cheaper online.

April 22, 2021

  • Some analysts expect consumers to embark on bigger, pricier home improvement projects as the pandemic wanes. Consumers spent freely on home improvement projects they could handle themselves, like setting up a new office in the house or repainting a teen’s bedroom so it looks better on a Zoom call, but analysts expect them to gravitate to larger, more involved projects like bathroom remodels. Home Center chain Lowes will cater to pro customers by setting up “Pro Zone” areas with prominent signage. These are stocked with the grab-and-go items pros frequently buy and convenience racks with items such as painkillers, snacks, and energy drinks. Lowe’s has added such sections to 95% of its 1,734 US stores. Lowe’s has also set up dedicated parking spots for these customers, who often need to load bigger items into their vehicles. There are also phone-charging stations and a dedicated checkout area. “Time is money for (pros), and they want to get in and out of the store quickly,” Lowe’s executive vice president of merchandising Bill Boltz said.
  • Lowe's said that fourth-quarter 2020 same-store sales climbed 28.1%, as consumers spent more on home projects during the pandemic. The company warned, however, that spending on DIY projects and home improvement could ease as consumers resume normal activities post-pandemic. Chief Financial Officer Dave Denton laid out three scenarios for a robust, moderate or weak market. In a robust market, the retailer's outlook for 2021 anticipates a 5% to 7% drop in demand for the home improvement sector on a mix adjusted basis. In a moderate and weak market, demand would likely drop respectively by 7% to 9% and 10%.
  • Retail sales for building material, garden equipment, and supplies dealers increased 12.1% in value month over month on an adjusted basis and 32.4% in value year over year on an unadjusted basis in March.
  • Home Depot officials say that sales may be unchanged year over year in 2021 but declined to offer more specific guidance, saying there was still too much uncertainty. Profit margin will continue to be pressured this year by rising transportation costs, Chief Financial Officer Richard McPhail said on a call with analysts. Increased spending on infrastructure and more shoplifting will also weigh on profitability. The cost of sales has been increasing faster than revenue growth due to pandemic-related safety precautions.
  • Sales of previously-owned homes increased 9.1% year over year but decreased 6.6% month over month in February, according to the National Association of Realtors. The median existing-home price for all housing types in January was $313,000, up 15.8% year over year, with all regions posting double-digit price gains. January's national price increase marks 108 straight months of year-over-year gains. Housing inventory remained at a record-low of 1.03 million units at the end of February, down by 29.5% year-over-year – a record decline. Properties typically sold in 20 days, also a record low.
  • Employment in the home center and hardware store industry increased 9.2% year over year in February.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, decreased to 82 in March from 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. Homebuilder sentiment was unchanged in February for single-family sales, with a reading of 90. The outlook for home sales in six months increased to 83 from 80, while the outlook for buyer traffic was unchanged at 72.

May 11, 2021

  • The US Department of Health & Human Services (HHS) has renewed the Public Health Emergency (PHE) declaration for COVID‑19 for another 90 days, beginning on April 21 (the date the PHE was previously scheduled to expire) and extending through July 19, 2021. Key regulatory flexibilities and emergency funding sources that are linked to the PHE include but are not limited to 1135 Waivers; Medicare and Medicaid rules regarding Medicare coverage of telehealth, supervision of medical residents, Medicare and Medicaid diagnostic testing, provider-based hospital departments, and the Medicare Shared Savings Program; flexibilities and funding sources established via the Families First Coronavirus Response Act and the CARES Act; and relaxation of certain federal HIPAA privacy and security rules. Providers should remember that HHS retains the discretion to terminate the PHE at any time.
  • Home healthcare services that took advantage of the Medicare Accelerated and Advanced Payments program may need to start making repayments soon. An accelerated or advance payment is a payment from the Centers for Medicare and Medicaid Services (CMS) intended to provide  necessary funds when there is a disruption in claims submission and/or claims processing. CMS can also offer these payments in circumstances such as national emergencies or natural disasters in order to accelerate cash flow to the impacted health care providers and suppliers. Recipients were originally supposed to start paying back pandemic-related payments in August 2020, but CMS extended the repayment period until one year after the funds were loaned. CMS will withhold 25% of Medicare payments for 11 months or until the amount has been paid back. If the advanced payments have not been received by that point, CMS will withhold 50% of Medicare payments for up to six months and then issue a demand letter for the balance.
  • The home healthcare industry may fare better than its post-acute care counterparts to repay advance payments, according to Sherill Mason, principal at Mason Advisors, which provides strategic planning and operations analysis to healthcare providers. “The sector is significantly healthier financially than their colleagues in the skilled nursing industry, where census has not rebounded,” Mason has said.
  • A coalition dedicated to advancing home-based care was formed in early March. The Moving Health Home coalition says that COVID-19 has accelerated the need for more home-based care advocacy. COVID-19 has proven how a wide range of conditions can — and should — be treated in the home, the group adds. Reimbursement models and the culture around health care should be adjusted to fit that reality. Founding organizations include Amazon Care, Landmark Health, Signify Health, DispatchHealth, Elara Caring, Intermountain Healthcare, Home Instead Senior Care, and Ascension.
  • Home healthcare industry employment increased 4.6% year over year in April, according to the US Bureau of Labor Statistics. Home healthcare services saw a surge in demand in the wake of COVID-19 due to concerns about outpatient visits and rising infections and deaths in nursing homes.
  • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.

April 22, 2021

  • Real disposable income, an indicator of demand for discretionary purchases, decreased 8.2% in February following an 11% increase in January. The January increase, the largest increase in 9 months, was driven in large part by government transfer payments, which rose 52% in January from the prior month, reflecting both stimulus checks and the supplemental $300 weekly jobless benefit payments. Consumer spending decreased 1% in February, following a 2.4% increase in January. Spending and income are expected to rebound in the coming months as more people become vaccinated.
  • Many analysts expect a wave of discretionary expenditures on items like home furnishings when the pandemic wanes. Bloomberg Economics estimates that consumers have amassed about $1.7 trillion in savings since the beginning of the pandemic through January. That’s being bolstered by a new round of stimulus payments. Consumer spending during Q2 and Q3 2021 is likely to be the strongest such period in at least 70 years, according to economists at financial services firm Wells Fargo.
  • Retail sales for the furniture and home furnishings industry increased 5.9% in value month over month on an adjusted basis and 49.6% in value year over year on an unadjusted basis in March.
  • The University of Michigan’s consumer sentiment index, a measure of consumer confidence, increased to 83 in March from 76.8 in February. It was the highest reading since the coronavirus pandemic hit the US. Higher consumer confidence may boost demand for . The index of current economic conditions rose to 91.5 in early March from 86.2 in the prior month. The index of longer-run expectations rose to 77.5 from 70.7 in February. The index remains about 16 points below its pre-pandemic level.
  • Employment in the home furnishings store industry decreased 8.7% year over year in February but was up 98.1% compared to the low of April 2020.

May 11, 2021

  • The US Department of Health and Human Services (HHS) announced recently the availability of nearly $1 billion to strengthen COVID-19 response efforts and increase vaccinations in rural communities. The Health Resources and Services Administration, a part of HHS, will increase the number of vaccines sent to rural communities, expand testing and other COVID-19 prevention services, and work to increase vaccine confidence by empowering trusted local voices with additional funding for outreach efforts in underserved communities.
  • A Department of Health and Human Services survey of hospitals conducted from February 22 through 26 showed that hospitals weren't experiencing the severe supply and personal protective equipment (PPE) shortages that plagued hem at the beginning of the pandemic, but some still lacked dependable and predictable supply chains for PPE.
  • More than 260 hospitals and health systems furloughed workers in 2020 and dozens of others have implemented layoffs, according to Becker's Healthcare. Nine hospitals and health systems have announced layoffs since November, some of which were attributed to financial strain caused by the pandemic. Lower patient volumes, canceled elective procedures, and higher expenses tied to the pandemic have created a cash crunch for hospitals, Becker's said.
  • Employment at hospitals increased 0.6% year over year in April, according to the US Bureau of Labor Statistics.
  • COVID-19 patients in hospitals with less than 50 intensive care unit beds had a more than threefold higher risk of death compared to patients admitted to hospitals with more than 100 ICU beds, according to a study published in JAMA Internal Medicine. The study assessed 2,215 adults with COVID-19 who were admitted to ICUs at 65 hospitals across the US from March 4 to April 4, 2020. The patients had at least one underlying condition. After 28 days of ICU admission, 784 patients had died, 824 had been discharged and 607 remained hospitalized.
  • Hospitals will be stretched to the limit by the oncoming surge of rescheduled surgeries, according to Johns Hopkins University researchers. "Even if patient demand was diminished by 50 percent, which is a tremendous number, then there's still going to be a backlog of almost 400,000 cases in orthopedics" alone, said Dr. Amit Jain, a spinal surgeon at Hopkins. New COVID-19 safety protocols are also likely to over-extend hospitals, the researchers said. Waiting rooms will have to be kept at a lower capacity to ensure social distancing.

April 26, 2021

  • Government agencies and municipalities are looking to acquire hotels that could be converted to “hotel-style” shelters for the homeless, according to the Chicago Tribune. Oregon is looking to spend as much as $65 million to buy 20 hotels, enough for roughly 2,000 people. California Governor Gavin Newsom’s proposed budget, includes $750 million to continue a program that helped municipalities buy hotels, motels, and apartment buildings to house and shelter homeless people. Experts cite the success of efforts to minimize the spread of the coronavirus by finding shelter for the homeless as key drivers of the plans. Firms with underperforming hotels may benefit from the programs.
  • About 77% of prospective travelers are less or much less concerned about travel safety for the second half of 2021 compared to the same period in 2020, according to a Global Rescue survey of more than 2,000 of its current and former members. The global vaccine rollout is helping boost consumer confidence, according to Global Rescue.
  • Advertising and search engine firm Google has introduced a new policy on its travel platform Google Travel in which hotels and travel companies can now appear for free in booking links, and won't have to pay the search engine for the transactions carried out by travelers. Analysts say that the move is intended to boost the tourism industry when the pandemic begins to wane.
  • The hotel industry reported all-time lows in occupancy and revenue per available room (RevPAR) in 2020, according to industry analytics firm STR. Occupancy averaged 44% during 2020, down 33.3% from the prior year. Average daily rate decreased 21.3% year over year to $103.25 while RevPAR decreased 47.5% to $45.48. The industry surpassed 1 billion unsold room nights for the first time in history, eclipsing the 786 million unsold room nights during the great recession in 2009.
  • Half of US hotel rooms will remain empty in 2021, according to the American Hotel & Lodging Association's State of the Hotel Industry 2021 report. A full recovery to 2019 occupancy levels is not expected until 2024 at the earliest.
  • Employment in the hotels and motels industry decreased 33.2% year over year in February but was up 28.6% from the low of May 2020.

May 11, 2021

  • United Microelectronics Corporation (UMC), the world’s fourth-largest contract chipmaker, is expanding its capacity to produce "mature technology" chips like those used in many household appliances. A pandemic-related shortage of semiconductors has slowed production of auto parts, leading to shortages. UMC said it would add capacity for manufacturing 20,000 wafers a month at 28 nanometers, one of the process technology nodes worst-hit by the global chip shortage, at an existing fabrication plant.
  • About 55% of consumers who have purchased an appliance during the pandemic did so online, according to the Association of Home Appliance Manufacturers. It was the first online appliance purchase for 70% of those consumers.
  • Household appliance manufacturing is among the many industries suffering from pandemic-related input shortages. Manufacturers cut back production when the pandemic started in March 2020, according to Scott Paul, president of the Alliance for American Manufacturing. They also cut raw material purchases in anticipation of declining consumer demand. Demand for goods did plunge in April but rebounded steadily, fed by households that have held up well during the pandemic. Consumer spending on goods rose nearly 6% in January, according to the US Department of Commerce, even as spending on services was up less than 1%. Manufacturers are now scrambling to restock raw materials in response to unexpectedly high demand. Experts warn, however, that demand could shift back to services in the summer as more Americans get vaccinated. Manufacturing could slow as a result.
  • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
  • Appliance manufacturers are putting more focus on hygiene since the beginning of the coronavirus pandemic. Manufacturers including LG Electronics Whirlpool claim that some of their products actively remove germs and allergens from their surfaces. Some of LG’s new refrigerators, for example, come with sterilizing ultraviolet lights fitted inside them. Whirlpool has launched a new line of washing machines that come with built-in heating units that are designed to kill germs in laundry, according to The Wall Street Journal. “All of our product development now is being done through the lens of hygiene,” Mark Choe, a senior vice president at Samsung’s digital appliances business division, told The Wall Street Journal.
  • Sales at electronics and appliance stores increased 10.5% in value month over month and 29.4% in value year over year in March, according to the US Census Bureau.
  • New single-family home sales increased 66.8% year over year and 20.7% month over month in March, according to the US Department of Commerce. Sales of previously-owned homes increased 12.3% year over year but decreased 3.7% month over month in March, according to the National Association of Realtors.
  • Household appliance manufacturing industry employment increased 2.9% year over year in March and was up 15.7% from the pandemic-related low of May 2020, according to the US Bureau of Labor Statistics.
  • Coffee brewing equipment sales are rising as people continue to observe stay-at-home guidelines. Keurig has noted a “spike in brewer sales,” and an increase in the amount of coffee people have been drinking at home since the crisis began. Home appliance manufacturer Breville says it’s seen a “steady increase” in sales of its drip and espresso machines. People were consuming on average 2.45 cups of coffee a day before the coronavirus outbreak, according to the results of a survey conducted by coffee industry website Sprudge. That number has since gone up to 2.77 cups, roughly a third cup extra a day, for an increase over 13%.
  • Consumers are opting to replace many appliances rather than have them repaired, according to consumer technology news site TWICE. Industry experts cite wariness or the outright fear of inviting strangers into a home due to the coronavirus outbreak as a key driver of increasing appliance replacements.

April 8, 2021

  • About 36% of construction contractors who responded to the first quarter US Chamber of Commerce Commercial Construction Index survey expect their revenue to increase during 2021, a jump of 11 percentage points from 25% in Q4 2020. Some 87% expect their revenue to either stay the same or increase, up from 86% last quarter. Most (86%) contractors also report a moderate to high level of confidence that the US market will provide enough new business in the next year. Nearly a quarter (24%) report a high level of confidence, up from 19% in Q4 2020. Contractors cited rising COVID-19 vaccination rates as a key driver of increasing confidence.
  • The third federal coronavirus relief package allocates $128 billion for helping K-12 public schools deal with the coronavirus pandemic. Schools will be able to use the funding for a variety of pandemic-related issues, including maintenance, repair, and/or replacement of HVAC and plumbing systems. Contractors are likely to benefit if such expenditures increase. Mark Hernandez, who runs the Environmental Engineering Microbiology and Disinfection Lab at the University of Colorado and has worked with local schools to improve their ventilation systems, says that "the design and operation of school HVAC systems have a significant influence" on students' exposure to the virus throughout the school day. "But the reality is that many of our nation's schools do not have HVAC systems operating up to modern performance standards".
  • Construction industry experts expect a surge in commercial renovations in 2021 due to tax changes included in the 2020 CARES Act. Facility upgrades qualified for tax deductions before the passage of the CARES Act, but to reap the full benefits, facility managers would have to claim a 2.5% write-off each year for up to 39 years. With the passing of the 2020 CARES Act, facility managers can write off 100% of qualifying facility improvement costs in the first year. A few improvements that qualify for the tax deduction are the installation of airflow management accessories, HVAC devices, and physical security and access control solutions.
  • Colleges and K-12 schools will receive $82 billion from the federal stimulus package signed into law in late December 2020 to help cover HVAC repair and replacement work intended to reduce the risk of coronavirus infections so schools can reopen.
  • HVAC contractors may benefit from attempts by businesses to improve ventilation systems. Major chains, including MGM Resorts International and the Four Seasons, have advertised that they are enhancing ventilation systems. A-Lodge Adventure Hotel in Boulder, CO, says that one of its selling points is that its rooms and suites have no shared ventilation between them. Businesses are also increasing use of heavy-duty filters to block microbes and installing systems that use ultraviolet light or electrically charged particles in the ductwork to kill the virus. Many of the methods to reduce pathogens have been around for years, but were geared more to hospitals than commercial buildings.
  • Industry experts are uncertain about the likely benefits of improved ventilation systems. Amesh Adalja, senior scholar at the Johns Hopkins Center for Health Security, said that most transmission is occurring as a result of close interpersonal contact. “The key question when going to hotels is not so much the ventilation, but who you’re interacting with there and where you’re interacting with people,” he said. Brian Castrucci, president and chief executive of the de Beaumont Foundation, a public health philanthropy, said that there has not been evidence of room-to-room transmission but he believes the potential is there.
  • Employment in the specialty trade contracting industry decreased 1.4% year over year in March but was up 13.5% from the pandemic-related low of April 2020.
  • Total construction spending decreased 0.8% month over month on an adjusted basis but increased 3.4% year over year on an unadjusted basis in February, according to the US Census Bureau. Residential construction spending decreased 0.2% month over month but increased 19.7% year over year in February. Nonresidential construction spending decreased 1.3% month over month and 7.8% year over year in February.
  • The number of building permits issued decreased 10.8% month over month but increased 17% year over year in February. Housing starts decreased 10.3% month over month and 9.3% year over year in February. Housing completions increased 2.9% month over month and 5% year over year in February.
  • Homebuilder sentiment, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, decreased to 82 in March from 84 in February. A reading of more than 50 indicates a positive outlook; a reading under 50 indicates a negative outlook. The outlook for home sales in six months increased to 83 from 80, while the outlook for buyer traffic was unchanged at 72.

April 28, 2021

  • Capital project budgets will continue to stay mostly on hold until COVID-19 stabilizes, according to Mike Star, chairman of the board for the Mechanical Service Contractors of America. Commercial HVACR sales are unlikely to recover significantly until capital project expenditures increase. Hunter Botto, president of the Plumbing-Heating-Cooling Contractors — National Association, agrees the commercial market is a challenge but notes that there will be opportunities for contractors to develop an expertise in providing air filtration and indoor air quality services, which are in high demand right now.
  • Global investments in supply chain and logistics startups hit $8.1 billion during Q4 2020, more than double the same period a year earlier, according to CB Insights data. Investments include companies building refrigerated storage for groceries. “There will be more demand growth, and there’s a lot of room for innovation,” says Chris Caton, a managing director at industrial real estate firm Prologis.
  • Industry experts expect a surge in commercial renovations in 2021 due to tax changes included in the 2020 CARES Act. Facility upgrades qualified for tax deductions before the passage of the CARES Act, but to reap the full benefits, facility managers would have to claim a 2.5% write-off each year for up to 39 years. With the passing of the 2020 CARES Act, facility managers can write off 100% of qualifying facility improvement costs in the first year. A few improvements that qualify for the tax deduction are the installation of airflow management accessories, HVAC devices, and physical security and access control solutions.
  • The coronavirus pandemic is changing demand patterns for HVACR equipment. The residential and commercial construction sectors saw major declines in the late winter/early spring 2020 as states shut down most construction projects. Both sectors bounced back going into the summer as those restrictions were lifted. Then in the mid-summer, the sectors started to diverge, with residential construction spending continuing to increase while the commercial sector lagged. Lodging construction, for example, decreased 23% from February to November 2020, according to the US Census Bureau. General contractors are mostly pessimistic about the outlook for the commercial sector, according to the 2021 AGC-Sage Construction Hiring and Business Outlook Survey. They are most negative about retail construction, followed by lodging and private office, higher education, and public building.
  • Employment in the US HVAC and commercial refrigeration equipment manufacturing industry decreased 1.1% year over year in February but was up 9.1% from the low of April 2020.
  • Inadequate ventilation can potentially contribute to an environment where COVID-19 is more easily spread by airborne transmission, according to guidance released by the Centers for Disease Control and Prevention (CDC). Exposure to respiratory droplets carrying the virus is the main way people contract COVID-19, according to the CDC. Updated guidance says the virus can spread through airborne particles that can linger in the air for minutes or hours, even among people who are more than 6 feet apart under certain circumstances.
  • Dry air and air-conditioned rooms can help spread the coronavirus, according to researchers who reviewed 10 international studies of swine flu and other infectious diseases. “The role of humidity seems to be extremely important to the airborne spread of COVID-19 in indoor environments,” the researchers reported. In more humid rooms, virus droplets become heavier and fall faster, “providing less chances for other people to breathe in infectious viral droplets.” Dry air makes the droplets shrink and remain suspended in air, becoming what the scientists describe as an “optimal route” for transmission.
  • US production of ventilation, heating, air-conditioning and refrigeration equipment increased 21.4% year over year in March and was up 55.8% from the pandemic-related low of May 2020.
  • US shipment volume of residential electric water heaters decreased 5.8% year over year in February, according to the Air-Conditioning, Heating, and Refrigeration Institute. Shipment volume increased for residential gas water heaters (0.9%), but decreased for commercial gas water heaters (-1.3%), and commercial electric water heaters (-15.1%) . Shipment volume increased for warm-air gas furnaces (49.9%) and warm-air oil furnaces (13.7%). Shipment volumes increased for central air conditioners and air-source heat pumps (14.1%) compared to a year ago.
  • Imports of HVACR equipment increased 22.5% year over year in the first two months of 2021 while exports decreased 6.1%.

May 11, 2021

  • US Education Secretary Miguel Cardona said in early May that he expects all schools to be open full-time in person for all students in the fall.  Industry experts say that millions of children typically rely on schools for mental health services. About 54% of public schools below high school were providing full-time in-person learning in early May, according to a survey released by the Education Department. The percentage has risen from 46 in January.
  • The Treasure Valley Family YMCA in Idaho will use a $10 million donation, the largest donation the organization has ever received, primarily to cover revenue losses caused by the coronavirus pandemic. The organization has lost an estimated $16 million in operating revenue, more than 75% of its $20 million annual budget, since the pandemic began. The Treasure Valley Family YMCA is among 384 US organizations that received a portion of $4.16 billion in donations from MacKenzie Scott, whose ex-husband is Amazon founder Jeff Bezos.
  • The US Senate passed President Biden's $1.9 trillion coronavirus relief package in early March, directing a third round of stimulus checks to most Americans. Demand for individual and family services may decrease if financial pressures on individuals and families ease. The aid to consumers comes as millions of Americans struggle to pay for food and housing, and face the loss of eviction protections that expire at the end of March 2021. The Senate bill directs $1,400 direct payments to individuals earning up to $75,000, but cuts off eligibility for single people earning more than $80,000. For couples who file a joint federal income tax return, the phase-out begins at those making $150,000 and ends at $160,000. The bill will return to the House of Representatives for final approval, given that the Senate and House versions of the relief bill have some differences, and then head to President Biden for his signature.
  • A third round of $1,400 checks would allow nearly 23 million adults to pay their expenses for more than four months without going into more debt or using their savings, according to Morning Consult economist John Leer.
  • Individual and family services offering online programs may benefit from a proposed $20 billion investment in a variety of programs intended to increase the availability of wired and wireless internet access. The plan proposed by the Biden administration would increase funding for Community Connect grants and would direct the National Telecommunications and Information Administration to support areas that want to build municipally-owned networks. This is in addition to a $20 billion broadband initiative that was begun under the Trump administration that would spend $2 billion per year over 10 years to improve broadband in the US.
  • A survey of 165 substance abuse treatment centers by the National Association of Addiction Treatment Providers found that 43% had to reduce patient capacity, nearly a third saw a decrease in patient retention, and 10% had to shut down because of the pandemic.
  • Family service providers are cutting staff as revenue declines during the coronavirus outbreak. YMCA affiliates were typically operating on margins of 3% or less before the pandemic, according to The New York Times. Revenues are down 30% to 50% nationwide, and most affiliates have furloughed 70% to 95% of their workers. The YMCA is not the only provider impacted by the pandemic: Tens of thousands of nonprofits are likely to close without some kind of rescue package, the research group Candid concluded from an analysis of tax filings.
  • Some services that switched to televisits during the lockdown hope to continue with them until more consistent approaches to in-person visits are developed.

April 18, 2021

  • Accelerating progress in vaccinating people against the coronavirus and continuing federal stimulus spending will make the US the largest single contributor to global growth for the first time since 2005, according to Oxford Economics. Industrial machinery distributors are likely to benefit from demand growth. China is expected to grow at a faster annual rate in 2021 than the US, but since the $21 trillion US economy is still significantly larger than China’s, measured in dollars, the American contribution to global growth will be slightly larger.
  • About 50% of middle-market manufacturers plan to identify alternate or backup suppliers this year to overcome disruptions wrought by the pandemic, according to the 2021 BDO Manufacturing CFO Outlook Survey. About 22% reported plans to address supply chain weakness by reshoring to the US in 2021. Some 24% of those surveyed plan to relocate their supply chains to another country in 2021. Europe was listed as the most stable market outside of the US to source materials over the long term. Only 10% said that China was a stable location outside the US for long-term sourcing.
  • Manufacturing optimism, as measured by The National Association of Manufacturers' Manufacturers’ Outlook Survey, increased for the second quarter in a row in Q4 2020. About 74% of respondents said they were either somewhat or very positive about the outlook for their company. The number is a noticeable improvement following readings of 66% in Q3 and 33.9% in Q2. The inability to attract and retain talent returned as the top concern in the fourth quarter after two quarters with weaker domestic demand topping the list of primary business challenges.
  • New orders for durable goods increased 0.6% year over year in February, according to the US Census Bureau. Excluding transportation, new orders increased 2.2%. Excluding defense, new orders increased 1.5%. New orders decreased 0.8% month over month in February, ending nine consecutive month-over-month increases.
  • The Institute for Supply Management’s monthly Purchasing Managers’ Index (PMI) increased to 64.7% in March from 60.8% in February. The figure indicates expansion in the overall economy for the 10th month in a row after contraction in April 2020. The increase indicates a faster rate of expansion compared to the prior month. Any reading above 50% indicates expansion compared to the prior month, while anything under 50% indicates contraction. The New Orders Index registered 68%, up from February’s reading of 64.8%. The Production Index registered 68.1%, up from the February reading of 63.2%. The Employment Index registered 59.6%, up from the February reading of 54.4%.
  • Manufacturing employment decreased 3.3% year over year in March but was up 7.8% from the pandemic-related low of April 2020, according to the US Bureau of Labor Statistics.

May 11, 2021

  • A letter addressed to congressional leaders of both parties and to White House officials from groups representing some of the world’s biggest technology companies argues against specifying what kind of semiconductor manufacturing should get federal financial support for domestic expansion. The letter specifically objects to requests from some companies -- like automakers -- seeking an increase of manufacturing capacity for more basic chips. “The market-distorting effect of ‘setting aside’ a portion of new capacity for legacy chips for any single, private sector would squeeze the remaining chip-consuming industries into the remaining new manufacturing capacity, artificially constraining supply,” the letter states. Industry experts say that pandemic-related supply chain problems have boosted support for federal funding of domestic semiconductor manufacturing.
  • Real disposable income, a driver of spending on manufactured goods, increased 23% in March following an 8.2% decrease in February and an 11% increase in January. The increase in disposable income in March largely reflected an increase in government transfer payments to individuals, primarily the additional round of direct economic impact payments authorized in The American Rescue Plan Act. The January increase was driven in large part by government transfer payments, which rose 52% from the prior month, reflecting both stimulus checks and the supplemental $300 weekly jobless benefit payments. Real personal consumption expenditures increased 3.6% in March following a 1% decrease in February, following a 2.4% increase in January.
  • The Institute for Supply Management’s monthly Purchasing Managers’ Index (PMI) decreased to 60.7 in April from 64.7% in March. The figure indicates expansion in the overall economy for the 11th month in a row after contraction in April 2020. The four percentage point decrease from the prior month indicates a slower rate of expansion, however. Any reading above 50% indicates expansion compared to the prior month, while anything under 50% indicates contraction. The New Orders Index registered 64.3%, declining 3.7 percentage points from the March reading of 68%. The Production Index registered 62.5%, a decrease of 5.6 percentage points compared to the March reading of 68.1%. The Backlog of Orders Index registered 68.2%, 0.7 percentage point higher compared to the March reading of 67.5%.
  • The average GDP growth expectation among Wall Street analysts is 4.7% for 2021, according to FactSet.
  • New orders for durable goods increased 26% year over year in March, according to the US Census Bureau.
  • Industrial machinery manufacturing industry employment decreased 0.8% year over year in March but was up 4.9% from the pandemic-related low of April 2020, according to the US Bureau of Labor Statistics.

April 18, 2021

  • Accelerating progress in vaccinating people against the coronavirus and continuing federal stimulus spending will make the US the largest single contributor to global growth for the first time since 2005, according to Oxford Economics. Industrial supply distributors are likely to benefit from demand growth. China is expected to grow at a faster annual rate in 2021 than the US, but since the $21 trillion US economy is still significantly larger than China’s, measured in dollars, the American contribution to global growth will be slightly larger. Industrial supply distributors are likely to benefit as demand for goods increases.
  • About 50% of middle-market manufacturers plan to identify alternate or backup suppliers this year to overcome disruptions wrought by the pandemic, according to the 2021 BDO Manufacturing CFO Outlook Survey. About 22% reported plans to address supply chain weakness by reshoring to the US in 2021. Some 24% of those surveyed plan to relocate their supply chains to another country in 2021. Europe was listed as the most stable market outside of the U.S. to source materials long term. Only 10% said China was a stable location outside the US for long-term sourcing.
  • A new supply chain model based on quick recovery in the event of threats to a business’ supply chain stability will require more warehouse and distribution space in last-mile markets, according to REBusiness Online. Industrial supply distributors may soon be paying more for space in last-mile markets where space to develop new facilities is limited.
  • Industrial supply distributors may benefit from attempts to reduce US reliance on rare earths imports from China. Rare earth metals are used in the production of high-tech goods, including smartphones, electric vehicles, and modern defense systems. The RARE Act introduced in the US Congress would provide tax incentives through deductions on property used for the mining and on the purchase of materials extracted within the US. It would also create a $50 million yearly grant program through the Secretary of the Interior for the next four fiscal years. China produces over 85% of the world’s rare earth materials, and most US imports of them come from China, according to the Center for Strategic and International Studies (CSIS).
  • New orders for durable goods increased 0.6% year over year in February, according to the US Census Bureau. Excluding transportation, new orders increased 2.2%. Excluding defense, new orders increased 1.5%. New orders decreased 0.8% month over month in February, ending nine consecutive month-over-month increases.
  • Manufacturing employment decreased 3.3% year over year in March but was up 7.8% from the pandemic-related low of April 2020, according to the US Bureau of Labor Statistics.

April 26, 2021

  • President Biden's infrastructure investment proposal includes $17 billion for inland waterways, coastal ports, and land ports of entry that are critical for national freight movement. The American Association of Port Authorities called the proposal “a substantial down payment on the $29 billion in federal investments necessary to modernizing our ports and ensuring that our trade infrastructure remains strong.” Industry analysts who say that the coronavirus pandemic has exposed the vulnerabilities of the just-in-time shipping model argue that maintaining and improving all parts of our inland waterway infrastructure are essential.
  • The pandemic has forced many maritime companies to retool their services and business plans. Demand for inland water transport of energy-related products has declined due to depressed worldwide demand for oil while lines that carry grain mostly for export have thrived, for example. American Commercial Barge Line, one of the nation’s largest barge operators, said it has transported more than 1.6 million gallons of denatured ethanol, a key ingredient for alcohol-based hand sanitizers, disinfectants, sprays, wipes, and cleaners, along the inland river system since the pandemic began. Industry experts expect high demand for residential housing to drive transport of wood products during 2021.
  • President Biden signed an executive order formally confirming his administration’s policy to strongly support US maritime workers and businesses serving domestic trades under the Jones Act. The order reiterates the requirement for transportation of merchandise between two US points is carried on US built, owned, and crewed vessels.
  • US Secretary of Transportation Pete Buttigieg said that the Jones Act was “so important to a maritime industry that creates hundreds of thousands of jobs and the shipbuilding industry”. He also pledged to carry out the administration’s ambitious plans to rebuild US transportation infrastructure, including its waterways, which require billions of dollars of upgrades.
  • The National Defense Authorization Act (NDAA) of 2020 includes language to strengthen Jones Act provisions in the construction and operation of offshore wind farms in the United States. The new language eliminates ambiguity about the extent to which Jones Act vessels will be required, and will support growth of American mariner jobs in the construction of offshore wind farms, according to Jennifer Carpenter, president of the American Waterways Operators.

May 11, 2021

  • As coronavirus-related losses pile up, small business owners who thought they would be covered by business disruption insurance have mostly discovered otherwise. A few years after the SARS outbreak, some insurers inserted clauses excluding coverage for “loss due to virus or bacteria,” according to the Philadelphia Inquirer. Several states – including New York, Oregon, Pennsylvania, Rhode Island, and Washington – have introduced legislation to prevent insurers from denying business interruption claims resulting from COVID-19-related losses. Many legal experts doubt that states will succeed in efforts to retroactively change policy language to allow for claims related to COVID-19 business disruptions. Insurers are vigorously fighting such efforts in court.
  • As of early May, about 10,300 COVID-19-related insurance lawsuits have been filed in the US, according to a litigation tracker maintained by law firm Hunton Andrews Kurth. Some legal experts note the latest cases have gotten larger and possibly more sophisticated. Such cases have involved larger organizations – including a major New Jersey hospital system, colleges and universities, and Ceasers Entertainment. Other recent cases were class actions where businesses banded together to sue one or a handful of insurers. The recent uptick in cases may be due to some business interruption plaintiff attorneys having waited to form their legal strategies after seeing how judges ruled in earlier cases, according to Claims Journal. Of cases where courts have ruled, about 80% have been in favor of insurers, according to a litigation tracker by the University of Pennsylvania’s Carey Law School. Reversing the legal trend is expected to be difficult for plaintiffs’ attorneys, but some legal watchers note the tone could change when more cases reach appellate courts.
  • Additional guidance regarding COVID-19 issued in early April by the Centers for Disease Control and Prevention (CDC) may further undermine business interruption claim arguments that assert physical damages due to the coronavirus clinging to surfaces. The CDC guidance suggests the virus primarily spreads through the air. The agency said, “It is possible for people to be infected through contact with contaminated surfaces or objects (fomites), but the risk is generally considered to be low.” However, some attorneys have filed suits that allege airborne viral contamination does cause physical damages. Such arguments, including in cases involving mold, have been successful for plaintiffs in the past.
  • As business interruption lawsuits progress through the courts, businesses and their attorneys are adopting new strategies including class action suits as well as allegations that insurers acted in bad faith in their denying of claims coverage, according to Property Casualty 360. Bad faith laws vary from state to state, but they generally require insurers to provide timely and thorough investigations and offer reasonable justifications for coverage decisions. Industry insiders suggest insurance companies can minimize the effects of any bad faith litigation by ensuring investigations and facts are sound, and anticipating policyholder arguments for coverage and being prepared to address them.
  • Early in the pandemic, some auto insurers offered customers rebates and discounts as the number of miles driven in the US – and therefore the number of accident claims – declined. While miles driven have since crept upward, they are generally below normal, according to Federal Highway Administration Statistics. Some consumer advocacy groups suggest consumers are due for another round of refund relief as some insurers continue to report high profits from auto insurance operations. The Consumer Federation of America and the Center for Economic Justice have sent letters to state insurance commissioners urging them to require insurers to issue additional refunds, according to The New York Times. California’s Insurance Commissioner has alleged consumers in the state have been overcharged and compelled insurers to report their plans for additional refunds in California, the country’s largest insurance market. Massachusetts has taken similar action. Industry watchers note that if California is successful in compelling additional premium relief, it will be difficult for insurers to avoid similar rebates in other states.
  • Analytics may be the key to ensuring small business insurers effectively adapt to the myriad of challenges created by the COVID-19 pandemic, according Property Casualty 360. In 2020, the number of companies that filed for Chapter 11 bankruptcy reached their highest level since 2013, according to the American Bankruptcy Institute (ABI). About half of Chapter 11 filings were for subsidiaries or larger corporate entities. The rise in business failures is likely to disrupt insurance carrier operating models, marketing strategies, and expense ratios. Analytics tools can help business insurers assess their portfolios using natural language processing (NLP) engines which can identify policies that are likely to require a payout. Portfolio analysis can also identify COVID-19-related changes in customer segmentation- such as industry type – that can aid in recalibrating marketing mix. Analytics also can be used to identify claims where “no/low-touch” claims adjustment automation tools are the most efficient claims processing option.
  • Even before the pandemic, in-person meetings between insurance agents and clients were on the decline. The pandemic hastened the use of web-based meeting tools as agents worked from home. As insurance companies move to reduce fixed costs, some firms are rethinking their real estate footprints. Nationwide has said it will close some of its offices as its shift to more remote work increased efficiency.
  • The ongoing effects of the pandemic continue to put economic pressure on consumers and businesses which could affect insurance carrier profitability. In a recent survey by credit bureau TransUnion, respondents expressed concern about being able to afford their car insurance, car and mortgage payments, and their life insurance bill. Among respondents who own a car, more than 70% said they use their car less or not at all since the onset of the pandemic. As they drive less, more consumers are becoming open to usage-based insurance. More than 60% of those surveyed said they would allow an insurance carrier to use telematics systems to collect real-time data about their driving habits if it would lower their premium.
  • After more than a year since the first coronavirus-related business interruption lawsuits were filed, some industry watchers suggest it could behoove policyholders and insurers to consider mediation in some cases. Mediation may be a viable option as the costs and uncertainty surrounding business interruption lawsuits mount. Some note that mitigation may be especially useful in cases where a policyholder’s claim survives the initial motion to dismiss. Mediation, which can be conducted virtually, can help the parties discover if a settlement might be possible.
  • Nearly half of US consumers made changes to manage their insurance costs during the pandemic, according to the J.D. Power 2021 US Insurance Shopping Study. About 46% of consumers made changes to their policies, including reducing coverage (17% of respondents), shopping for a new carrier (15%), and increasing their deductible or switching carriers (12%). J.D. Power noted that despite the industry’s annual ad budget of nearly $10 billion, consumers see little differentiation among top insurance brands. Given the level of industry disruption and the current economic recovery, J.D. Power suggests insurers need to work harder to meet higher consumer expectations in terms of price, flexibility, coverage, and customer service.

May 11, 2021

  • Some industry watchers expect the pandemic to accelerate the insurance industry’s leveraging of digital technology – including artificial intelligence (AI) – to reduce in-person interactions, including claims adjusting. Nearly 85% of insurers plan to increase their spending on data and analytics in 2021, according to a recent survey by Insurity. Insurers are under increasing competitive pressure to build analytics into all points in the decision-making process from underwriting to claims.
  • Prior to the pandemic, some insurance companies were reluctant to have clients use apps to upload photos and perform other tasks typically done by an adjuster. Insurers didn’t want clients to feel as if they were doing the adjuster’s work for them and have a bad claims experience, a leading cause of losing business. However, industry insiders say clients like using apps that help them feel more in control of some claims tasks like uploading photos and documents, claims progress tracking, and repair scheduling. Such apps not only cut down on physical interactions between adjusters and clients, they can also reduce insurer costs.
  • Adopting AI might also help claims adjusters overcome a shortage of new entrants to the field that the COVID-19 pandemic made worse, according to Property Casualty 360. COVID-19-related workers’ comp and business interruption claims have put extra pressure on claims teams at a time when the industry has trouble attracting younger workers even amid high unemployment. Only 4% of millennials are interested in an insurance career, according to a survey by The Hartford. Applying AI like machine learning to some of the more rote, repetitive claims tasks – such as cost tracking – claims personnel can focus on more interesting duties that involve nuanced problem solving.
  • While the number of accidents and auto claims are expected to gradually increase, the pandemic’s effect on driving frequency and claims is projected to reduce auto insurance rates for 2021 for the first time in 10 years, according to ValuePenguin. Rates are expected to go back up in 2022 amid normalizing driving routines, and as claims get more expensive due to the rising technology content in automobiles.
  • As coronavirus-related losses pile up, small business owners who thought they would be covered by business disruption insurance have mostly discovered otherwise. A few years after the SARS outbreak, some insurers inserted clauses excluding coverage for “loss due to virus or bacteria,” according to the Philadelphia Inquirer. Several states – including New York, Oregon, Pennsylvania, Rhode Island, and Washington – have introduced legislation to prevent insurers from denying business interruption claims resulting from COVID-19-related losses. Many legal experts doubt that states will succeed in efforts to retroactively change policy language to allow for claims related to COVID-19 business disruptions. Insurers are expected to vigorously fight such efforts in court.
  • As of early May, about 10,300 COVID-19-related insurance lawsuits have been filed in the US, according to a litigation tracker maintained by law firm Hunton Andrews Kurth. After a sustained lull in new complaints, more than 125 new cases were filed in March 2021, the highest monthly number since August 2020. Some legal experts note the latest cases have gotten larger and possibly more sophisticated. Such cases have involved larger organizations – including a major New Jersey hospital system, colleges and universities, and Ceasers Entertainment. Other recent cases were class actions where businesses banded together to sue one or a handful of insurers. The recent uptick in cases may be due to some business interruption plaintiff attorneys having waited to form their legal strategies after seeing how judges ruled in earlier cases, according to Claims Journal. Of cases where courts have ruled, about 80% have been in favor of insurers, according to a litigation tracker by the University of Pennsylvania’s Carey Law School. Reversing the legal trend is expected to be difficult for plaintiffs’ attorneys, but some legal watchers note the tone could change when more cases reach appellate courts.
  • Additional guidance regarding COVID-19 issued in early April by the Centers for Disease Control and Prevention (CDC) may further undermine b