As the Covid-19 pandemic eases and national economies emerge from suspended animation, demand for energy, labour and transport has surged. That sudden acceleration is putting a huge strain on the just-in-time, cross-border supply chains that keep factories open and shelves stocked
The US is experiencing a massive labour shortage, especially in the leisure and entertainment sector. There were a record 10m job openings in the US at the end of June. China is experiencing impacts on large parts of its economy too. The investment banks Nomura and Goldman Sachs have downgraded their forecasts for growth in the world’s No 2 economy in the wake of power cuts that have idled factories and are also extending already long delays at ports.
In Germany a 14.3% surge in energy prices in Germany and the knock-on effect on petrol prices (up 20%) and foodstuffs (4.9%) have all contributed to September’s inflation rate rise to 4.1%, the highest in Germany in almost 30 years. In Russia, food inflation is at a record 7% annual rate, its highest in five years.
Britain’s recovery was threatened by a “pingdemic” that forced hundreds of thousands of workers to self-isolate after they came into contact with someone with Covid-19. It is an episode that is rapidly having economic consequences as it overlaps with shortages of lorry drivers and interruptions to global supply chains that have pushed up prices in everything from computer chips to liquified natural gas.
In Australia shortages of timber, steel and other materials are causing havoc in huge construction industry and builders are struggling to keep up with demand. Australia is expected to increase output in its economy by 4% this year, according to the OECD, despite its two most populous states – New South Wales and Victoria – being in lengthy lockdowns.