Baking & Snack - November 2021 - 8

editorial
Reset and rebuild
A
A growing economy with a contracted pipeline: that's how
Scott Colbert, executive vice president, director of fixed income
and chief economist at The Commerce Trust Co., described
the current economic environment during Sosland
Publishing Co.'s Purchasing Seminar late last month. Despite
the crunch many bakers feel today, Mr. Colbert's outlook
for the economy was optimistic. So far, all signs point to the
pandemic receding. Fiscal stimulus from the government is
still fueling growth. And we're seeing incredible pent-up demand
for just about everything.
The supply chain contraction, however, is real and challenging
business and contributing to inflation, Mr. Colbert
explained. Unemployment, a typical marker for a growing
economy, is declining, but businesses struggle to find
workers, especially for blue collar positions. That's because
there are 5 million fewer people in the workforce compared
to pre-pandemic levels. Where did they all go? Mr. Colbert
pointed to early retirements and, yes, unemployment benefits
causing some of that contraction. But he was quick
to note that those benefits are no longer on the table.
One group he cited that I rarely hear discussed
was women. The pandemic overwhelmingly impacted
women's ability to work outside of the
home as the bulk of child care often falls on their
shoulders. Even though many schools have returned
to in-person learning, the child care infrastructure
has been decimated by the pandemic.
Without a robust child care infrastructure, I'm concerned
this demographic will struggle to go back to
work in a significant way.
Labor is also one of the major hindrances to the transportation
issues we're experiencing. While transportation
rates will eventually come down from their current highs,
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Contributing Editors:
EDITORIAL
Charlotte Atchley
Dan Malovany
Keith Moore
Michelle Smith
Taryn Parker
Donna Berry
Beth Day
Laurie Gorton
they will not be returning to pre-pandemic lows, warned
Jim Ritchie, president and chief executive officer, Redstone
Logistics, in his seminar presentation. The transportation
industry is experiencing a reset, he said, with truck drivers
finally getting wage increases they've long deserved. Factor
in congestion and backlogs, and you have the current transportation
situation.
Both Mr. Colbert and Mr. Ritchie anticipated that, yes,
there will be an end to these challenges. Eventually, the supply
chain pipeline will expand to accommodate the new
economic growth, and demand will ease. And Mr. Ritchie
said that while manufacturing and transportation are still
recovering from the supply-and-demand challenges of the
pandemic, one day there will be a surplus of goods, and
transportation will tip back in favor of the shipper. The question
is, " When? "
Mr. Ritchie anticipated transportation would not fully
recover until 2023. Mr. Colbert insisted that the challenges
of inflation, supply chain and labor are transitory, but that it
will take years to shake out.
It's rough out there. You'll read about some challenges that
probably mirror your own in this issue. But even though the
struggle right now is very real, consumer demand and economic
stimulus endures, and Mr. Colbert anticipates these
forces will extend the economic expansion for quite a while.
" We still have such a tailwind. We're going to make amazing
forward progress for quite some time, " he said. " We have
a long runway of economic expansion to go if history is any
measure. ... From an economic perspective, a global perspective,
your company's perspective, there's a lot of growth
available. "
- Charlotte Atchley, Editor
catchley@sosland.com
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Baking & Snack - November 2021

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