In this quarterly briefing, we take a look at developments in the global home care industry. The main story is a strong upgrade for the home care market in the US, which managed to counterbalance poor development in other regions. This reports looks at factors leading to a more positive outlook for the US but also why the home care industry still faces challenges in the country. Furthermore, we look into the impact of a potential Trump Trade War scenario.
The latest quarterly revision (Q2 2018) of the global home care industry forecast model shows slightly negative, almost stagnant, growth development. The global Passport baseline value CAGR for 2016-2022 has been revised by 0.003 percentage point -which equates to USD22.5 million. While the US witnessed a strong upswing, it is MEA, Asia Pacific and Latin America seeing a downgrade in home care value sales. Without the USD205 million contribution by the US, the global home care industry would have seen a stronger decline during the Q2 2018 revision.
The US market benefits from a tax cut, signed into law by President Trump in December 2017. Increased disposable income for US consumers is expected to result in consumers trading up to non-essentials and more premium, higher quality products. The positive trend is further supported by an increase in the total population, naturally boosting demand for home care products in the country.
While economic indicators suggest rosy conditions in the US, there are factors inhibiting growth potential of home care in the country. Increasing price pressure on manufacturers is leading to a decline in average unit prices. And with Amazon developing new concepts of frictionless shopping, a real threat is posed to brand loyalty as the call for convenience and time-saving creates passive shopping.
In this report, we turn our attention to the US, which despite seeing an upgrade in our quarterly revision, remains showing negative value growth development. Aside from growth-inhibiting factors that can already be observed, we take a further look at the potential scenario of a Trump Trade War and how any decision by Donald Trump to impose further tariffs on other nations would impact home care in the US.
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