West Michigan economy showed modest gains in October
Taken as a whole it remains flat as supply chain problems remain the culprit.
Supply chain bottlenecks and worker shortages continue to be the economic theme increasing inflation stalling economic growth. There’s higher U.S. consumer demand for stuff. Understaffed ports and a lack of truck drivers is leading to container ship gridlock on and offshore.
“Some of this, of course, has taken some extreme expediting, and in other instances, they’ve had to hire hotshot carriers or other kinds of modes to get their stuff from wherever it was to here.”
Brian G. Long is director of Supply Management Research in the Seidman College of Business at Grand Valley State University.
“This is costing two to three times as much for freight as what they were paying previously. They are keeping their production line going this way, but they’re incurring additional costs by doing so.”
Long says there’s no end in sight.
“Respondents to our survey, for the first time in almost 30 years now, are building inventories that they had never built before, not because of necessarily the rising prices, although that’s an issue, they’re more concerned about availability.”
The Federal Reserve’s stance current inflation is “transitory,” but Long suggests once supply chain bottlenecks are resolved prices will, as he puts it, “reflect the recent price increases that we’ve already had.”