Goldman Sachs on their outlook for China supply chain issues:
1. China's energy shortages
2. and zero-COVID policy
create considerable uncertainty.
GS note that China is
- home to 30% of the global manufacturing capacity
and say that current low levels of natural immunity suggest that a rise in virus spread during the winter could lead to renewed lockdowns
The danger of these is that they
- extend supply chain disruptions and delay the normalization of input cost pressures
Otherwise GS is seeing an easing of supply chain bottlenecks:
- We see reasons for optimism regarding the resolution of supply chain bottlenecks and easing cost pressures, but risks remain.
- Shipping rates have generally declined from September's peak, and a number of companies have recently indicated optimism that supply chains are inflecting for the better. including a number of Automakers.
- According to GXO Logistics, "we're through the worst of it" and "things will look a bit smoother as we move forward." However, the latest ISM Manufacturing report showed worsening survey responses regarding supplier delivery times.
