Let me first explain what happened to the US and world economy due to the pandemic. I will start with the Supply Chain problem and hopefully you will ask again so I can go to other areas of the economy and explain the effect of covid and affecting vaccines once it is widely distributed.
Supply Chains have deteriorated since March. This is due to the general manufacturers not getting the components for their main product like the equipment they make using the components made of the material. This is a common situation for most manufacturing companies that manufacture vehicles, heavy equipment, electrical equipment, household appliances, robots, etc.
Component manufacturers are primarily small businesses here in the US and around the world. These companies produce parts that go to the above mentioned larger manufactured products.
Small business manufacturers are affected in many ways:
They do not get the raw materials or parts needed to make the ingredient to sell to the big manufacturers who usually buy their ingredients.
Many are locked down and unable to do everything OR work on a limited scale with longer lead times for supplies, materials, and parts, delaying their labor.
Many small businesses continue to hold tight cash and any disruption to their cashflow can be seriously detrimental and have a domino effect.
Major US manufacturers are affected because their component manufacturers are locked down, or limited scale production. This has stalled payments to component manufacturers that are causing serious cash flow problems.
The component manufacturers sell to US manufacturers from anywhere in the world. So this was not just a problem in the US then and a global problem.
The situation is exacerbated by the increase in sick employees who are unable to work and the government's heavy restrictions on small businesses.
Therefore many US manufacturers lack components, forcing to delay the delivery of ordered parts for tractors, bulldozers, office equipment, computers, electrical appliances, you name it and almost everything manufacturers are talking about this problem that the news never mentioned.
The net result is that large corporate manufacturers expect lower profits because they do not fill the backlog of orders.
The added delay due to import is limited or stalled, ships at sea full of cargo can not off load. There is a lot going on that investors need to understand in order to actually make wise and prudent decisions.
The good news is there are vaccines coming out faster than ever in the history of any previous pandemic. It is truly amazing and it is universal.
The sheer number of ICUs, hospitals, health care providers, etc. is detrimental to the economy. Once the system begins to correct vaccines that reduce the number of people in hospital beds and sick workers who return to work, as well as the locks down removed, supply chains will begin to recover.
We have all witnessed the shortages of toilet paper and paper products, meat products, and cleaning supplies, etc. Etc. Supply chains that were affected first and were very difficult due to pulling and panic in some cases are also working close to normal.
It is a fantastic work of all paper product manufacturers, food manufacturers and food distributors, grocery stores, and the food services industry.
As vaccines are distributed, people can return to work, people will celebrate together again, the backlog of orders for washing machines, ovens, dishwashers, household items, home improvement products, computer, printer, etc. . When there is a certain level of safety in the herd it will be a sudden surge of manufacturing ability and close to full capacity.
There is a back log of orders for many manufacturers, there is a need to form. This means that with the safety of the flock, there may be a faster increase in production as long as the manufacturers are ready, willing, and capable. Small business manufacturers must survive. They need the SBA to provide ways to survive so that by the end of this dark tunnel, small businesses can quickly boost their component manufacturing facilities that allow larger corporations to make car, computer, flat screen TV, or what can quickly react and decisively meet the depleted needs.
Vaccines are coming out fast and everywhere in the world is something to celebrate the holiday season. You may not be able to visit family or friends this year in person. Maybe you are sick of masks, maybe you are disappointed because you are worried about whether you will have a job or not. But what you should entertain is the amazing efforts of the worldwide health care industry, the efforts of scientists, doctors, and researchers who spend countless hours working for the good of humanity.
It is the worst pandemic the world has ever experienced in over 100 years. Some want to pretend that this is not true, and that is what some understand. But most importantly, global scientists, researchers, programmers with machine learning and experts in AI and health care are finding a solution to this horrific event.
We should all be thankful that vaccines come out. We may have another year of social isolation and masks, and hospitals overflowing with patients, but with an end. We can see that we will win this war. And like all wars that end, the celebration, economic growth and development, and new technologies will create a huge opportunity for global economic expansion.