Global manufacturing growth will slow into 2022
Wednesday, August 25, 2021
Significance
Production increased at near-record rates in the West. Growth was also strong in East Asia, based on export demand, but weaker in key emerging markets in South Asia, South-east Asia and Latin America that continue to suffer from pandemic-related disruption.
Impacts
- Production backlogs and inventories will continue to pile up, putting further pressure on both input and output prices.
- Smaller suppliers with limited pricing leverage will bear the brunt of escalating costs.
- Cash-flow pressures will compound market uncertainties and heightened supply chain risks in slowing rates of investment in new capacity.
- Opportunities will emerge from the supply-side disruptions and firms will consider longer-term changes to their supply chains.
- Firms able to leverage their workforce skills, processes and technologies to speed up product innovation are best positioned for success.