Elgin Area Chamber Of Commerce: Coronavirus Stalls Job Recovery, Freight Railcar Orders Rise, Supply Chain Activity Expands

Press release from the Elgin Area Chamber of Commerce:

February 03, 2022

Coronavirus Stalls Job Recovery

Private payrolls unexpectedly fell in January as new coronavirus cases soared.

Payroll company ADP reported this week that payrolls fell by 301,000 jobs when the expectation was a 200,000 gain.

“The labor market recovery took a step back at the start of 2022 due to the effect of the omicron variant and its significant, though likely temporary, impact to job growth,” said Nela Richardson, ADP’s chief economist, in a statement.

After leading the recovery over the past year, the leisure and hospitality industry led the lost with 154,000 jobs, showing how sensitive those businesses are to coronavirus surges.

Small business took the brunt of the loss as well, with payrolls falling 144,000. That conflicts with rival payroll company Paychex report on Tuesday that small business hiring, particularly in the leisure and hospitality industry, hit the highest level since it started its index in 2005.

The ADP report could be a bad sign for the Labor Department’s report on Friday. White House officials got ahead of the possible bad report nearly a week ago with a warning on how it could look because of the way the government collects data.

Freight Railcar Orders Rise

Orders for new freight railcars in the final three months of 2021 were nearly four times higher than the previous year.

During the quarter, manufacturers saw orders rise to 13,477 compared to 3,397 in 2020’s fourth quarter, according to data from the Railway Supply Institute.

For the year, orders were just about at 2019's levels but less than half of 2018. Deliveries have been slower as the backlog grows.

Greenbrier Cos., one of the largest railcar manufacturers that also leases out railcars, reported in early January that its backlog had reached $3 billion, which is the highest in three years.

But the company noted the challenges with hiring and supply chain disruptions put a damper on profitability.

Supply Chain Activity Expanding

Although disrupted and challenged, supply chain activity remains in strong expansion mode, according to an industry index.

The Logistics Managers' Index created by supply chain experts six years ago showed a reading of 71.9 in January, a 1.8-point gain from December.

That marks a full year above 70, which the index creators classify as a “significant expansion.” The index was only below 70 in December 2020 and January 2021.

The index pulls together various industry indicators. For the month, transportation use rose while warehouse and transportation capacity contracted.

Transportation and warehouse prices, inventory levels and inventory costs continue to rise but at a slower pace, according to the index report.

Source: www.CoStar.com

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.