Some product shortages have eased in recent months as companies have built up additional inventories in warehouses and warehouses. But the disruptions that have plagued supply chains, adding to price pressures around the world, continue to show signs of worsening, suggesting that American consumers may see more shortages of products like electronics, and possibly more price increases in the coming months.
In particular, sweeping lockdowns in China to try to stamp out the Omicron variant of the coronavirus have posed new risks to the supply of US manufacturing components and finished goods. Although China has tried to keep its ports running during the pandemic, restrictions on truckers have slowed the flow of electronics, auto parts and other goods out of the country.
Ariane Curtis, a global economist at Capital Economics, said in a note last week that, in developed markets, “renewed shortages, particularly of electrical goods, and higher shipping costs could keep goods inflation higher by longer than we currently expect.
The company had forecast inflation in advanced economies to moderate during the year, but the war in Ukraine has hit European supply chains, while lockdowns in China risk further product shortages in the United States. said.
Freight rates have come down slightly in recent weeks, but are still much higher than they were before the pandemic. The price to ship a 40-foot container from China to the West Coast of the United States was $15,817 on Friday, up from $5,893 a year ago and $1,584 at the same time in 2019, according to data from Freightos, a shipping company. cargo transport. tracking company.
Omair Sharif, president of research firm Inflation Insights, said it was impossible to forecast accurately how long Chinese lockdowns might continue to disrupt global supply chains, and thus what their inflationary impact would be. But companies have recently made progress in building up inventories that were stretched long before in the pandemic, he said, and that glut of goods will help cushion the inflationary hit.
Consumers also appear to be cutting back on spending on goods, likely to offset higher food and gasoline prices, Sharif said.
“People are pulling out because of inflation and high prices elsewhere, so things are starting to pile up a little bit in warehouses,” he said. “With inventories we are definitely in a better position to handle a slowdown without a big effect on inflation.”
Phil Levy, chief economist at Flexport, a logistics company, said there was “major concern within the logistics industry that companies have overordered, are stockpiling excess inventory” and backing off.
But forecasting inflation is complex, he said, as international sea lanes remain congested and, at the same time, China’s closures are likely to cause further disruption to the flow of goods. And much of what happens to inflation this year will depend on trends in consumer demand.
“The crystal ball is unusually cloudy right now,” Levy said.
Reference-www.nytimes.com