Richmond Fed study says supply chains normal

Supply chain conditions may be more normal than they appear, research from the Federal Reserve Bank of Richmond has found. The study, published last week, examines two indexes: the World Bank’s Global Supply Chain Stress Index (GSCSI); and the New York Fed’s Global Supply Chain Pressure Index (GSCPI). The former shows that supply chain constraints are near 2021 and 2022 levels, whereas the latter shows normal pressure levels. The World Bank index looks at the volume of global shipping that has been delayed. Research says the index compiled by the New York Fed points to business as usual. Because the GSCSI has a narrower scope than the GSCPI (due to focusing on maritime containerised shipping), it does not capture conditions reflected in other shipping channels such as airfreight. As a result, the GSCSI may be more affected than the GSCPI by shocks idiosyncratic to large-vessel container shipping, such as the Red Sea crisis, as per a report.

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