Daily Times

Power outages in China, chaos in Britain’s petrol stations, factory closures in Germany — supply chain problems around the world are threatening to gnarl up a global recovery as countries try to re-emerge from pandemic-induced recessions.

This week saw a number of examples of the supply chain issues currently dogging economic activity across the globe — China ran out of coal for its power stations; the UK had insufficient lorry drivers to transport petrol to the fuel pumps; and gas prices are soaring all across Europe as demand outstrips supply.

“The risk is that even though the economies are reopening, growth slows down because we cannot produce the things people demand,” said Niclas Poitiers, a researcher at the Bruegel institute in Brussels.

The difficulties are already being seen in the economic data: China’s manufacturing activity shrank in September for the first time since the beginning of the year.

In France, manufacturing activity fell to its lowest level since the start of 2021.

In Japan, industrial output declined in August for the second month in a row.

Companies are finding it difficult to get their hands on the raw materials and components that they need to keep production lines running.

The auto industry, for example, is suffering from a severe shortage of semiconductors — the electronic chips without which their models — both conventionally and electrically powered — cannot function.

Japanese giant Toyota slashed its production forecasts last month, and Stellantis said that it would have to halt production at the German plant of its Opel subsidiary until the beginning of next year.

The industry is set to lose $210 billion in revenues this year, twice as much as anticipated at the start of the year, according to the consultancy Alix Partners.

The textile industry has similarly found itself exposed — Swedish giant H&M complained of “disruption and delays in product supplies” in September.

Furniture maker IKEA announced that it would be unable to offer some of its mainstay products because of a shortage of transportation staff and high raw material prices.

Freight costs between China and the west coast of the US have risen more than five-fold over the year as a result of pressures arising from the post-pandemic recovery, according to Freightos Baltic.