Supply chain disruptions at record level in the first half of 2021

Posted in Blog

Last month, Finat reported about booming demand for self-adhesive labelstock in the first half of 2021 in response to the general economic recovery in Europe, especially in the second quarter. Throughout the past 12 months, we reported about supply chain disruptions associated with the ‘perfect storm’ of Covid-related factors like excess demand for essential goods, delays in raw materials deliveries and labour shortages due to worker illness and lockdown measures.

Now that the end of the Pandemic is not yet in sight and the economy is expected to continue picking up into 2022, it is likely that also supply chain pressures will continue. This not only concerns consumables (substrates, inks, chemicals) and services like freight, but now increasingly also applies to investment goods, as steel prices have surged since the bottom of the Covid crisis early last year (and this is compounded by mounting environmental and healthcare pressures). In today’s world of digital automation and the internet of things, a shortage of semi-conductor chips is hitting the hardware industry. This in turn is likely to delay the delivery of essential machinery components like control systems and servo drives in the coming months, just at a time when investments were picking up after the virtual investment standstill in 2020.

It will be interesting to monitor whether these pressures will lapse over time as part of economic adjustments, or whether prolonged inflationary pressures will delay the speed of economic recovery going forward.