LONDON
\nShipping disruptions and a shortage of semiconductors continue to blight the smooth running of global supply chains and this is likely to persist, resulting in continued upward pressure on core consumer goods prices in the near term.
\nFitch Ratings said this in its latest Economics Dashboard, adding some recent commentary has pointed to bottlenecks starting to ease but a trawl of closely followed, timely indicators suggests this optimism is premature.
\nIt said that exceptionally strong demand for durable goods from US consumers and a shortage of container ships caused severe imbalances in supply-demand dynamics as economies recovered from the Covid-19 pandemic-induced recession in 2020 leading to a surge in the cost of shipping freight.
\nGlobal freight rates have increased tenfold since the start of the pandemic and the time it takes to transport a container from Asia to the West Coast of the US has doubled in the same period. Shipping delays have continued to worsen in recent months and freight costs remain hugely elevated.
\n\u201cSupplier deliveries and backlog of orders as reported in purchasing managers surveys have increased significantly in recent months and inventories of finished consumer goods have sunk to historical lows,\u201d said Robert Sierra, Director in Fitch Ratings\u2019 Economics team.Semiconductor shortages persist, with demand for chips outstripping supply, even as chipmakers raise output. Industry reports of lead times between chip orders and deliveries rose further in December.
\nEquipment shortages as a reported factor limiting EU firms output surged in 1Q22, particularly for the autos and electronics industries.Prices of processed material inputs for US firms continued to rise swiftly month on month in December and the year-on-year rate has risen to a 50-year high.
\nCompanies increasingly have passed on these higher costs to consumers.\u201cAgainst this backdrop the spread of Omicron increases the risk that goods shortages could intensify in the near term,\u201d added Sierra.<\/p>\n","protected":false},"excerpt":{"rendered":"
LONDON Shipping disruptions and a shortage of semiconductors continue to blight the smooth running of global supply chains and this is likely to persist, resulting in continued upward pressure on core consumer goods prices in the near term. Fitch Ratings said this in its latest Economics Dashboard, adding some recent commentary has pointed to bottlenecks […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-242674","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-world"},"yoast_head":"\n