Raw material and semiconductor chip shortages are likely to remain the key issues to challenge the automotive supplier market through the rest of the year according to the Original Equipment Suppliers Association’s (OESA’s) Automotive Supplier Barometer for Q3 2021.
The quarterly survey, however, noted improved sentiment from Q2 2021, with the supplier barometer index (SBI) score increasing by eight points to 52 quarterly. Around 39pc of the respondents were optimistic about the industry’s outlook in Q3 compared to 31pc in the previous quarter.
Still, 31pc of the respondents continued to give a pessimistic outlook for the automotive parts industry through the next quarter. Mid-sized automotive suppliers were the most optimistic, while large- and small-sized suppliers remained pessimistic about the industry’s outlook.
Suppliers’ ability to fulfill orders and a high turnover in the labor force remains other issues that continue to concern this industry, though suppliers remain optimistic about the US economy and a limited impact from COVID-19 related issues.
Labor shortages are also weighing on supplier costs, with most of the respondents in the survey noting that they have budgeted for a 5.4pc increase to hourly wages and a 2.4pc rise to employee salaries to reduce workforce attrition.