Global industrial capacity tightness to take time to relieve
Recovering consumer demand has clashed with supply constraints, causing inventories relative to demand to fall in several industries, such as autos, electronics, machinery, and wood. However, the latest data to June indicates inventory tightness in several sectors may be starting to ease.
What you will learn:
- Supply chain disruptions across most sectors should begin to unwind from H2 2021, as the reopening of consumer services and diminishing fiscal support lead to a moderation in goods demand, whilst easing material shortages allow manufacturers to ramp up production.
- However, this moderation in disruption will be gradual, and we expect capacity to remain tight and price pressures to stay firm for the rest of this year. Other sector-specific supply chain disruptions are likely to be longer lasting – notably the semiconductor shortage in the auto industry.
- Consistent with historical experience, we also expect most of the temporary price increases in strained goods to reverse, at least partially.
Tags:
Related Services

Post
Global Scenarios Service: Taiwan Tensions
Global economic prospects remain relatively subdued. The peak impact of past policy tightening has yet to be fully felt in the advanced economies and China is expected to underperform relative to consensus.
Find Out More
Post
Why a US year-end slowdown is still our base case
We still think that the US economy is headed for a slowdown at the turn of the year. Three factors will increasingly weigh on growth: the impact of past rate rises; the drag from fiscal policy; and less resilient household finances.
Find Out More