{
  "title": "Longer Delivery Times Reflect Supply Chain Disruptions",
  "publication": "IMF Blog, October 25, 2021",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2021/10/25/longer-delivery-times-reflect-supply-chain-disruptions",
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  "summary": "Authors: Parisa Kamali, Alex (Shiyao) Wang",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Authors: Parisa Kamali, Alex (Shiyao) Wang\n- Publication date: October 25, 2021\n- Theme: Supply chain disruptions since the start of the COVID-19 pandemic have driven big increases in freight costs and delivery times, posing a major challenge for the global economy."
    },
    {
      "heading": "Measurement and index construction",
      "content": "- Data source cited: IHS Markit’s suppliers’ delivery times index (constructed from Purchasing Managers Index business surveys).\n- Historical coverage: data goes back to 2007.\n- Survey question: Purchasing managers are asked if their suppliers' delivery times are, on average, slower, faster, or unchanged compared to the previous month.\n- Interpretation rules:\n  - Readings above 50 indicate faster delivery times.\n  - Readings at 50 signal no change.\n  - Readings below 50 indicate slower delivery times compared with those of the prior month.\n- Empirical observation: Suppliers’ delivery times in the United States and the European Union have hit record highs since late 2020."
    },
    {
      "heading": "Causes and economic effects",
      "content": "- Contributing factors listed:\n  - Shutdowns of factories in China in early 2020.\n  - Lockdowns in several countries.\n  - Labor shortages.\n  - Robust demand for tradable goods.\n  - Disruptions to logistics networks.\n  - Capacity constraints.\n- Effects on prices and output:\n  - The recent sharp drop in the delivery times index reflects surging demand, widespread supply constraints, or a combination of both.\n  - During such times, suppliers usually have greater pricing power, causing a rise in prices.\n  - Supply chain delays can reduce the availability of intermediate goods which, combined with labor shortages, can slow down production and output growth."
    },
    {
      "heading": "Near-term outlook and downside risks",
      "content": "- Expected easing condition: Once the number of new COVID-19 cases starts to decline, capacity constraints and labor shortages should ease, taking some of the pressure off supply chains and delivery times.\n- Factors that could prevent swift relief:\n  - Elevated demand during the holiday season in some of the world’s largest economies.\n  - Another wave of new COVID-19 cases.\n  - Extreme weather events, if they materialize, could cause continued supply chain disruptions."
    },
    {
      "heading": "Engagement",
      "content": "- The blog invites reader feedback via a 3-question survey on IMFBlog.\n\nIMFBlog (views expressed are those of the author(s) and do not necessarily represent the views of the IMF and its Executive Board; the IMF is an organization of 191 countries).\n\n---\n\n\nSource: https://www.imf.org/en/blogs/articles/2021/10/25/longer-delivery-times-reflect-supply-chain-disruptions"
    }
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    "Authors: Parisa Kamali, Alex Shiyao Wang",
    "Published: October 25, 2021",
    "Authors: Parisa Kamali, Alex (Shiyao) Wang",
    "Publication date: October 25, 2021",
    "Theme: Supply chain disruptions since the start of the COVID-19 pandemic have driven big increases in freight costs and delivery times, posing a major challenge for the global economy.",
    "Data source cited: IHS Markit’s suppliers’ delivery times index (constructed from Purchasing Managers Index business surveys).",
    "Historical coverage: data goes back to 2007.",
    "Survey question: Purchasing managers are asked if their suppliers' delivery times are, on average, slower, faster, or unchanged compared to the previous month.",
    "Interpretation rules:",
    "Empirical observation: Suppliers’ delivery times in the United States and the European Union have hit record highs since late 2020.",
    "Contributing factors listed:",
    "Effects on prices and output:",
    "Expected easing condition: Once the number of new COVID-19 cases starts to decline, capacity constraints and labor shortages should ease, taking some of the pressure off supply chains and delivery times.",
    "Factors that could prevent swift relief:",
    "The blog invites reader feedback via a 3-question survey on IMFBlog."
  ],
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