As we close out 2021 in what may very well be the strangest year ever for the economy, there is a very strong demand for capital projects but a lack of labor to support production and installation.

On the demand side, the US federal government has passed three stimulus programs exceeding $1 trillion each since March 2020. The extra money has supported homeowners, government, and industry alike, making it possible to purchase more hard goods.

Many people who lost their jobs early after covid hit have not returned to the workforce on the labor side. As a result, several million fewer people are employed in the workforce than before 2020. The shortage of employees has become so significant that we have entered what is being called The Great Resignation, where record numbers of people quit to get a new job.

Another trend in government and big business is that many employees work remotely. It makes emails and Zoom meetings more important but in-person meetings less common. But a problem starting to be recognized with remote work is that work productivity tends to decline over time, and innovation slows. Understanding the nature of this new remote work environment can create great opportunities for the savvy distributor.

The impact to the compressor industry is that prices are higher, many product orders are back-ordered, installations often end up delayed, and customers need more handholding. The imbalances in the system are something most of us have never lived through. As an owner/operator or manager of a distributor, it is a great time to figure out how a situation should be explained to an end customer. While the extra chaos in business might be stressful, it is much easier if the customer can talk to a person rather than have nowhere to vent.

Bruce McFee
President & CEO
Sullivan-Palatek, Inc.