Feds Step in to Address Inflation, Supply Chain and Energy Conservation

June 21st, 2022 by Travis Rains

Discussion of rising fuel and inflation prices made its way into the recent meeting of the Fenestration and Glazing Industry Alliance (FGIA) as the industry continues to grapple with rising costs. Kathy Krafka Harkema, U.S. technical operations director, provided an overview of inflation and other obstacles, at FGIA’s 2022 Virtual Summer Conference the week of June 6.

Krafka Harkema told conference participants that the U.S. has hit record highs for inflation with March seeing a 41-year high at 8.5%. Energy has risen 30.3% over the year prior, airline tickets were up 18.6% in April and food prices rose 14.3%. Record levels for gas and diesel prices were also reached in early June.
She says that according to the experts, inflation isn’t likely to come under control until interest rates rise above the inflation rate. Jerome Powell, chair of the Federal Reserve, says inflation may not be under control until late 2023 or beyond.

“Truckers are struggling to survive and businesses are struggling to keep up with all these increased costs in inputs and transportation,” Krafka Harkema says. “We are just in a very volatile time economically.”

Some states, she says, are feeling that volatile economy more than others. For example, average diesel prices in California are a dollar higher than in the rest of the U.S. Krafka Harkema says everything will continue to cost more until fuel prices normalize. She also addressed the federal government’s efforts to mitigate inflation and supply chain issues through a supply chain task force.

“It’s a lot of aspirational things,” Krafka Harkema says. “Like as they work with trading partners around the world, trying to reduce forced labor in global supply chains, trying to make sure there are human rights aspects in negotiations in the way other countries operate, and our government has a big focus right now on unionizing workforces in the U.S. and across the world.”

The task force also wants to ensure the U.S. has a smoother, more efficient movement of essential goods. The U.S. is also working to establish new trade arrangements, such as with Taiwan, to strengthen the economy while reducing dependency on Chinese imports.

“As of June 6, President Biden has now invoked the defense production act,” she says. “That means the federal government can tell manufacturing plants what to make and divert manufacturing resources in the U.S. to what the federal government believes are higher priorities than whatever product or service you did manufacture before the government got involved.”

She says the goal of invoking the act is to accelerate domestic manufacturing for clean energy. The federal government will also use $59 million to expand biofuels and decarbonize the transportation sector.

“The U.S. government is going to try to take some of the dependence away from fossil fuels and gasoline and diesel, and get more into biofuels and things like ethanol,” Krafka Harkema says, adding another $38 million will be used to decarbonize four U.S. national laboratories.

A manufactured housing energy efficiency standard from the U.S. Department of Energy is also on the way using the latest energy code.

“If you’re making products that apply for manufactured housing, you’re going to have to make sure those products comply with 2021 International Energy Conservation Code (IECC) performance levels,” Krafka Harkema says.

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