A quicker-than-expected recovery in U.S. manufacturing is resulting in supply disruptions and higher costs for materials used in products meeting increased demand.
Prices for steel, aluminum, lumber and other materials are rising in response to higher order volumes. Commodity supply chains are now clogged with orders, causing some producers to add weekend hours and overtime for employees. Orders that took a week or two to fill during the summer now require six to eight weeks, according to manufacturers coping with extended wait times for essential supplies.
“The lack of availability is what kills you,” said Mark Verhein, president of Church Metal Spinning Co., a Milwaukee-based manufacturer of steel parts for large industrial engines. “If you can’t get the material, that’s vexing.”
When many factories shut down for more than a month last spring to contain the spread of the coronavirus, production of industrial commodities dropped off as well. Inventories evaporated, and suppliers were wary about ramping up production during what was expected to be a slow recovery for manufacturing in a U.S. economy that had entered into a recession in February. But demand for durable goods picked up in late summer and gained momentum during fall even as Covid-19 infections soared to record levels.