4 Shortages Predicted To Persist In 2022
Whenever the calendar turns from December to January, predictions are as plentiful as resolutions; it seems like everyone has them. While no one knows what the future holds, when it comes to the economy, the prognosticators are largely in agreement: Supply chain disruptions will continue well into 2022.
Here are a few materials that experts suspect will be difficult to come by over the next 12 months. Something they all have in common is being in high demand:
Aluminum is one of the most abundant elements on the earth, but producers have been unable to churn out as much of it. Due to rising prices for natural gas — which is leveraged in production — as well as attempts to curb carbon emissions in several countries, output has diminished. Paired with rising demand, aluminum availability has slipped sharply around the world. As Supply Chain Dive reported, the Ball Corporation recently announced its intentions to build a massive packaging plant in Nevada to increase capacity. But the project is far from shovel-ready, with development unlikely to start until late 2022.
Semiconductors shortages have been a persistent pain point for businesses.Semiconductors shortages have been a persistent pain point for businesses.
What aluminum is to the earth, semiconductors are to products in general; they're found in an incredible variety of machines, appliances, toys and more. And because they're so ubiquitous, organizations that rely on them to complete their own manufacturing processes have failed to reach their revenue goals.
Developers are investing in ways to ramp up output, but similar to the aluminum industry, the intensity of demand will prevent producers from catching up any time soon.
"We expect shortages and supply chain issues to remain front and center for the first half of the year," warned Deloitte in a report on semiconductor availability. Researchers for the consulting firm noted that there is an outside chance for supply levels to improve, but if that happens, it won't be until the first part of 2023 at the earliest.
While many parts of the country produce clothing, Asia is the runaway leader, especially countries like China, Bangladesh and Vietnam. Southeast Asia has experienced some of the worst fallout from COVID-19. The high transmissibility of the coronavirus has led to staffing shortages for major brands like Nike, Columbia and Lululemon, according to CBS News. Because of this, these organizations may lose a considerable amount of money in terms of sales. Indeed, according to projections from Kearney, earnings losses for U.S.-based apparel firms could range between $9 billion and $17 billion in 2022.
A core building block of plastics is resin, but for almost the entirety of 2021, this raw material has been in short supply, something the Institute for Supply Management has chronicled in its monthly reports. Contributing to its scarcity were a series of storms that swept through Texas in 2020, one of the nation's leading producers.
As Supply Chain Dive points out, some manufacturers have been successful with inventory management, but escalating expenses and tariffs will likely temper availability this year.