When it comes to supply chain disruption, Oregon fares better than other states in the country. According to the Oregon Office of Economic Analysis
, "[Oregon's] manufacturers rely on imported intermediate goods less than most other states. This is largely because we rely more on local sourcing for wood products and food, and our largest valued-added comes from locally grown ingots that turn into silicon wafers and the like. Additionally, the movement of freight — the value of shipments relative to the size of the economy — is relatively smaller in Oregon than in many other states. That means the supply chain problems disrupt a somewhat smaller slice of the regional economy than is the case in the Midwest, for example."
Although the disruption is hitting Oregon's economy to a lesser extent than the rest of the country, there are a few ways that would alleviate the long-term issue:
- More workers return to their jobs. More employees would mean higher production and goods movement, allowing companies to meet the growing consumer demands.
- Increase productive capacity to meet demand which will boost economic growth, increase supply, and slow inflation.
- The consumer shifts to services over goods, either from an interest in services as the pandemic wanes or a decrease in purchasing goods sold at higher prices.
As the article suggests, one solution is the return to work as the pandemic improves. According to the State of Oregon Employment Department, job vacancies have risen 130% at the end of the second quarter, and the unemployment rate continually declines for the 3rd straight quarter. The need for more Oregonians to engage in the workforce is stronger than ever.
Insights from our brokers:
"Any client I have trying to hire right now is finding it very difficult. Some are resorting to texting friends and family for any leads and trying unconventional routes for recruiting. The theme on the flip side is that recruiters are seeing most applicants are unqualified and lack relevant job experience. The shortage of delivery truck drivers and long haulers are some of the biggest issues domestically." – Joe Kappler
"Many of my clients say they have difficulty hiring employees, especially manufacturing companies that need to have employees on-site to perform their job duties. Supply chain disruptions are especially acute in the construction sector. Lead times on materials have doubled and even tripled for many components. Jobs have to pause while they await delivery of materials adding material costs to a project. Labor shortages are also disruptive to construction projects. These two factors have caused the cost of new construction to rise far above other measures of inflation and have kept many projects on hold." – Stu Peterson
"Port closures/stack-ups have increased lead times for international product and material shipments significantly. As a result, most clients are adding a 3-4 month buffer on items that must be sourced internationally. In particular, prominent manufacturing locations like China and Vietnam have closed due to COVID with little or no notice. The impact of that has a long horizon; workers go to other parts of the country, and while some of the machines can run continuously, it isn't as simple as just 'turning them back on.' Domestic supply has gotten a bit slower and more expensive due to trucking and logistics constraints but isn't causing near the headache that international supply is. Most clients are offering higher wages for both salaried employees and hourly workers." – Clayton Madey