FORECAST 2022
never been so many open positions across every industry and government, but the need for more workers is especially acute in manufacturing, transportation, educational services, healthcare, and leisure and hospitality.” The reasons for the scarcity are diverse. “There has been
a significant drop off in labor force participation as folks were forced into retirement or are staying home to deal with childcare or other dependent care issues that are more difficult to handle in the current environment,” says Hoyt. Some fear the risk of workplace infections. Others are not finding exactly the job they want. And many pandemic- shocked people are reassessing their life missions and pursuing new ventures. A number of factors may help relieve the labor crisis in 2022. These include the end of bonus unemployment
insurance, a
declining effect from stimulus payments, an abatement of infec- tions, and a return to in-person schooling.
Supply Chains The tight labor market is helping fuel another business head-
ache: a global breakdown in the efficient distribution of goods. “Most of the time the root cause of supply chain disruption is a lack of sufficient workers,” says Conerly. When people aren’t available to do the work, efficient production and transportation fall by the wayside. Cargo ships are piling up at ports, causing delivery delays and leading to widespread price increases for supplies. The supply chain imbroglio has engaged a broad spectrum of
industries. “Close to 95 percent of our members are experienc- ing supply chain issues,” says Megan Tanel, senior vice presi- dent of the construction sector for the Association of Equipment Manufacturers (AEM). “More than half say the issues are getting worse. There are transportation bottlenecks, materials and com- ponent shortages. For the vast majority of our members, these issues are both domestic and global. And they are causing huge constraints on production.” The increased costs resulting from order backlogs and
delivery delays are only exacerbated by the China tariffs. While businesses were expecting some relief from the Biden adminis- tration, so far there has been no move to change the status quo. “Tariffs on Chinese goods will likely continue,” says Conerly. “In fact, given the friction between the U.S. and China, it’s possible we could even get additional ones.” The double whammy of supply chain disruption and China
tariffs are causing some businesses to look at alternative region- al or local sources. “Many businesses are no longer relying on any single supplier or global region for goods and services,” says John Manzella, a consultant on global business and economic trends in East Amherst, N.Y. “They are building more diversified and reliable supply chains. Instead of buying in scale from two very large Chinese suppliers, they might buy in smaller incre- ments from a half dozen suppliers located in different regions of
14 Self-Storage NOW!
The Year Ahead As businesses enter the early months of 2022, economists suggest
watching a number of leading indicators for an idea of how the year will go. The first is the state of consumer confidence—a vital driver of the nation’s economy. Given favorable wages and income trends, one might expect that
consumers are feeling fairly good. In the closing months of 2021, though, the attitude of the American public was surprisingly unsettled. “It really is difficult to get a good sense of consumer confidence in the current environment,” says Hoyt. One reason, of course, is the unclear path of the pandemic. But another is the recent spike in fuel and other prices, sparking fears of inflation. How the public reacts to the shape-shifting virus should be more
apparent in the opening months of 2022. So should changes in the currency’s purchasing power. “Inflation will be the key financial statistic to follow early in the year,” says Yaros. Moody’s Analytics calls for the Core PCE Price Index (month-to-month inflation) to moderate to 2.3 percent in the fourth quarter of 2022 as supply-chain bottlenecks and labor shortages ease. The Core PCE Price Index excludes energy and food prices and is the Federal Reserve’s preferred measure of inflation. Businesses should watch for any higher levels of persistent inflation that might cause the Fed to increase interest rates—a move Moody’s Analytics does not anticipate until the fourth quarter of 2022. Yet another leading indicator will be the return-to-work trend. “More
people getting back on the job would confirm a strong 2022,” says Conerly. “Are employers getting the workers they need? Are people earning more money to spend?” Finally, a nonfinancial force may be more important than anything
else. “The damage done by the Delta variant has taught us that the pandemic is still alive and has the potential to disrupt economic activ- ity,” says Hoyt. “Early in 2022, the leading data will be about COVID-19. What are the trends in vaccination rates? Infections? Hospitalizations? Deaths?” Favorable answers bode well for a robust year.
New York-based freelancer Phillip M. Perry negotiates win-win deals with his clients everywhere.
FIRST QUARTER 2022
the world. They may also utilize more long-term warehousing facilities. This strategy, which adds costs but reduces risk, will be extremely beneficial in protecting against the next pandemic, black swan, or trade war.” Finding alternative sources, though, can be easier said than done.
A number of factors may help relieve the labor crisis in 2022.
“Many businesses that would like to source domestically can’t find any vendor in the United States that can match Chinese prices,” says Conerly. “And Chinese compa- nies have improved the quality of their goods significantly.” Adding to this litany of woes is the Chinese government’s increasingly
heavy-handed control of industry, says Palisin. “Some of our members are asking, ‘If we have a critical supplier in China, how likely is it that the government will step in and intervene in that company, which could impact us getting access to our components?’”
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38
