PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Service Sector Off to Good Start in 2021: Supply Chain Challenges Still Exist

By at 3 February, 2021, 3:43 pm

by Raymond J. Keating-

Along with manufacturing, the U.S. services sector got off to a good start in 2021, according to the Institute for Supply Management’s services PMI report for January 2021.

The index increased for the eighth consecutive month, and registered its highest level since February 2019. Notable were the facts that both new orders and employment were up compared to December.

As was the case with manufacturers, according to this report, service industry respondents were more optimistic on the economy, but were still facing challenges related to the pandemic, including supply chain challenges.

That last point on supply chain challenges has been brought up time and again throughout this pandemic. No doubt, businesses big and small have had to do some serious rethinking in terms of supply chain issues – while others probably have not carved out the necessary time to think strategically about such matters. There are plenty of resources out there, including some thought-generating articles from BCG.com, the Harvard Business Review, and Deloitte.

As for public policy, elected officials need to avoid counter-productive rhetoric and policies that push against international supply chains and trade. Businesses, entrepreneurs, and employees need more options to establish supply chains that work best, including being more resilient during tough times, including getting hit by Black Swan events.

Limiting markets in efforts to gain political advantages during difficult times would only prolong the difficult period, and restrain the recovery and needed business growth.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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