Companies are stockpiling materials to guard against shortages and disruption to their supply chains, the Bank of England has warned.
In their latest report, the Bank of England’s regional agents said that production was coming under pressure because shortages were leading to longer lead times, higher input costs and rising prices.
“There were widespread concerns among contacts about the cost and availability of materials and components,” the report said. “Output in the automotive sector continued to be constrained by the shortage of semiconductors. Contacts in some sectors reported stockpiling of materials and components in anticipation of continued supply chain disruption.”
Global supply chains are under pressure from rapidly rising demand as advanced economies emerge from lockdown. Businesses are being hit with shortages from microchips to building supplies and commodity and transport costs have soared.
“Contacts reported large cost increases for a wide range of inputs, such as agricultural products, construction … Read more