Market Commentary

Supply Chain

Supply Chain

The world is still struggling with supply chain disruptions as factory orders for June in the U.S. rose by 1.5% versus last month’s 2.3%. There have been massive floods in the Hunan province in China and in Western Europe. In China, rail lines have been severely damaged and supplies of raw materials destroyed.

Since economies began to recover supply chains have been under tremendous strain trying to keep up with demand. It is not easy to restart the worldwide industrial complex after it had been completely halted.  Adding to the problem is the years of ‘just in time’ manufacturing processes Manufacturers carry very little supply of materials relying instead on a steady, just in time, of supplies. When just a few items are not in time the entire line of products being made is disrupted. Multiply that problem everywhere for most of the world’s industrial complex and you can understand the magnitude of the problem.

Let’s hope economies do not have to be shut down again because of the new variants of covid.