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Consumers have been waiting months for their new stoves and refrigerators to arrive, and the situation won’t get better anytime soon.
Producers are scrambling to clear backlogs and meet unprecedented demand created by the COVID-19 pandemic, which spurred consumers to upgrade homes where they were spending more time and replace appliances that conked out prematurely from more frequent use.
At the same time, manufacturers still haven’t recovered from factory shutdowns, parts shortfalls and labor shortages, according to economists, developers and retailers.
When will the shortages end?
“That is the million dollar question, for sure,” said Steve Svopa, a senior vice president at Minto Communities, which is building a small city in western Palm Beach County. “I don’t know you can look into the crystal ball” and come up with a forecast.
“We are seeing lumber prices are starting to come down,” he said. “Most of the builders are limiting their sales. All of that is going to eventually help the supply chain, but it’s hard to tell. They’re still working through a huge backlog of [home building] orders. We’re still in the battle zone of trying to get through the houses.”
Some experts now concede that this year’s holiday season might be the time when things finally change.
“That’s probably a good assumption I would think,” Svopa said. “It changes daily. What I don’t know is when all of these parts and pieces we are relying on in other countries — that’s the part that’s hard to tell.”
The appliance shortfall is part of a bigger picture that initially left consumers staring at empty shelves as they tried to buy food and toilet paper. Shortages now are stretching to materials needed as people return to normal life: lumber, cars, gasoline, computer chips, even chlorine for swimming pools.
The surge in demand is pushing prices upward. The government reported this month that core inflation, which does not include the price of gasoline and food, rose 0.7% in May after a 0.9% increase in April and a 3.8% increase annually. The annual figure represented the sharpest hike in nearly three decades.
In a recent national survey of 320 builders conducted by the National Association of Home Builders in Washington, D.C., 95% of respondents reported shortages in the appliances they need to complete their residential projects — slightly worse than shortages for framing lumber (94%), windows and doors (87%) and copper wire (77%).
“Between weather effects, short-term supply side bottleneck issues and structural issues … building materials are in short supply and deliveries are unpredictable,” said Robert Dietz, the association’s chief economist.
The appliance shortage puts consumers in competition with homebuilders, who need appliances in bulk to meet rising demand for new homes, as well as contractors trying to complete remodeling jobs.
Svopa, of Minto Communities, acknowledged that he has been going to Lowe’s and Home Depot in search of appliances for the homes his company builds.
“When [the pandemic] first started, the big global manufacturing shutdowns caused delays,” he said. “We all expected a dip in demand. Although we saw a brief dip of maybe 30 days, after that demand surged and it caught everybody by surprise.”
“What I’m seeing now is they’re having problems getting parts and supplies — microchips and components that go in appliances that they’re having trouble getting,” he said.
Much of the problem can be traced to a “just-in-time” manufacturing system that calls for the production of goods that customers want, when they want it and in the numbers they seek without delay. The system does not allow businesses to store large appliances until the day when someone eventually decides to buy them.
When the pandemic hit, consumer demand plunged and factories shut down, only to see demand unexpectedly snap back to life in the middle of last year.
“For 30 days it slowed down and then it became quite busy and stayed that way until this day,” said Michael Perlman, CEO of South Florida-based BrandsMart USA.
BrandsMart, he said, has been able to keep up with demand better than other retailers because “we tend to run heavy with inventory.”
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“Where we are now is we’ve got a decent amount of inventory and we have shortages and pockets in some places,” he said.
Overall, inventories “are better now than they have been in a year,” but “it’s nowhere near optimal.”
“Different products come available on different days, and we do try to advise [customers],” he said. “One of the fallouts is there will be less selection when this is all done.”
A Home Depot spokeswoman said the company does not break out its sales and inventory trends by state or region and referred a reporter to the manufacturers about appliances.
Best Buy, Lowe’s and Walmart did not respond to requests for comment.
Perlman counsels patience, especially for special-order appliances, which can take up to a couple months to buy.