Labour still scarce, but supply chains improving: BMO

New U.S. manufacturing data suggests that supply chain constraints are relaxing, according to economists at BMO Capital Markets.

The latest ISM manufacturing index data indicated that “supplier delivery times improved for the third month in a row” in January, and that order backlogs dropped to their lowest level since October 2020, BMO said in a research note.

“The steady progress in these indicators suggest that supply constraints, though still elevated, are starting to ease,” it said.

These signs of improvement came against the backdrop of declines in production and new orders “as the sharp rise in omicron cases capped activity,” BMO noted.

And, amid strong demand for labour, “hiring fell again, indicating that the struggle to find workers hasn’t eased up,” it said.

“Overall, U.S. factories will likely stay robust for some time,” it concluded.

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