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For Americans factories, business is good these days. Almost too good.
Unexpectedly strong demand for furniture, appliances and other manufactured goods is providing a windfall to many of the country’s industries.
But as factory gears spin faster to meet the surging demand, a big headache is emerging: Supply chains are getting stretched more than ever, and critical components are proving a lot harder to procure.
Take the word of Drew Greenblatt, the president of Marlin Steel in Baltimore.
“The economy is a snapping back in a big way,” says Greenblatt.
But as Greenblatt races to hire new workers and expand his factory, frustration is starting to mount.
Hinges that used to arrive from his supplier in a day or two now take three weeks. Steel he uses to make pail handles is back-ordered for months.
“Last month, we would have shipped 25% more if we had not had these shortages,” Greenblatt said. “We’re banging our head against the wall because if we accept an order today for these pail handles, we can’t ship until July. It’s madness.”
The boom in demand for manufactured goods is being fed by a surge in consumer demand from households that have held up well during the pandemic.
Consumer spending on goods rose nearly 6% in January, even as spending on services was up less than 1%.
But that robust consumption caught many factories by surprise, and they’re now struggling to catch up.
Nicole Wolter’s company makes packaging equipment used by food processors. Early in the pandemic, her customers were reluctant to buy new machines. Now, they can hardly wait.
“It’s like, ‘I need things yesterday,'” Wolter said, quoting her customers. “Hot, hot, hot, now, now, now. Can you do more overtime? What can we do to make it happen?'”
Wolter’s employees are working overtime. She’s also scrambling to find aluminum supplies and even things as basic as wooden pallets. Prices are going up and products she used to promise in six weeks now take twice that long to…
Go to the news source: Factories Are Thriving But Finding Key Parts Is Just ‘A Mess’ : NPR