With The US still struggling to overcome the impact of economic closure and inflation of the past couple of years, some businesses seem to be thriving now.
Factories Boosting Businesses
The latest business news shows that certain industries are witnessing increased demand and sales – so much that the overall weakened national economy and ever increasing inflation seems to have little effect.
Businesses that seem to be enjoying increased sales include construction equipment, heavy duty trucks, construction supplies and industrial level hardware and software.
But why these and not other industries?
Under Construction Factories
For the most part, the US industrial power was on the rise before COVID-19. The pandemic had many projects, both planned and under construction, shut down. But with things getting back on track, factories are reopening and for industrial level operations, this is good news.
Suddenly, industries like construction and heavy duty vehicles have found themselves overwhelmed by past orders that were on hold and new ones lining up.
The US construction spending in March alone jumped 0.3% on a month on month basis. For non-residential construction, the figure is much larger at 1%. This means that construction vehicle manufacturers are witnessing increased sales.
Caterpillar alone has seen its quarterly sales rise almost 17% when compared to last year. According to its Chief Executive Jim Umpleby,
“We feel good about the market conditions” … “our first-quarter results lead us to expect that 2023 will be even better than we previously anticipated.”
Semiconductor and Software Boom
It is not only the big construction industry, but business technology is also in the news.
Automation is a deeply seated aspect of any factory setup. That means computers, sensors, and other electronic equipment is again in demand. The reverberations go much ahead, with factory level software needed to run the automation.
Rockwell Automation, a Milwaukee based industrial software and automation supplier has already reported an astounding 26% increase in its sale. According to the company, as more and more factories are set up, the more their services are needed.
But their CEO Blake Moret, says that there is more to it than just that. Rising demand for electric vehicles and a declining capable workforce are two important boosts to his firm and industry.
The EV sector is one of the fastest growing areas in the United States, partially fuelled by the American shift towards a zero carbon footprint mindset of the population and the overall government policy to boost emerging techs such as clean energy, and at the same time try to suppress and eradicate sales of diesel vehicles.
Steel is The Winner
Out of all this, no matter which sector or industry is booming, the steel industry is the obvious winner. Be it factories, industrial vehicles, manufacturing equipment, EVs and even semiconductors – steel is the basic component. With all the industries booming and requiring that raw material, the US steel industry is enjoying a major demand.
Nucor, a North Carolina based steelmaker, is seeing increased sales with no end in sight. With factories and construction requiring building joists, doors, warehouse racks, steel platforms and other equipment, the steelmaker has been working more than ever.
The result is a 42% profit increase in 2023’s first quarter when stacked against 2022’s.
Bottlenecks and Constraints
While the business tech news is good for many, there are still many hurdles to overcome. For one, where a decrease in skilled workforce has pushed an increase in automation, there are still many tasks that need the human touch and has all of the industries scrambling to find the right manpower.
The pandemic hit economic shutdown has industries still reeling from overbooking and are struggling to fulfil past orders. With new ones piling up, the line is getting longer.
But as the industries have started gaining momentum, the bottlenecks and constraints are easing off and many predict that all backlogs will be cleared soon.
However, the skilled workers issue is something the country needs to look at a federal level policy as it is not easy to counter.
Over the years, with better options that present less physical labour, there has been a decreased supply of capable workers in the construction business. The boom means that firms are getting booked and simply do not have enough work force to keep up.