Supply chain blockages are clearing

Supply chain stress eased further in March and we expect conditions to continue improving through the rest of 2023.

What you will learn:

• Encouraging developments in March pulled down our supply chain stress tracker to its lowest level since April 2021. Prices were the biggest contributor to the drop, though they have made the least progress to returning to pre-pandemic levels, while easing transportation strains and weaker activity also helped unwind pressures.
• The persistent easing in supply chain stress is consistent with our expectation of lower inflation and falling inventories this year. We think goods demand will be scarred more deeply than services during the mild recession we anticipate later this year, helping to ease lingering supply chain strains. The moderation in demand will weigh on inventory growth through mid-year and lead stockpiles to fall in H2.