Around 70 percent of countries are currently experiencing severe supplier delivery delays, which in turn is seeing manufacturers increasingly marking up their output prices, the Institute of International Finance (IIF) said.
Supplier delivery delays in the US and German manufacturing sectors are almost as severe as in Japan in 2011 after the Fukushima nuclear disaster, the IIF said in its April Global Macro Views report, which analyses data on supplier delivery times for all major economies from the manufacturing purchasing managers’ index.
“Firms are increasingly marking up output over input prices on a global scale, not just in the United States,” the IIF said.
“All this points to supply chain disruptions and their knock-on effect for inflation being a medium-term shock.
That may complicate life for central banks.” Supply chains across the world are already strained and highly vulnerable to even the smallest of external shocks due to a very high consumer.—TLTP