COVID

The COVID-related product shortages that just won’t go away.

Phillip Nones Business, Economics, Manufacturing, Sales, Social Media, Uncategorized , , , , ,
(Photo: CNS)

This past February I ordered an 18,000 BTU window air conditioning unit through the local GE dealer in the town where I live. It’s the largest such window unit you can buy, and there aren’t very many alternative options available from competitors.

Not surprisingly, the particular unit I ordered is manufactured in China (I am not aware of any similar models that are made in the United States). At the time I placed my order, I was informed that due to COVID-related disruptions of global deliveries, the earliest I could expect my unit to be received and installed was in April.

I wasn’t very surprised at this news, and figured that the delay would be perfectly fine for getting the AC unit installed and working in our home before the onset of the notoriously hot and humid summer months where we live here on Maryland’s Eastern Shore.

Since then, we’ve had several more pushbacks in the anticipated product delivery – first June … then August. And now the latest schedule I’m being told is for an October delivery – and even that date is “iffy.”

I think my situation isn’t unusual in these COVID-crazy times. Considering that the pandemic began towards the end of 2020, we are now 20 months later and the ripple effects are still being felt all throughout the global movement of products.

In fact, the recent coronavirus outbreaks that have occurred in Chinese port cities just this past month have caused even greater shipping delays than what had been encountered during 2020; they’re actually the worst shipping delays seen in 20 years. It means that the impacts will likely be felt all the way to the holiday shopping season at the end of this year — at a minimum.

As a related consequence of the COVID pandemic, the demand for shipping containers and shipping boxes has never been higher, even as some containers have been marooned on ships attempting to travel through the Suez Canal (which was shut down for a period of weeks earlier this year) as well as bottlenecks in certain port cities where labor shortages have been particularly acute.

Among the myriad of products and supplies that have been seriously affected are:

  • Appliances
  • Batteries
  • Food products
  • Furniture
  • Hospital, dental and surgical equipment/supplies
  • Measuring instruments
  • Plastic materials
  • Printed circuit boards
  • Semiconductor processing equipment

… and these are just some of the most notable examples.

With the Delta variant apparently causing a COVID-pandemic redux, it’s pretty impossible to gauge just how long it will take to work through the product shortages that have with us for so long already.

But what’s quite clear is that all of the initial estimates were woefully off the mark … so why would we expect anything different now?

What sort of product shortages have you experienced in the past few months, “thanks” to COVID – either in your business or at home?  Please share your experiences (surprisingly good or unsurprisingly bad) with other readers here.

The predictable — and unexpected — economic consequences of COVID.

Phillip Nones Economics, Government, Manufacturing , , , , ,

As the United States emerges from the COVID crisis, the shape of the American economy is coming into clearer view.  Part of that picture is the growing realization that lockdown policies, vaccination rollouts and government stimulus actions have created imbalances in many sectors — imbalances that will time to return to equilibrium.

Everyone knows the business sectors that have been hammered “thanks” to COVID:  hospitality and foodservice, travel and tourism, the performing arts, sports and recreation, commercial real estate. 

At the same time, other corners of the economy have blossomed — home remodeling, consumer electronics … and the public sector.  This last one isn’t a function of any kind of increased demand, but rather pandemic-long guaranteed continuing income to workers on the public payroll.

As we emerge, factories and the building trades are finding it difficult to ramp up their operations to meet growing demand, hampered in part by supply chain issues and shortages of raw materials and parts sourced from offshore suppliers.  As of now, most economists believe that such shortages won’t turn out to be long-term problems — but we shall see over time if this is actually the case.

Another imbalance is what’s been happening to the labor force.  Government stimulus checks and unemployment benefits have been sufficiently robust so as to depress the number of workers seeking a return to employment in certain sectors — particularly in the service industries.  As just one example, restaurants everywhere are finding it more than a little difficult to staff their reopened locations.

The latest forecasts are for the U.S. economy to grow at a blistering pace during the balance of 2021 — perhaps as high as an 8% or 9% seasonally adjusted rate of growth.  That would be historic.  But not everyone is going to benefit.

In a recent Wall Street Journal article, David Lefkowitz of UBS Global Wealth Management points out that “the very sudden stop to the economy and then the very quick restart has created a lot of havoc — a lot of businesses have gotten caught flat-footed.”  But beyond this is the very real likelihood that inflation will emerge as a key factor in the economy, for the first time in more than 40 years. 

Viewed holistically, the situation in which we find ourselves is one where many new and unusual “ingredients” have gone into the economy over the past year, resulting in an economic brew that is just as unusual — and perhaps even unique in our history. 

An artificially depressed economy due to government fiat … followed by massive economic stimulus paid for by expanding the money supply … coupled with sudden demand propelling certain industries over others due to government-driven dictates: for sure it’s a new mix of factors.  Considering this, I’m not at all sure that very many people inside or outside of government have a clear handle on what the next 18 months will actually bring.

But that doesn’t mean we can’t speculate about it, right?  In the comment section below, please share your perspectives on what’s in store for the U.S. economy.  I’m sure others will be interested in reading your thoughts.

Advertising’s COVID Consolidation

Phillip Nones Advertising, Business, Marketing Communications, Media, Social Media , , , , , ,

The triumvirate of Amazon, Facebook and Google surge to even bigger dominance in the field.

Fueled by their ability to target audiences by attitudinal and intentional factors in addition to demographic characteristics, the “Big Three” platforms of Facebook, Amazon and Google were already heavy hitters in the advertising realm well-before COVID-19 burst on the scene.

To wit, they accounted for nearly 50% of all advertising expenditures in the United States in 2019.

Then the coronavirus pandemic hit, resulting in changes overnight in how people work and live.  Thanks to lockdowns — and with more people than ever glued to digital platforms for everything from business communications to entertainment and online shopping — advertisers found the audience-targeting capabilities of the Big Three platform too irresistible.

So in 2020, even as every other kind of ad spending shrank – including double-digit drops seen in newspaper, TV and billboard advertising – online advertising continued to grow.  Even more significantly, the biggest gains in online advertising accrued to the Big Three tech giants rather than to digital media sites and publishers that sell online ads.

When the dust settled, 2020 turned out to be the first year the Big Three swept up more than half of all ad dollars spent in the United States, according to an analysis by ad agency GroupM. 

… And in online advertising specifically, the Big Three’s share jumped from an already dominant ~80% in 2019 to nearly 90% in 2020. Ad industry veteran Tim Armstrong (formerly in executive positions at AOL and Google), puts it succinctly:

“[The] companies that are data science-driven get stronger and faster with a tailwind of usage — and COVID was a hurricane.”

The coronavirus environment proved to be fertile ground for the Big Three even in areas previously inhospitable to them — including such categories as store promotions, catalogues and couponing.

As the nation emerges from the COVID environment in the coming months, one wonders if the newly dominant position of the Big Three will retrench in any meaningful way.  Speaking personally, I wouldn’t bet money on it.  But what are your thoughts?

Saying “goodbye and good riddance” to 2020 with a bit of humor …

Phillip Nones Social Commentary ,

The year 2020 is one that many people would just as soon see well-behind us, and I’m sure that everyone hopes that 2021 will mark a major improvement, too.

This year has also generated more than its share of gallows humor – proving yet again that “making light of misery” has its place in social discourse.

Along those lines, several friends/colleagues who live and work in Europe and Asia have shared a bit of that humor, and it definitely elicited a chuckle from me. 

So with credit to these two gents, here are “Ten Things to Ponder” as 2020 draws to a close:

  • The dumbest thing I bought this year was a 2020 planner.
  • 2019:  Stay away from negative people.  2020:  Stay away from positive people.
  • The world has turned upside down:  Old folks are sneaking out of the house and their kids are yelling at them to stay indoors.
  • This morning I saw a neighbor talking to her cat.  It was obvious she thought her cat understood her.  Back home I told the dog – we had a good laugh.
  • Every few days, try your jeans on just to make sure they fit.  Sweatpants will have you believing that all’s right with the world.
  • Does anyone know if we can take showers yet, or should we just keep washing our hands?
  • We never thought the comment “I wouldn’t touch them with a 10-ft. pole” would become a national policy …
  • I really need to practice social distancing – from the fridge.
  • I hope the weather is good tomorrow for my trip to the backyard.  I am tired of the living room.
  • Never in a million years could I have imagined I would walk up to a bank teller while wearing a mask and ask for money.

What are your “imponderables” for 2020?  Feel free to share them with other readers here.