The world economy is recovering from the health crisis thanks to the emergence of COVID vaccines. However, the pandemic has left one extremely damaging economic problem: disruptions in international supply networks.
Because of the virus’s quick spread in 2020, companies worldwide were forced to shut down, and as most of us were in isolation, customer demand and industrial activity diminished.
But demand has skyrocketed as lockdowns ease and things normalize. Furthermore, supply networks interrupted during the pandemic are still experiencing serious hurdles and are striving to recover.
This has caused havoc for producers and distributors since they cannot create or provide as much as they did before the outbreak for many reasons, including employee shortage and a lack of vital raw materials.
A Global Concern
Supply chain challenges are now a sticking point in many regions of the world—- and they have aggravated for a multitude of reasons.
Power outages in China, for example, have hampered manufacturing in the past few months, while Brexit has played a significant role in UK’s truck driver scarcity. The United States, like Germany, is suffering from a trucker shortage, with the former facing significant bottlenecks at its ports.
The Situation May Worsen
Regrettably, analysts such as Moody’s Analytics’ Tim Uy believe that supply chain issues will “worsen before they improve.”
“As the world economy tries to recoup, it is becoming clear how the emerging supply-chain disruptions will slow it down,” Uy said in a statement.
“Customs checks and travel restrictions, the lack of a worldwide vaccine pass, and increased demand due to stay-indoor laws have created a force that will cause hiccups in global production due to late deliveries, a rise in costs & prices, and slower global GDP growth.
“Supply will lag for some time, particularly because there are constraints in every component of the distribution chain, from trucker shortages to factors like containers, transportation, ports, and storages.”
Payment industry guru Taylor Cole is a passionate money expert who understands the complex world of payment providers UK. He also writes non-fiction on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice cream on his backyard porch, as should all right-thinking people.