A faster-than-expected recovery in US production results in supply disruptions and higher costs for materials used in high-demand products.
Prices for steel, aluminum, timber and other materials are rising in response to higher order volumes. Merchandise supply chains are now clogged with orders, prompting some manufacturers to add weekend and overtime hours for employees. Orders that took a week or two to complete in the summer now require six to eight weeks, according to manufacturers facing extended waiting times for essential supplies.
“Lack of availability is what’s killing you,” said Mark Verhein, president of Church Metal Spinning Co., a steel parts manufacturer for large industrial engines in Milwaukee. “If you can’t get the material, it’s annoying.”
When many factories closed more than a month last spring to control the spread of coronavirus, production of industrial goods also ceased. Stocks evaporated, and suppliers shied away from rising production while expecting a slow recovery in production in an American economy that had entered a recession in February. But demand for durable goods rose in late summer and soared in the fall, even though Covid-19 infections rose to record levels.