Higher Input Costs, Delays Restrain Global Manufacturing

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The bottleneck in global supply chains shows little sign of easing anytime soon. 

A measure of suppliers’ delivery times fell in October to the lowest reading in data back to 1998, indicating record delays for factory managers awaiting production materials, data from IHS Markit and JPMorgan showed Tuesday. Meantime, a gauge of manufacturers’ input prices rose to the highest level since 2008. 

The two indexes typically move in opposite directions -- prices increase amid shipment delays as factories compete for a subsequently limited stock of materials -- before stabilizing as supply catches up with demand. 

But the spread in the two indexes has ballooned in recent months as disruptions proliferate around the globe. Rebounding demand has outstripped supply as economies re-emerge from the pandemic, fueling inflation as vendors struggle to keep pace. 

Product shortages and price spikes threaten to constrain the global recovery, with debates intensifying over whether inflation will be temporary or more long-lasting. A measure of global output showed the slowest growth since June of last year, the data from IHS and JPMorgan showed. 

Growth rates of manufacturing production slowed in the U.S., the euro area and the U.K., while a slump in China continued. Among emerging markets, India saw faster growth, while the Brazilian manufacturing economy contracted. 

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