Lower oil prices and the threat of terrorism are affecting global supply chain resilience, according to research.
Norway has lost its position as the country with the most resilient supply chain to Switzerland because of declining oil prices, according to the2016 FM Global Resilience Index, which ranks the supply chain resilience of 130 countries according to nine drivers that affect business vulnerability.
Kuwait, ranked 59 this year and down from 50 last year, experienced one of the biggest declines, as its GDP was hit hard by lower oil prices, the report said. Venezuela was named as the country with the least resilient supply chain.
“Venezuela’s position at the bottom of the ranking reflected its exposure to natural hazards, perceptions of lack of control of corruption and poor infrastructure, as well as ill-perceived local supplier quality,” the report read.
The impact of falling oil prices was reflected in the rankings for Armenia (52) and Malawi (84), two of the biggest risers in the index. These higher rankers were the result of their reducing oil consumption, making them less exposed to the dynamics of the oil market, the report stated.
The threat of terrorism also continued to have an effect on supply chain resilience with deadly terrorism acts affecting the rankings of Pakistan (117), Belgium (17), Côte d’Ivoire (58), Nigeria (116) and Turkey (79).
The study’s authors also believe that if the UK (unchanged at 20) leaves the EU its future ranking could fall.
“A vote for the country to leave could represent a significant risk to the UK’s productivity and growth prospects,” it read. “Should that result, the index drivers affected by GDP could be adversely swayed.”