Shortages of semiconductors, car parts, and other key items that flow through supply chains are likely to remain for the foreseeable future, Citi warned in a new note.
“Bottom line, we find that supply chain pressures have proved to be more persistent, and apparently deep rooted, than we had expected even a few months ago,” strategists led by Global Chief Economist of Citi Research Nathan Sheets wrote the note. “And the Russia-Ukraine conflict seems to be further amplifying the stresses. Given these realities, any hopes of near-term improvement in supply chain conditions have been shattered. The challenges in the months ahead look to be as acute as at any time over the past two years.”
Inflation, labor shortages, and increased household savings are some of the ongoing headwinds facing supply chains, according to Citi, and these pressures will be alleviated when the pandemic truly wanes.
“To relieve the stress in global trade, we ultimately need to see an improvement in the pandemic,” Citi stated. “Some specific supply chain issues are beginning to unwind but there are still a number of lingering unknowns.”
The status of the pandemic is key, Citi explained, because the pandemic demolished the idea that global supply chains were fully optimized.
Click here to see the full story from Brian Sozzi at Yahoo Finance.
