The global supply chain is returning to normal Ship’s crew

Conditions in the global supply chain have returned to normal after three years of pandemic-related disruptions, according to the Federal Reserve Bank of New York.

The latest reading from the NY Fed’s Global Supply Chain Pressure Index (GSCPI) shows that pressure on global supply chains eased significantly in February.

“The majority of factors have made significant negative contributors, with delivery times in Europe being the largest negative contributor,” the NY Fed said in its update.

The GSCPI’s most recent reading (of -0.26 for February) is the lowest reading since August 2019, reflecting that pressures on global supply chains are indeed now below historical averages.

The 1997 GSCPI. Courtesy of the NY Fed.

With the outbreak of the COVID-19 pandemic, supply chain disruptions became a major challenge for the global economy.

Launched in January 2022, the GSCPI uses a range of transportation cost data and manufacturing indicators to provide a benchmark of global supply chain conditions since 1997. The Index feeds into two well-known maritime indices, the Baltic Dry Index and the Harper Petersen Index of Container Ship Leases, in addition to air freight cost indices from the US Bureau of Labor Statistics and several other economic datasets from the transportation and manufacturing sectors to provide “an economical measure of to develop the pressure on the global supply chain”. The GSCPI is updated monthly on the fourth business day of each month.

“Recent movements in the GSCPI suggest that global supply chain conditions have returned to normal after temporary setbacks around the turn of the year,” the NY Fed said.

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