Many of us have had our lives upended by COVID-19, but there is reason to remain optimistic. The manufacturing sector has shown steady growth, which is projected to continue over the course of the next year. December 2020 was its eighth straight month of growth; however, the increase is not as high as it could have been had COVID-19 not been a factor. Though pandemic conditions have caused issues on the supply side, end-consumer demand and spending have continued to increase, which makes manufacturers optimistic for the future.
The supply chain and manufacturing operations continue to labor under stresses imposed by pandemic restrictions. Employee shortages, personnel issues including adapting to working from home, government-mandated shutdowns and logistics issues are straining many industries. Trucking capacity is currently tight and is expected to either remain or tighten further in 2021.
On the demand side, sales in many industries are steadily returning to pre-COVID levels, especially in consumer products, food and beverage, electronics and home goods. When the COVID-19 vaccine is widespread in the population, service sector spending is expected to increase, which could lead to a slowdown in durable consumer goods spending.
“The timeline for these shifts is hard to pin down, however, and the confidence level of newly vaccinated Americans is even more difficult to predict,” Christina Ryan, executive vice president at Redwood Logistics said in an article published by Material Handling & Logistics. “For now, the food and beverage, consumer goods, electronics and home goods sectors are expected to continue their ascent.”
According to Research Nester, rising demand from end-use industries will drive growth in the wood pallet sector, which carries the largest percentage of pallet sales. Wooden pallets are used more frequently for consumer goods because of their durability and reliability. Plastic pallets are expected to have the largest CGR (compound annual growth rate) as demand grows for pallets that are more resistant to biological hazards such as insects and chemicals.
The long-term impact of these economic shifts is uncertain as we continue to persevere through an unpredictable pandemic. Though issues of the past year have strained manufacturing on the supply side, a continuing increase in demand paints an optimistic picture for manufacturing industries.