All the Products Supply Chains Have Messed Up for You
This holiday season, the name of the game is shopping and shipping early. The rising cost of things like labor, transportation and fuel have gummed up supply chains and logistical operations across the world and the entire global economy — but some things are harder to come by than others and not all shortages are created equal.
Here’s a look at the materials and critical components behind the short supplies and high prices that defined so much of the American economy over the last year — as well as the products that are harder to find and more expensive for you to buy right now as a result.
Silicon computer chips — commonly called semiconductors or microchips — are nearly universal to the gadgets that make our world go. Everything that has a screen — and many, many electronics products that don’t — require at least one microchip to function.
Microchip production is highly complex and takes a long time to complete — about three months, from start to finish, according to Blue Ridge Technology. The vast majority of the world’s microchip production is concentrated in East Asia, where the coronavirus originated and where factories shut down first. Nearly all of the world’s chip production ground to a halt for months, but demand never fell, as so many experts predicted it would.
Chips are critical components in so many devices that in April, Goldman Sachs was able to identify 169 industries — from soap and cement production to breweries and eyeglasses manufacturing — that were suffering from the shortage.
Here are the products that the shortage messed up most for you:
- Cars, trucks and SUVs: No industry has suffered or continues to suffer more than the world’s automakers. Remote work and education sent demand for consumer electronics soaring so the chips were steered there at the expense of the auto industry. Yet demand for cars persisted. The shortage forced automakers to slow or even halt production on all but their bestselling and most profitable models. The result is bare-bones inventory that has forced limited choices and high prices on buyers all year long, particularly in the used-car market, which is not expected to recover for years.
- Consumer electronics: The move to remote work, school and shopping launched a frenzy of demand for computers, tablets and other consumer electronics. In October, CNBC reported that the shortage will continue to make things like game consoles, smartphones, TVs and wearables more expensive and harder to find for two to three years.
- Appliances: Microwaves, ovens, washing machines and refrigerators are all dead weight without microchips. They — and by extension home remodeling and real estate development — have gotten more expensive.
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Lumber and Construction Materials
The lumber crisis that drained the U.S. housing market of inventory throughout 2020 and mid-2021 contributed to a red-hot market defined by bidding wars and above-list sales.
Lumber prices peaked at $1,515 in May compared to $350-$500 before the pandemic, according to Fortune. Although the bubble finally burst and prices fell back down to Earth in August, the cost of this critical framing material is once again soaring by more than 40%.
Here’s what it means for you:
- You’ll get a whole lot less house for your money: The lumber shortage helped to cause massive, double-digit increases in the median sale prices of homes across the country, with some metro areas experiencing increases of 78%, according to the National Realtors Association. According to Zillow, the median home value is now $312,728.
- Renovations take longer and cost more: The rising cost of lumber — and construction materials, in general — has sent the price of home makeovers skyward, even if they don’t include any wood.
Apparel, Accessories and Furniture
The cost of clothing has already gone up by 5% in the U.S. this year, according to the Tallahassee Democrat, and Vogue reports that neither luxury wear nor fast fashion is immune.
Most of America’s clothing is made abroad, particularly in the East, and manufacturers and retailers alike have fallen victim to the same high shipping costs and long delays that have caused havoc across the entire economy.
But the rising price of cotton and shortages of materials like thread and ink has been especially hard on the companies that make and sell not only clothing and accessories but also furniture. Their troubles become your problem in the form of higher prices and lower selection.
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