In its latest weekly roundup, the Bureau for Economic Research (BER) reports that rising costs due to persistent supply chain disruptions of key components, such as semiconductors used in transport manufacturing, continue to weigh on global growth.
This is despite the economic impetus garnered from many countries around the world as they forge ahead with vaccine rollouts, in which instance South Africa is sadly not included.
Worldwide attempts to vaccinate people against Covid-19, the BER says, has provided the necessary stimulus to spark growth.
Unfortunately, this has been countered by growing concerns about the near-term impact of renewed lockdowns (mainly in Europe), and side effects of the AstraZeneza shot, says the Bureau.
The issue of chip manufacturing and its impact on the automotive centre featured in an article in the Harvard Business Review back in February.
The article stated that although the US economy was rearing to go on the back of widespread vaccination of American citizens, there were fears that supply chains may not be able to keep pace with growing demand.
Shortages and supply chain disruption was the reason, the authors wrote, why the pandemic had sparked a review of critical areas, with semiconductor production being one of the worst affected sectors.
“Lead times for many semiconductors are one year out right now, and these devices are in just about everything we use,” the article said.
“Business and financial media have detailed how the shortage of semiconductors has caused production cutbacks in the automotive industry: Ford, Toyota, Nissan, VW, and Fiat Chrysler Automobiles (now a part of Stellantis) are among global carmakers that have scaled back output.
“Other carmakers have announced they’ll likely miss their 2021 targets. And it’s not just carmakers that are in trouble. The chip shortages are expected to cause widespread shortages of everything - from electronics to medical devices to technology and networking equipment.”
- Read the full Harvard article here: https://tinyurl.com/f6fjd65w