• Supply chain problems are increasing for many companies, particularly in the U.S. and the Eurozone.
  • Components of the IMF's purchasing managers' index show how supply chain disruptions have developed during the pandemic.
  • Disruptions spiked during early 2020 and are starting to increase again over the course of 2021.
  • The IMF has also said that supply chain disruptions together with increasing raw material prices are also a reason for the rise of consumer prices.

As the coronavirus crisis is wearing off in many parts of the world, supply chain troubles are increasing once more for many companies, mainly concerning the U.S. and the Eurozone. Components of the International Monetary Fund’s purchasing managers' index show how supply chain disruptions have developed during the pandemic, spiking in early 2020 and picking back up over the course of 2021 as the new normal causes all types of goods to become more sought amid a more permanent reopening. The supply chains in China and emerging markets, on the other hand, are less affected.

Still reeling from lockdowns and restrictions as well as the loss of manpower due to illness or travel restrictions, many suppliers had to restrict their production and were no longer able to meet their delivery obligations in full. And as even a single missing supply part can quickly affect production processes in a massive way, the complex structure of global supply chains can quickly fold.

According to the IMF, supply chain disruptions together with increasing raw material prices are also a reason for the rise of consumer prices. The IMF expected this global inflation to reach its peak at the end of 2021 and return to pre-crisis levels in many countries by the middle of 2022.

What is the World Economic Forum doing on trade facilitation?

The Global Alliance for Trade Facilitation is a collaboration of international organisations, governments and businesses led by the Center for International Private Enterprise, the International Chamber of Commerce and the World Economic Forum, in cooperation with Gesellschaft für Internationale Zusammenarbeit.

It aims to help governments in developing and least developed countries implement the World Trade Organization’s Trade Facilitation Agreement by bringing together governments and businesses to identify opportunities to address delays and unnecessary red-tape at borders.

For example, in Colombia, the Alliance worked with the National Food and Drug Surveillance Institute and business to introduce a risk management system that can facilitate trade while protecting public health, cutting the average rate of physical inspections of food and beverages by 30% and delivering $8.8 million in savings for importers in the first 18 months of operation.

The index is calculated by the IMF using the difference between the delivery time and production indices of the PMI. The higher the value, the more disturbances occur in global supply chains.

a chart showing how supply chain disruptions are making a comeback
Supply chain troubles have affected many companies.
Image: Statista