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A faster-than-expected recovery in manufacturing in the United States leads to supply disruptions and higher costs for materials used in products meeting increased demand.
The prices of steel, aluminum, wood and other materials are increasing due to the increase in order volumes. Commodity supply chains are now cluttered with orders, forcing some producers to add weekend hours and overtime for employees. Orders that used to take a week or two to fill during the summer now take six to eight weeks, according to manufacturers who face extended wait times for essential supplies.
“Lack of availability is what is killing you,” said Mark Verhein, president of Church Metal Spinning Co., a manufacturer of steel parts for large industrial engines based in Milwaukee. “If you can’t get the material, it’s frustrating.”
When many factories closed for more than a month last spring to contain the spread of the coronavirus, production of industrial products also fell. Inventories evaporated and suppliers were reluctant to increase production during what was to be a slow recovery in manufacturing in a U.S. economy that entered recession in February. But demand for durable goods picked up in late summer and accelerated in the fall even as Covid-19 infections reached record levels.
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