Fitch: easing supply-chain pressures helps reduce inflation

Fitch easing supply chain pressures helps reduce inflation

(Finance) – The improvement of supply chain disruptions global – witnessed by the decrease in shipping rates, the delivery time of goods, port congestion and backlog of orders – increases the prospect of a lower inflation of core goods (excluding energy). This was stated by Fitch Ratings in a report on the subject.

The cost of the shipment in freight has decreased by up to 70% on some routes since September 2021, while the transport of freight now takes about 90 days instead of 122 days in April 2022, the report reads. There congestion in US ports it has decreased by almost 80% since last November. The latest manufacturing PMI also showed that backorders are being cleared faster and supplier delivery times are decreasing rapidly.

“A slowdown in consumer demand for durable goods it is helping to ease the bottlenecks in the supply chain as the purchasing power of households is affected by rising interest rates and rising inflation “, is the rating agency’s analysis.

Just as commodity inflation rose sharply last year, when sales exceeded inventories, theincrease in the inventory-sales ratio today may be consistent with falling commodity price inflation in some sectors.

“However, the risks to the supply chain remain given the zero Covid-19 Chinese policywhich could result in new disruptions to China’s export capacity as the gas rationing in Europe it could affect industrial supply chains “, however, warns Fitch Ratings.

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