Global supply strains that started to ease in early 2022 are worsening again as headwinds strengthen from the war in Ukraine and China’s COVID-19 lockdowns, threatening slower growth and faster inflation across the global economy.
After the pandemic hit Asia-U.S. trade routes the hardest over the past two years, the latest turmoil is being acutely felt in Germany, which is heavily reliant on Russian energy and suppliers across Eastern Europe. Business expectations in the region’s biggest economy during March posted the steepest one-month drop on record, factories across the continent face diesel and parts shortages and delays moving cargo through key North Sea gateways such as Bremerhaven are lengthening.
"We thought Russia was just a resources story that was going to push energy prices up — that it would make supply chains more expensive but it wouldn’t disrupt them,” said Vincent Stamer, a trade economist with Germany’s Kiel Institute for the World Economy. "It appears a little more threatening than we initially anticipated.”