The pandemic was the big story last year, and there’s some speculation that this year’s big story will be cost increases because of it. Doesn’t it feel like whenever we finally seem to be getting close to talking about something other than the pandemic, we get hit with yet another new ripple effect from it?
In this case, the cause mostly seems to be due to last year’s shutdown or slowdown of manufacturing overall. While consumers were stuck at home kicking off a surge in e-commerce, the demand was met because supply chains that might normally have been going toward manufacturing shifted to accommodate. Plus, the supply was there because the increase in consumer demand at least partly took up the slack in demand from industry. But with the rollout of vaccines and an easing of restrictions, manufacturing in previously slowed industries, like automotive, began returning. However, consumer demand was still there.