Worker shortages will moderate this summer in the states where extra unemployment aid has been canceled, prodding unemployed people to get back into the job market. In Sept. the benefits will expire everywhere else, pushing more recipients to look for work. But note that wages are likely to stay high, especially for folks at the lower end of the pay scale. Employers will have an easier time getting the labor they need, but it won’t come cheap.
Steel supply should rise in the second half of 2021, giving some relief to beleaguered buyers. Additional capacity coming on line later this year plus easing demand ought to mitigate shortages and reduce prices, after they soared earlier this year.
Semiconductors won’t improve until 2022. Suppliers are pumping them out as fast as they can, and more production capacity is coming. But it takes time to build chipmaking plants.
Not enough computer chips means not enough cars, which increasingly rely on computing power and the chips that provide it. With inventories of cars so lean…
It’ll take at least six months for auto production to catch up with demand.
Figure on more like a year for the market to return to normal. Until then, supply will be tight and prices will stay high.
With new cars scarce, prices of used ones will keep climbing, too. There aren’t many of them on the market, either. Owners are keeping cars longer.
Perhaps the most intractable category of shortages: Freight transportation. There simply aren’t enough ships, trains, planes and trucks carrying cargo fast enough to where it’s needed. High volumes and missing capacity are straining supply chains.
Expect ocean shipping delays to continue through year-end. Shortages of containers and the chassis to move them by truck are slowing shipments of goods from China to the U.S. Ports are congested. Sailings are getting canceled. None of this looks likely to improve any time soon… a huge problem for importers and exporters.
Trucking and rail…overburdened, and likely to stay that way until autumn. Rates may plateau soon, after soaring this year, and they’ll stay high into year-end.
Air freight…too few planes to carry all the goods. Already-high rates are likely to start climbing further late this summer or early this fall as preholiday demand hits. The situation won’t improve until international travel recovers, adding more space on commercial flights for cargo. That’s not likely to happen until 2022 at the earliest.
Source: The Kiplinger Letter • Vol. 98, No. 24 • Washington, June 18, 2021