Supply Chain Disruptions Driving Inventory Growth

Chinese corporate inventories of finished goods are accumulating rapidly, as a result of disrupted supply chains caused by lockdowns and other COVID-related restrictions. There is a widening gap between overall industrial production and final demand as China’s current slowdown extends, similar to the inventory buildup in Q2 2020. While supply chain disruptions are temporary and likely to contribute to both domestic and exported inflationary pressures, the medium-term trends caused by rising inventories are fundamentally disinflationary, both within China and for global raw materials prices.

Posted May 13, 2022
Facebook Twitter Pinterest