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PA IN THE MEDIA

Are global supply chain issues easing?

Shanton Wilcox, US manufacturing lead at PA Consulting, discusses global supply pressures.

Click here to read the full International Business Times article

The article notes that global supply chain issues like port congestions and container shortages have been critical factors behind the recent inflation surge. They have pushed transportation costs higher, resulting in higher prices for the end buyer, the consumer.

In addition, global supply chain issues have caused product delivery delays, which added to inflationary pressures.

Initially, economic observers, including the Federal Reserve, thought that global supply-chain issues were temporary due to the inability of the supply side of the global economy to catch up with the increased demand unleashed by the end of the pandemic lockdowns. Thus, the Fed and other central bankers around the world hesitated to take action against inflation.

Are global supply chain issues easing? Experts are divided.

Shanton thinks that supply chain issues are not easing. Instead, they have been overshadowed by the media headlines by inflation and gas prices. He cited U.K. car sales falling 9% in July, while Toyota and Lucid lowered production targets due to supply chain issues like plant shutdowns in China and the ongoing chip shortage.

He adds: “The chip shortage also caused Nintendo to miss its forecast for the Switch console. There are warnings from utilities in Florida that recovering from a hurricane this year may take months to even a year as manufacturers of transformers and other components have historic backlogs and are even declining new orders."

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