Business

Supply chain problems will persist well into 2022, says economics firm

Oxford Economics’ latest supply chain report reveals that the disruptions in supply chains are likely to persist into mid-2022, especially as the COVID-19 Delta variant remains a threat to global recovery.

Those concerns have hit The Bahamas as it has the world, with many companies telling Guardian Business over the past few months that shipping prices have gone up and the likelihood of acquiring products in a timely manner has tanked.

According to Oxford Economics, and as stated one month ago by Abaco Chamber of Commerce President Ken Hutton, there continues to be a long lead time on windows, slowing the progress in the construction sector.

“It’s thus not simply a question of waiting for shortages of one or two products to be resolved,” the Oxford report states.

“Indeed, for many industries, production is likely being hampered by rolling shortages of inputs – as quickly as one bottleneck on production is relieved another appears.

“In the US, for instance, some of the fall back in lumber prices is attributed to weaker demand as builders have scaled back wood purchases as shortages of other building materials, such as windows, have subsequently slowed construction.”

The report added that global container shipping and road shipping “logjams” will continue into 2022, and will remain a major supply chain “headache”.

“Absent a collapse in demand, the container shipping crisis is unlikely to ease significantly without investment in shipping fleets and port infrastructure,” Oxford said.

“Similarly, shortages of HGV/truck drivers around the world reflect poor conditions as well as low pay and won’t be resolved overnight.”

The report suggests that supply chain improvements could come as more people become vaccinated and workplace closures abate and trigger “near-term” improvements.

“Overall, predicting when supply chains pressures will ease, let alone return to more normal conditions, is problematic and reflects the unique circumstances that the world economy faces. But we now think that the industrial recovery may struggle to gain significant renewed and sustained traction much before H2 (second half) 2022.”

Show More

Chester Robards

Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian. Education: Florida International University, BS in Journalism

Related Articles

Back to top button