This is an extract from today’s edition of Morning Memo, TheJournal.ie’s daily business newsletter, which puts the biggest business and economics stories of the day into context for readers. We also include a reading list of some of the more interesting business and economics-tinged stories from around the internet. Find out more and sign up here or at the bottom of the page.
SEMICONDUCTORS, BUILDING MATERIALS and now chocolate flakes. If it seems like the world is starting to run low on everything, that’s because it kind of is.
Having held up relatively well in the face of the pandemic, a lot was made of the resilience of global supply chains last year.
But with major economies like the United States and China coming roaring back in 2021, demand for raw materials and commodities generally is helping to overwhelm global trade. Lorries are full, logistics companies are overwhelmed and a container shortage is sending shipping costs through the roof across the globe.
Disruption caused by Covid-19 and a series of unfortunate events like the Suez Canal blockage, a Texas ice storm that knocked out semiconductor plants in the winter and cyberattacks certainly haven’t helped. But there are deeper issues at play here, rooted in production.
Global output shrank in 2020 as a result of the pandemic by at least 3.6%, according to UN figures.
At the same time, there were “unprecedented global employment losses in 2020 of 114 million jobs relative to 2019″, the International Labour Organization (ILO) has highlighted. So despite the fact that consumer and corporate demand are coming roaring back, there’s evidence that the world economy is struggling to get workers back to frontlines to ramp production back up to where it needs to be.
Worryingly, these issues seem likely to persist well into the year.
To embed this post, copy the code below on your site
have your say