05.06.21
Research provided by Smithers
In late 2019, Smithers published The Future of Global Nonwovens to 2024 report, with the data finalized before the Covid-19 pandemic struck. The pandemic has had a significant impact on nonwovens consumption across the world, so Smithers has revised its forecasts to take into account the likely economic impacts, and changes in consumer behavior resulting from the pandemic in the short and medium term. The different categories and production methods will fare differently as companies revise their strategies.
In the long term, the overall nonwovens market will most likely see a small effect (-1.5% decrease in volume in 2024) from Covid-19, and even this small effect is unlikely to be permanent. The effects will be significantly different for the disposable nonwovens (consumer) market and the durable nonwoven (industrial) market. Items such as face masks, medical gowns, and disinfectant wipes spiked in 2020, but baby diapers and wipes should be recession proof through 2024. Construction and automotive, however, will see major impacts from global economic contraction.
During this crisis, there are two major drivers; Covid-19 critical product demand and global economic growth. This white paper critically examines how these drivers are impacting disposable and durable nonwovens and their sub-segments, as well as how each sector is likely to recover post-pandemic. Three potential future scenarios are also presented, with detailed insights into how the outcomes of these different scenarios will likely impact the industry
Key Figures
Future Scenarios
The IMF economic update on April 14, 2020, was taken as the base case for the below models. As we pass the one-year mark, it has become clear that the most likely scenario resides between the ‘probable’ impact and the ‘pessimistic’ impact.
Scenario 1: The Optimistic Impact
In this model, the virus is largely controlled in 3-6 months of lockdowns, measures are largely successful with virus proving to be seasonal with the vaccine available by the end of 2020. We’ll see a short-term dip, then general recovery to new normal in a ‘V’ recession as the short-term monetary policies are broadly successful lasting for two quarters before returning to growth. Oil price will be low, aiding in recovery. In the nonwovens market short term, consumers and institutions will significantly increase consumption of face masks, disinfecting wipes, medical garments, adult moist toilet tissue; longer term they maintain higher levels of these critical products as new learned behaviors increase disinfecting procedures. Monetary policies stimulate recovery of automotive / transportation and construction industries.
Scenario 2: The ‘Most Likely’ Impact
This model sees a longer period of time in 2020 needed to get the virus under control, with the consequence that many lockdowns persist into Q3 & Q4. Consumers may be wary of returning to businesses, more layoffs and business closings will occur. Governments may continue to attempt to pursue offsetting stimulus measures, but their impact may not be sufficient to replace lost economic activity. A full four quarters is required to return the global economy to pre-crisis growth. In the nonwovens market short term, consumers and institutions will significantly increase consumption of face masks, disinfecting wipes, medical garments, adult moist toilet tissue; longer term they maintain higher levels of these critical products as new learned behaviors increase disinfecting procedures. Automotive / transportation, construction and related industries remain depressed through 2024.
Scenario 3: The Pessimistic Impact
This model will see the pandemic out of control in the USA and Europe, with countries continuing border control measures. There will be no vaccine until mid 2021; air travel, hotels, holiday sector, pubs, clubs, bars, and restaurants do not reopen for many months as lockdowns are imposed. Schools, nurseries and colleges remain closed with some parents unable to get care, so remaining off work for most of 2020. A full eight to 10 quarters is required to return the global economy to pre-crisis growth, In the nonwovens market short term, consumers and institutions will significantly increase consumption of face masks, disinfecting wipes, medical garments, adult moist toilet tissue; longer term they maintain higher levels of these critical products as new learned behaviors increase disinfecting procedures. Automotive/transportation, construction and related industries remain depressed through 2024.
Economic Impact on Nonwovens Industry
The Covid-19 pandemic is inflicting high and rising human costs worldwide, and the necessary protection measures are severely impacting economic activity. As a result of the pandemic, the global economy was predicted to contract sharply by -4.2% in 2020, much worse than during the 2008-09 recession. The economic fallout is acute in specific sectors, and so policymakers need to implement substantial targeted fiscal, monetary, and financial market measures to support affected households and businesses domestically. Internationally, strong multinational cooperation is essential to overcome the effects of the pandemic.
As a result of the crisis, the nonwovens industry has almost become two separate industries—disposable and durable. The disposable nonwovens industry, providing products that are critical for healthcare and safety during the pandemic, is experiencing high levels of consumption. The longer this part of the crisis continues, the higher the level of disposable nonwovens consumption. The durable nonwovens industry is composed mainly of products which are being strongly affected by the global economy. The longer the economic crisis continues, the lower the level of durable nonwovens consumption. The two parts balance the effect of Covid-19 on the overall global nonwovens market. In 2020, overall nonwovens volume was expected to deviate by +0.1% from forecasts published in 2019; by 2024, volumes will deviate by -1.5%.
Sector Impact: Disposable Nonwovens
The two most critical disposable nonwovens based products are the medical nonwovens sub-segment (including the drastically needed face mask market) and home care wipes (including the sold out disinfecting wipes market).
The medical nonwovens was projected to spike in 2020, with even the worst case scenario projecting a 12.2% increase in consumption. Longterm, post-Covid, most scenarios show that medical nonwovens will return to near (+1.1%) base case while the pessimistic scenario projects a return to base case by 2024.
The home care wipes market increased significantly in 2020, with all scenarios projecting a 10.2-15.7% increase over the base case. The market is projected to retain some of this increase by the optimistic scenario (+6.5%) and most likely scenario (+1.4%), while the pessimistic scenario projects no gain in 2024.
Sector Impact: Durable Nonwovens
The two durable nonwovens sub-segments focused on here are the automotive and construction market segments as they have a much larger effect on the overall nonwovens market.
The automotive segment, including all transportation, was projected to experience a -5.0% to -8.2% decrease in 2020 according to all scenarios. By 2024, the most optimistic projections are a return to the base case volumes, whilst the pessimistic projects a -9.7% decrease, with the most likely projection being a -4.9% drop. The construction related markets, including building / roofing and floor coverings, were projected to drop from -2.3% to -10.9% in 2020.
Projections in 2024 vary from no change to a -7.8% decrease, with the most likely projection at -2.9%.
Durable nonwovens will be -2.7% below base. In the long term, the overall nonwovens market will most likely see a small effect (-1.5% decrease in volume in 2024) from Covid-19, and even this small effect is unlikely to be permanent. The effects will be significantly different for the disposable nonwovens (consumer) market and the durable nonwoven (industrial) market.
Smithers is a major global market research provider. We can identify who is expanding and/or entering new markets, who is offering new equipment or products, which markets will still be under-served in 2022, and which markets will be over-supplied.
In late 2019, Smithers published The Future of Global Nonwovens to 2024 report, with the data finalized before the Covid-19 pandemic struck. The pandemic has had a significant impact on nonwovens consumption across the world, so Smithers has revised its forecasts to take into account the likely economic impacts, and changes in consumer behavior resulting from the pandemic in the short and medium term. The different categories and production methods will fare differently as companies revise their strategies.
In the long term, the overall nonwovens market will most likely see a small effect (-1.5% decrease in volume in 2024) from Covid-19, and even this small effect is unlikely to be permanent. The effects will be significantly different for the disposable nonwovens (consumer) market and the durable nonwoven (industrial) market. Items such as face masks, medical gowns, and disinfectant wipes spiked in 2020, but baby diapers and wipes should be recession proof through 2024. Construction and automotive, however, will see major impacts from global economic contraction.
During this crisis, there are two major drivers; Covid-19 critical product demand and global economic growth. This white paper critically examines how these drivers are impacting disposable and durable nonwovens and their sub-segments, as well as how each sector is likely to recover post-pandemic. Three potential future scenarios are also presented, with detailed insights into how the outcomes of these different scenarios will likely impact the industry
Key Figures
- Global nonwovens consumption was estimated at 11,731,900 tons in 2020, with a 6.6% CAGR to 2024 in volume.
- In 2020, global nonwovens consumption was expected to decrease slightly by about -0.5%. By 2024, global nonwovens will change by +0.1% to -4.2%.
- By 2024, disposable nonwovens will be +0.1% above base. Durable nonwovens will be -2.7% below base.
Future Scenarios
The IMF economic update on April 14, 2020, was taken as the base case for the below models. As we pass the one-year mark, it has become clear that the most likely scenario resides between the ‘probable’ impact and the ‘pessimistic’ impact.
Scenario 1: The Optimistic Impact
In this model, the virus is largely controlled in 3-6 months of lockdowns, measures are largely successful with virus proving to be seasonal with the vaccine available by the end of 2020. We’ll see a short-term dip, then general recovery to new normal in a ‘V’ recession as the short-term monetary policies are broadly successful lasting for two quarters before returning to growth. Oil price will be low, aiding in recovery. In the nonwovens market short term, consumers and institutions will significantly increase consumption of face masks, disinfecting wipes, medical garments, adult moist toilet tissue; longer term they maintain higher levels of these critical products as new learned behaviors increase disinfecting procedures. Monetary policies stimulate recovery of automotive / transportation and construction industries.
Scenario 2: The ‘Most Likely’ Impact
This model sees a longer period of time in 2020 needed to get the virus under control, with the consequence that many lockdowns persist into Q3 & Q4. Consumers may be wary of returning to businesses, more layoffs and business closings will occur. Governments may continue to attempt to pursue offsetting stimulus measures, but their impact may not be sufficient to replace lost economic activity. A full four quarters is required to return the global economy to pre-crisis growth. In the nonwovens market short term, consumers and institutions will significantly increase consumption of face masks, disinfecting wipes, medical garments, adult moist toilet tissue; longer term they maintain higher levels of these critical products as new learned behaviors increase disinfecting procedures. Automotive / transportation, construction and related industries remain depressed through 2024.
Scenario 3: The Pessimistic Impact
This model will see the pandemic out of control in the USA and Europe, with countries continuing border control measures. There will be no vaccine until mid 2021; air travel, hotels, holiday sector, pubs, clubs, bars, and restaurants do not reopen for many months as lockdowns are imposed. Schools, nurseries and colleges remain closed with some parents unable to get care, so remaining off work for most of 2020. A full eight to 10 quarters is required to return the global economy to pre-crisis growth, In the nonwovens market short term, consumers and institutions will significantly increase consumption of face masks, disinfecting wipes, medical garments, adult moist toilet tissue; longer term they maintain higher levels of these critical products as new learned behaviors increase disinfecting procedures. Automotive/transportation, construction and related industries remain depressed through 2024.
Economic Impact on Nonwovens Industry
The Covid-19 pandemic is inflicting high and rising human costs worldwide, and the necessary protection measures are severely impacting economic activity. As a result of the pandemic, the global economy was predicted to contract sharply by -4.2% in 2020, much worse than during the 2008-09 recession. The economic fallout is acute in specific sectors, and so policymakers need to implement substantial targeted fiscal, monetary, and financial market measures to support affected households and businesses domestically. Internationally, strong multinational cooperation is essential to overcome the effects of the pandemic.
As a result of the crisis, the nonwovens industry has almost become two separate industries—disposable and durable. The disposable nonwovens industry, providing products that are critical for healthcare and safety during the pandemic, is experiencing high levels of consumption. The longer this part of the crisis continues, the higher the level of disposable nonwovens consumption. The durable nonwovens industry is composed mainly of products which are being strongly affected by the global economy. The longer the economic crisis continues, the lower the level of durable nonwovens consumption. The two parts balance the effect of Covid-19 on the overall global nonwovens market. In 2020, overall nonwovens volume was expected to deviate by +0.1% from forecasts published in 2019; by 2024, volumes will deviate by -1.5%.
Sector Impact: Disposable Nonwovens
The two most critical disposable nonwovens based products are the medical nonwovens sub-segment (including the drastically needed face mask market) and home care wipes (including the sold out disinfecting wipes market).
The medical nonwovens was projected to spike in 2020, with even the worst case scenario projecting a 12.2% increase in consumption. Longterm, post-Covid, most scenarios show that medical nonwovens will return to near (+1.1%) base case while the pessimistic scenario projects a return to base case by 2024.
The home care wipes market increased significantly in 2020, with all scenarios projecting a 10.2-15.7% increase over the base case. The market is projected to retain some of this increase by the optimistic scenario (+6.5%) and most likely scenario (+1.4%), while the pessimistic scenario projects no gain in 2024.
Sector Impact: Durable Nonwovens
The two durable nonwovens sub-segments focused on here are the automotive and construction market segments as they have a much larger effect on the overall nonwovens market.
The automotive segment, including all transportation, was projected to experience a -5.0% to -8.2% decrease in 2020 according to all scenarios. By 2024, the most optimistic projections are a return to the base case volumes, whilst the pessimistic projects a -9.7% decrease, with the most likely projection being a -4.9% drop. The construction related markets, including building / roofing and floor coverings, were projected to drop from -2.3% to -10.9% in 2020.
Projections in 2024 vary from no change to a -7.8% decrease, with the most likely projection at -2.9%.
Durable nonwovens will be -2.7% below base. In the long term, the overall nonwovens market will most likely see a small effect (-1.5% decrease in volume in 2024) from Covid-19, and even this small effect is unlikely to be permanent. The effects will be significantly different for the disposable nonwovens (consumer) market and the durable nonwoven (industrial) market.
Smithers is a major global market research provider. We can identify who is expanding and/or entering new markets, who is offering new equipment or products, which markets will still be under-served in 2022, and which markets will be over-supplied.
