Supply chain woes dog global recovery

Supply chain woes dog global recovery

PARIS: Power outages in China, chaos in Britain’s petrol stations, factory closures in Germany-supply chain problems around the world are threatening to gnarl up a global recovery as countries try to re-emerge from pandemic-induced recessions. This week saw a number of examples of the supply chain issues currently dogging economic activity across the globe-China ran out of coal for its power stations; the UK had insufficient lorry drivers to transport petrol to the fuel pumps; and gas prices are soaring all across Europe as demand outstrips supply.

“The risk is that even though the economies are reopening, growth slows down because we cannot produce the things people demand,” said Niclas Poitiers, a researcher at the Bruegel institute in Brussels. The difficulties are already being seen in the economic data: China’s manufacturing activity shrank in September for the first time since the beginning of the year.

In France, manufacturing activity fell to its lowest level since the start of 2021. And in Japan, industrial output declined in August for the second month in a row. Companies are finding it difficult to get their hands on the raw materials and components they need to keep production lines running.

Chip shortages

The auto industry, for example, is