July 4th celebrations threatened by fireworks shortage: Expert

Independence Day celebrations may not be as spectacular this year as some may have hoped due to logistical and supply constraints causing a fireworks shortage worldwide.

People looking to purchase fireworks for the Fourth or for future pyrotechnic celebrations should stock up, Stephen Pelkey, CEO of Atlas PyroVision Entertainment Group, told Yahoo Finance Live.

“The only way to get around [the shortages] is if you're going to need fireworks for the Fourth of July, buy it early, if you're going to need fireworks in August or September, buy it now,” Pelkey said. “Because there may not be those items or even any of the particular items that you're really interested in.”

Atlas PyroVision Entertainment, the largest professional fireworks display company in New England, specializes in computer designed and electronically fired displays for municipalities, sporting events, and private venues. 

Pelkey said the fireworks industry experienced a record increase in consumer fireworks sales in 2020, nearly doubling from $900 million in 2019 to $1.8 billion in 2020. “So naturally, you're going to have a disruption of having a lot of those companies try to resupply at those levels,” he said.

Pelkey cited factory shutdowns in China, shipping delays, and increased shipping costs ranging from 250% to 300% or greater as the main factors contributing to the global fireworks shortage. Even if companies are able to ship them, the pyrotechnics will likely be waiting on a ship outside a port.

“With the continuing ongoing global shutdown and having probably only about 70% of the ships in operation, the ports just aren’t able to handle [this level of operation] because globally, you just don't have a lot of this infrastructure that is completely back in service.”

As for how the fireworks shortage will affect prices for American consumers, Pelkey expects them to increase anywhere from 15% to 20%. He believes that this will become the norm over the next couple of years for the fireworks industry, especially going into 2022 as port and rail service congestions resolve.

A 5% to 8% increase in raw material costs for fireworks produced in China, in tandem with the aforementioned skyrocketing shipping costs, Pelkey said, aren't helping matters.

“Most retailers, most professional display companies are trying to spread [the increased supply costs] out over all their product lines, because there are going to be some commodities that just can't absorb a 50% to 60% increase,” Pelkey said.

Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter: @thomashumTV

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