PPB July 2021

perspectives Todd Pottebaum, MAS+ Chair Of The Board Buckle Up. We’re In For A Bumpy Ride. A s I write this column, I’maboard a very full flight fromMinneapolis toAustin, Texas, and reflecting upon the day. It was another big one forme, but then again,most days have been that way lately and I’mfeeling the tensionbetweenmy shoulders. Despite feeling that life is returning to something that resembles the past, it is still not “business as usual.” Instead, it feels like a turbulent flight where you know that you’re covering ground, but there’s little relaxation. Back at the office, we’re adjusting to a newpace aswell and looking to cover newgroundof our own. Sales have been strong lately, but there’s far less predictability. The supply chain, labormarkets andpricing have beenmuchmore turbulent than in the past. There’smomentumin this economy, which is great, but it’s creating another unique combinationof circumstances that the industrymust adapt tobeforewe reach smooth air. Letme explain. Supply Chain When comparing noteswith industry friends,most experienced great success towards the tail endof Q1 and throughout Q2, which is consistent withPPAI’s 2021Q1 Industry Sales Report where 28 percent of distributors and 44 percent of suppliers said theyweremore confident in the first quarter than in 2020Q4.Muchof this confidence coming frombusinesses reopening, events being scheduled and companies activelyworking to grow their businesses again. The demand for our products is returning, but the supply is lagging due to a snarled supply chain. Suppliers are reportingwide-reaching inventory shortages, record-length lead times, increased commodity pricing and clogged shipping lanes that are delaying growthpotential.Whether it’s promotional products, computer chips, building supplies—it all seems tobe in short supply for the foreseeable future as global demand is peaking and creating the need for continuous monitoring of orders and awillingness by all parties tobe flexible. Labor Markets QRG, likemany other industry firms, is growing andwe’re adding new teammembers in every department to support our growth.With unemployment hovering at 6.1 percent nationally at the time this article waswritten, we shouldbe having great success at sourcing and securing ideal candidates, but today’s labormarket has beendifferent asmany companies, especially those inmanufacturing, compete forworkers. The 2021 hiring outlook is positive, says “The Future ofWork, AMonster Special Report.”Of the 82 percent of employerswhoplan tohire this year, 47 percent say it’s to replace or backfill staff, while 35 percent plan tohire for newpositions. Furthermore, analysts estimateU.S. employers addednearly amillionnew jobs inApril, yetmany of those jobswent unfilled. The reasons are numerous, according to aReuters report, including parentswho are having tohome-school their children, jobs that require skills that availableworkers don’t have and the fact that, at this writing, approximately 16millionworkers are still receiving some formof unemployment benefits. The task of hiring newworkers inmanufacturingwas difficult before the pandemic and it’s evenmore challenging now. Pricing As of lateMay, we’ve receivednumerousmemos fromour supplier partners institutingmid-year pricing increases and citing the supply and labor issuesmentioned above. This, in some sense, creates a triplewhammy for industry practitioners aswe attempt to reclaim past successes. The Federal Reserve asserts that today’s rising priceswill not trigger an inflationary spiral, but some economistswarn that free spending by today’s administration could ignite inflation. For every economic argument, there’s seemingly a counterargument and it’s tough to seewhere it’s all headed, which iswhy I like this statement fromLindsey Piegza, chief economist for Stifel Financial inChicago: “What we’re seeing right now is an economy struggling to recalibrate. This is not a seamless process and it’s certainly not something that happens overnight.” Outlook Supply chain, labor andpricing pressureswill continue to bring turbulence to the economy and our industry, whichwillmake for a very bumpy ride in 2021, yet it’s an exciting adventure aswe continue to climbhigher and cover newground. The important thing to remember is that we are on this journey together andwe’re all dealingwith the same pressures, so treating eachother with kindness andunderstandingwill go a longway tohelpus all get through this period. In fact, kindness andunderstanding canmake a difference to everyone. The FAAhas reported at least 394 cases of unruly passengers so far in 2021, as airline passengers grapplewith a variety of issues. That number ismore thandouble the cases in all of 2020.What those of us in the promotional products industry are dealingwith is notmuchdifferent. In the end, remember that turbulence is just that, a bumpy ride. Let’s work as one to smooth the air and chart newdestinations together. 4 | JULY 2021 |