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A new wave of widespread shortages is ravaging the United States due to a catastrophic global supply chain breakdown, which has disrupted the manufacture and transportation of several products and threatens to send prices to unprecedented highs. Chip shortages are halting the production of phones, home appliances, video games, and even forcing entire auto plants to shut down, leading to billions in losses for numerous companies. Moreover, a shortage of building materials is not only crippling the construction of new homes but also adding thousands of dollars to the cost of new housing units. And even though the Suez Canal has finally been cleared, the recent blockage triggered shortages of a wide range of essentials, and those are likely to persist for months.
From oil to natural gas, coffee to canned goods, shelf-stable food to frozen vegetables and other staples; aluminum, furniture, and even toilet paper – there’s a dramatic lack of supply, but consumers are still frantically seeking such items. For that reason, experts are worried that soon we might witness another panic-buying frenzy, as Americans run to the stores to stock up on goods they saw being wiped out from grocery shelves during previous rounds of supply shocks, while stores remain woefully unprepared to deal with the growing demand. And that’s what we’re going to investigate in this video.
A global shortage of semiconductors is provoking a lag in the production of TVs, mobile phones, game consoles, and even cars. Consumers are facing sharp price rises and shortages of multiple electronics, and industry specialists are warning that the enormous surge in demand is making this situation reach a crisis point. More alarmingly, the auto industry, which is still struggling to bounce back from last year’s government-mandated shutdowns, is now being forced to cut production and some automakers are closing entire plants due to the shortage of chips. The biggest problem is that such chips are used to control everything from powertrains to digital safety systems. Modern cars typically use 100 or more microprocessors, which makes the industry particularly vulnerable to supply disruptions.
Furthermore, if you were planning to build or repair a house, you probably won’t find the materials you need in the stores, especially lumber, considering that many producing plants and manufacturers aren’t up to full capacity, and a lot of material isn’t making to store supplies anymore. Lumber shortages have driven prices up by 70% and added roughly 25,000 dollars to the cost of a new housing unit. Additionally, flat steel form ties, a small piece of metal that ties together aluminum panels that make the walls, allowing builders to pour concrete in between, is experiencing a drastic decline in supply due to a number of determinants. Such supplies could drop to zero over the next few weeks.
On top of that, shortages of cabinets, appliances and vinyl to extrude windows are also being registered as copper prices skyrocketed 80% this year. The blockage of the Suez Canal will also add to the list of problems builders have been experiencing in 2021. Although the immense cargo ship has finally been refloated, the disruptions caused are forecasted to exacerbate months-long problems in the global supply chain, also triggering shortages of products such as toilet paper, coffee, and furniture all over the country.
American consumers should brace for radical price increases in the pumps, as the accident caused shipments of oil and natural gas from the Mideast to Europe to spark higher prices of nudge crude and gasoline. By the way, do you remember how last year’s panic-buying frenzy caused a disastrous shortage of toilet paper, cleaning products, food staples, and a wide range of essentials? Well, prepare yourself, because another wave of shortages is coming up, and it might get incredibly hard to find toilet paper again.
Experts are worried that all of the mentioned international shipping issues could bring a return of hoarding, especially amongst items that have already been scarce throughout the past year. Shortages of shelf-stable items, such as canned foods, dried pasta, beans, as well as food staples, such as eggs, bread and milk, and a variety of frozen vegetables are very likely to occur again this year, since manufacturers are still trying to catch up from the massive and unexpected demand in 2020 and stores’ stockpiles have been running dangerously low.
When we think things can’t get more chaotic, all odds conspire to an even greater chaos. So get ready for another catastrophic wave of shortages and don’t forget to turn on the notification bell to stay current to the next developments of this calamitous crisis, here, on Epic Economist.
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