What is causing the break in the supply chain?
Public and Private industries scramble as labor and supplies dwindle
CHEYENNE, Wyo. (Wyoming News Now) - When COVID-19 shut down the world, not only did people stop, but manufacturing shut down as well.
As we open up our country, the supplies we need to get working seem not to keep up the pace.
Within the private ad public sectors, the hardest-hit supplies were consumables, cement and lumber. To understand the differences, we have to look at some of the costs.
For example, in October, plywood cost 28 dollars a sheet, currently, it’s 95 to 100 dollars. Structural steel is up by 17% since January, and lumber is up 300%.
Pipes metal or plastic has doubled and concrete is at a premium, with most customers waiting for supplies since January.
Epoxies were $15 a gallon, now $60 and supplies are being rationed to customers to ensure everyone gets something. Other petroleum products like paints, plastics and resins have been hindered by the winter storm shut down in Texas, driving up costs and wait times.
Customers are also at the mercy of truck drivers, deliveries, and manufacturers who keep increasing their costs.
Some of this has to do with our global supply, as the pandemic has disrupted manufactures in other countries that still may be closed or limited in re-opening.
“It’s not so much that the supplier is increasing the cost to the contractor, it’s more the manufacturer is not honoring any kind of cost,” said Rich Bolkovatz, President of Reinman Corp.
These additional costs have been boosted by fuel increases and inflation and labor shortages just add to the pot.
“That’s been a big problem for us, so we’re trying to do more with less labor and it’s... cumbersome,” said Bolkovatz.
Federal benefits have greatly affected the minimum wage sector the most.
“Especially in lower wage occupations, and lower wage jobs, the three hundred dollars a week is a lot of money to a lot of people,” said David Bullard, Senior Economist for the Wyoming Department of Workforce Services.
But job growth has grown in neighboring states, Wyoming’s current unemployment rate is at 5.4 percent, but our neighboring states are at 3 percent or less.
“We tend to see out migration as people from Wyoming move to other states, which could exacerbate any labor supply issue that were facing here,” said Bullard
In May 2019, employment fell by 30,000 jobs in Wyoming; since May 2021, we only gained 10,000. Also, the downturn in the mineral sector has caused a loss of 6,900 jobs in 2019, only to regain 700.
As summer rolls around, June is typically the busiest hiring season, especially in the leisure, hospitality, retail, construction and business services. Still, it hasn’t been reflected in the public or private sectors.
Neighboring states like Idaho and Utah have not only gained back all their jobs lost during the pandemic, but they have added new ones.
As different countries easing restrictions and manufacturers have time to re-pace their production, we’ll start seeing more supplies trickle in this global shortage.
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