Container trucks , ships and cranes are shown at the Port of Long Beach as supply chain problem continue from Long Beach, California, U.S. November 22, 2021. REUTERS/Mike Blake
Jan 28 (Reuters) – Stephen Bullock eight months ago gave up on the idea of buying raw materials and parts only shortly before they were needed on his assembly line.
Instead, he told his purchasing manager to “just buy everything you can,” and they could store the excess, said Bullock, chief executive of Power Curbers Companies, a maker of heavy equipment used to build concrete sidewalks and other infrastructure projects.
Roughly two years into a pandemic that has snarled supply chains across the globe, U.S. companies are scrambling not just to produce enough to feed current demand – but to also refill inventory shelves. That buildup was key to the fourth quarter’s hefty 6.9% annualized growth in gross domestic product, with inventory investment contributing 4.9 percentage points, according to the U.S. Commerce Department.
Spending shifted during the pandemic from services to goods, a boom that has strained supply chains and emptied warehouses. Excluding inventories, GDP grew at a more modest 1.9% rate in the latest period.
This boom in demand, coupled with shortages, has fueled a wave of inflation that increased at a pace last year not seen in nearly 40 years. This set the stage for the Federal Reserve to now look towards raising interest rates in March.
Bullock, whose company is based in Salisbury, North Carolina, said supply chain problems have continued to grow worse in recent months – not better.
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