Increased demand causes shortages of goods

Bay Area

SAN FRANCISCO, Calif. (KRON) — There’s been an increase in just about everything from meat to cars to consumer good — and that’s leading to shortages.

If you’ve been out car shopping and found prices high and inventory low — you’re in good company.

“Typically dealers have two to three months of vehicles available, right now they have less than one month,” Auto industry analyst Nick Woolard said.

This shortage of cars is due to the shortage of computer chips that run them. When COVID-19 locked down production, automakers cut back on their orders.

“Chip manufacturers pivoted a lot of that production to other industries and now automakers are coming back, they are finding there are not enough chips to meet demand,” Woolard said.

There’s also not enough lumber to meet the demand for new and remodeled homes.

“The cost of lumber has gone up enormously lately and that is due to demand, a lot of home improvement going on and one concern is that’s impacting the ability in this region and the state to build as much as we need to as quickly as we need to,” Sean Randolph with the Bay Area Council Economic Institute said.

“The amount of shortages we are seeing now is not too surprising,” Robert Chapman said.

San Jose University Economist Robert Chapman Wood says COVID created an artificial slowdown in the supply chain.

“We have in the U.S. an efficient distribution system that delivers things to all kinds of stores and businesses and homes based on the idea that the flow of goods is going to be predictable,” Chapman Wood said. “So any time it stopped being predictable, you get shortages in part of the supply chain.”

Now with reopening underway and stimulus money in people’s pockets demand has increased and the supply chain slowdown is impacting everything from cars to food to consumer goods.

“We have had ships waiting in the Pacific Ocean because orders were made in China and there isn’t enough room to unload them in California,” Chapman Wood said.

As to how long the shortages will last, no one wants to venture a guess, but it could continue through the summer.

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