Since the lifting of Covid-19 shutdown restrictions earlier this spring, the national economy has grown at a 6.5% clip.
But a new report issued by the U.S. Chamber of Commerce is suggesting that that growth could have been even greater were it not for ongoing supply chain issues.
More specifically, the report notes that a shortage of semiconductor chips ended up depressing both motor vehicle production and sales between April and June.
At the same time, the faulty supply chain has had a downer effect on new home building, due not just to builders being unable to get all the materials needed for a given project, but also because investment in the sector declined.
The supply chain challenge, coupled with an ongoing worker shortage, is now being seen as the primary reasons why the economy, despite earlier forecasts, did not grow by an even more robust 8.5%.
According to Forbes magazine, the semiconductor chip crisis currently shows “no signs of ending any time soon and will continues to impact the supply chains for many industries.”
Curtis Dubay, a senior economist with the Chamber, is suggesting that policymakers could go a long way in resolving the supply challenge by doing what they can to help large West Coast ports, which in recent months have been subject to shipment back-ups, expand their capacity.
Dubay is also urging the Biden Administration to lift tariffs on steel and aluminum imports from Europe, Japan, and Korea.
Despite the supply chain challenges, the Chamber’s Economic Policy Division is forecasting an economic growth rate of 7.6% for the third quarter of this year.
By Garry Boulard
