3 Reasons Why There Is an Appliance Shortage

If you’re a homeowner looking to wrap up a kitchen renovation or a home builder trying to finish off a new custom home build, you are probably already well aware of the current shortage of home appliances. Ever since the start of the COVID-19 pandemic, home appliances have been difficult to find in stock and purchase. And even if you do manage to get your hands on a new appliance, there’s a solid chance that it comes with some pretty significant tech downgrades thanks to ongoing manufacturing constraints. Here’s a look at the three main reasons why there is a global shortage of home appliances.

Heightened Levels of Demand

Like many home products, demand for appliances rocketed up as people prepared to spend more time at home than ever before. That demand did not taper off as the pandemic stretched on. In fact, appliance sales in the first half of 2021 were even higher than they were in 2020. Unfortunately, that heightened demand hit at a time when manufacturing around the world was taking a significant hit. Pandemic-caused factory shutdowns made it nearly impossible for manufacturers to keep up with demand, creating a backlog that the appliance industry has yet to fully recover from.

Surging Tin Prices

One of the more recent developments hampering the global supply of appliances is the upward trend in tin prices. Tin, which is frequently used as a soldering agent in many types of manufacturing, has nearly doubled in price over the last year. Tin is now much more expensive and harder to come by in general and that is hampering appliance manufacturers’ output even more than it already has been.

“As the global economy normalises after the pandemic, do some of those tin-specific pandemic drivers start to fade? I think that’s a key question and uncertainty for demand next year,” Tom Mulqueen, head of research at Amalgamated Metal Trading (AMT) Ltd told Reuters.

Semiconductor Shortage

As with many of the shortages that are currently affecting the global economy, one of the root causes of the appliance shortage is the simultaneous shortage of semiconductor computer chips. A decade ago, a shortage of semiconductor chips would have had very little impact on the appliance industry. But since then appliances stuffed full of “smart technology” have become the norm, forcing appliance manufacturers to rely on computer chips to make things like smart refrigerators. But the market for these semiconductor chips is highly competitive, and there are only so many chips to go around. If the shortage of semi-conductor chips continues for much longer, appliance manufacturers may have to follow the example of automobile manufacturers and go back to making appliances without some of the high-tech features that consumers are now used to.