Global supply shock threatens the economic recovery
Markit reports that “solid and accelerated expansions of output” were witnessed across the board, in investment goods – buildings, tools and machinery; intermediate goods, such as wood, metal and sugar; and consumer goods – clothing, food and electronics.
Thank Britain’s enviable vaccine rollout, together with “the loosening of lockdown restrictions, demand recovery and rising backlogs of work”, Markit says. But beneath the encouraging data lies a worrying new trend.
Supply chain problems are already hurting growth with factory owners in the US reporting that activity fell to 60.7, from a 37-year high of 64.7 in March, as manufacturers found it difficult to meet orders.
It started with a shortage of semiconductors forcing carmakers such as JLR, Mini and Honda to suspend production in the UK, and General Motors predicting a $2bn (£1.4bn) hit to its profits, before…