A new index has been launched to track pressures on global supply chains.
The Global Supply Chain Pressure Index (GSCPI), from Federal Reserve Bank of New York, uses data from shipping, purchasing managers' index surveys and manufacturing to chart disruption across the globe.
“Our goal in constructing the Global Supply Chain Pressure Index was to develop a parsimonious measure of global supply chain pressures that could be used to gauge the importance of supply constraints with respect to economic outcomes,” said NY Fed in a blog.
Using data going back to 1997, the GCSPI found pressures have increased in April for the first time since December 2021, driven by worsened delivery times in China and the eurozone and increased air freight costs between Asia and the US. These were associated Covid-19 lockdown measures across China and the Russia-Ukraine war.
NY Fed predicts geopolitical tensions will worsen supply chain pressures in the short term.
Jan Groen, economic research advisor in the New York Fed’s Monetary Policy Research Division, said: “Our index provides one bird’s-eye view of potential disruptions as well as regional indicators for analysing trade, inflation, and globalisation trends across the United States, China, Japan, the Euro-area, South Korea, Taiwan, and the United Kingdom.”
Gianluca Benigno, head of international studies in the New York Fed’s Monetary Policy Research Division, added: “The index intends to help policymakers, analysts, manufacturers, and consumers better understand how the evolution of certain pressures can lead to different outcomes in terms of exports and imports, such as scarcity and cost for goods and products.”
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