![]() You could also make the argument we’ve had a shortage of financial assets for years now. and others soon reduced output of vehicles from big pickups to compact sedans.Īuto executives think these supply chain issues could last well into next year. Audi, citing a chip shortage, furloughed 10,000 factory workers for the first time since the spring lockdowns. In December, the parts flow from Continental, Robert Bosch GmbH and other suppliers had so dried up that VW announced it would stop production of bestselling brands such as Audi and its namesake VW brand at plants in Europe, China and North America. Other car makers were getting similar alerts from suppliers. The supplier said it wouldn’t deliver a range of core components VW needed because of a global semiconductor shortage, said people familiar with the call. 12 Skype call between VW’s logistics head and officials at car-parts supplier Continental AG. Demand was rebounding from pandemic lows, and their factories were humming again. were upbeat about the industry’s recovery in early fall. Then there is a semiconductor shortage which is slowing the production of automobiles (also via the WSJ):Įxecutives at auto makers like Volkswagen AG and General Motors Co. The surplus of standing pine is such that growers, foresters and mill executives expect that even with mills sawing at capacity and new facilities coming online, it could be another decade, maybe two, before enough trees are felled to balance supply with demand. The housing shortage is also showing up in lumber prices, which have spiked to their highest levels ever:Īccording to the Wall Street Journal, it could take years until supply and demand are back in equilibrium: You can see this play out in big cities across the country: ![]() There are lots of steps along the “property ladder,” as Professor Keys put it, that are hard to imagine people taking mid-pandemic: Who would move into an assisted living facility or nursing home right now (freeing up a longtime family home)? Who would commit to a “forever home” (freeing up their starter house) when it’s unclear what remote work will look like in six months? The New York Times speculates the pandemic had a lot to do with this lack of supply: The housing market remains scalding hot, not only because millennials are coming out in force to buy homes, but because supply is constrained. I’ve heard similar stories from people buying appliances throughout the pandemic. We ordered a new rack for our dishwasher in November. So now there’s a supply problem and companies are scrambling to meet demand. But demand came back much faster than anyone anticipated because people were bored and fiscal stimulus righted the economy in a hurry. And companies pulled back their production because demand typically wanes coming out of a recession. Supply chains for many products more or less stopped in March and April of 2020 from the shutdowns. And the problem is not necessarily just demand but a lack of supply. The severe, yet brief, recession we experienced because of the pandemic is causing shortages like this in all sorts of places. Instead, we’ve had inflation in wait times and Peloton will pick up the tab by investing in their infrastructure to speed things up. Yes, their stationary bikes are already fairly pricey, but I’m guessing many people would pay extra if they knew it would get there sooner. It’s interesting to think about this from a purely economic perspective. ![]() To fix this bottleneck, Peloton is spending $100 million to invest in their supply chain to speed up delivery times. Demand has been so strong average wait times are now 8-10 weeks, sometimes longer. Somehow we lucked out and got ours shipped in 2 weeks or so. I never would have considered buying one before the pandemic, but Covid forced my hand. It’s pretty tough to go running outside in the Michigan winters and I have 3 young kids at home so I liked the idea of a Peloton for cardio purposes. When the pandemic began and the gyms shutdown I scrambled to outfit my home gym like so many others.
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