Food products

Grocery stores may not rid themselves of empty shelves just yet, as labor constraints and challenges with the 2022 crop growing season could keep prices high and supply spotty through the rest of this year.
The fast-spreading omicron variant has upended operations at food manufacturing plants, and a rise in the number of sick workers has raised costs for businesses and limited output. Conagra, owner of Marie Callender’s and Reddi-wip, saw a rise in “omicron absenteeism” and expects disruptions last into Q3, CEO told analysts earlier this month.
Shortages of fertilizer and pesticides have also left producers warning that this year’s crop yields could be smaller. Soaring natural gas prices in Europe and curbs on exports from Russia and China is expected to keep fertilizer demand high beyond 2023, an executive with manufacturer CF Industries told analysts in November.
“It’s going to continue to get worse, it appears,” Southern Valley Fruit and Vegetable Executive Officer said during testimony in a Nov. 3 congressional hearing on food supply chain issues. “The less protection products we have, the less yields we’re gonna have.”
Plastics

A Texas ice storm and two hurricanes along the U.S. Gulf Coast walloped the chemicals supply chain last year, causing factory outages and disruptions to manufacturing that dragged on for months.
Plastic resins, the raw material used to make everything from packaging to paint, were reported to be in short supply for the 10th straight month in December, according to the Institute for Supply Management. Prices last year skyrocketed as much as 50%, according to AlixPartners.
Manufacturers have moved to stockpile more product, which is expected to ease prices and supply constraints in 2022. But increasing demand and a reinstated tax on imported resins will likely keep the market volatile.
Building materials

High materials cost and a lack of supply are lengthening lead times of construction projects and pushing contractors to use alternate materials.
Overall construction input prices are up 22.3% from a year ago, with nonresidential construction prices up 23.2%, according to the Association of Builders and Contractors. Homebuilder sentiment dropped for the first time in four months on rising inflation and material shortages, according to the National Association of Home Builders.
“The price and availability of building materials, and the supply chain in general, remains the most pressing, immediate challenge for builders as they seek to add housing supply,” said NAHB Chairman in a release.
Builders faced long lead times last year of everything from wallboard to garage doors, and shortages come as businesses plan new distribution centers and other massive capital expenditure projects to add resilience to their supply chains.
Labor constraints, high demand for construction and long lead times could prompt some companies to reassess plans, said Proxima.
“These sort of modernization programs that businesses are hanging their hats, we’re gonna we’re gonna really see who manages to push it through,” said Proxima.