From a friend who is in management at one of the major firearm and ammo distributors. I excerpted these two paragraphs from his happy new year message to the LGS community they serve. I am always interested in the speculation and forecast nature of his observations having been in the industry 25+ years.
"2020 steamrolled on while consumer demand showed no signs of cooling down. NICS numbers continue to surpass previous high water marks even as inventory supplies appear to be nonexistent. Inventory is turning at such a rapid rate, it simply does not survive on the shelf at distribution nor at retail for more than a few hours. Empty shelves, scarcity, drives changes in consumer behavior. This scarcity drives the average consumer to purchase in greater quantities than they would otherwise, particularly in the ammunition category. Scarcity is also playing a role in influencing consumers to purchase additional and/or multiple firearms. Scarcity also forces all of us in the supply chain to look further ahead in 2021 and plan for the next season's sales sooner than traditional timelines once dictated.
There are no simple solutions to answering the hyper demand and the situation remains, in ways, difficult to fully describe. Increasing production is certainly risky and obviously expensive, especially given the short term nature of our current demand spike. A boom/bust business cycle is, long term, a losing situation and to consistently profit along the ups and downs is a difficult proposition. Given the industry's collective experiences since the Y2K bubble, I wager many decision makers in our industry chose to "wait out" 2020's demand spike. Add in the increased uncertainties and challenges of the pandemic, with so many factors simply out of any one business' control, a waiting things out short term strategy reduces certain risks and additional complexity. "
I read that as the people at the manufacturer's he is talking to are leaning toward waiting this market out rather than expanding capacity.
Sentiment is it is all temporary, and they are making so much money, selling everything they have, but don't expect it to last. So why make more capital investments in capacity and hire lots more people if the odds are you are going to have to idle the capacity and lay the people off to remain profitable a year or two from now.
Speculation of course, but more informed than any of mine.