Premarket shares: How lengthy can provide shortages proceed?
Shortages are not something consumers in developed economies are used to dealing with. They are annoying. But they can also feed inflation, because consumers are competing over fewer products, driving up prices.
The big question is how long shortages will persist. For clues, investors can look to Asia, where supplier delivery times across manufacturing sectors increased in June. Industrial production in South Korea and Japan fell in May.
“All of this will reinforce concerns that supply is failing to keep pace with red-hot demand and provide more grist to the inflation mill,” said Neil Shearing, group chief economist at Capital Economics.
“Supply shortages are not going to disappear overnight — on the contrary, they are likely to persist in some form until well into 2022,” he added.
But there are signs that shortages could start to ease in the coming months, according to Shearing. He pointed to survey data that shows Japanese manufacturers expect a sharp rebound in production led by…
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