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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.

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