In the view of the analysts at Goldman Sachs, China's energy shortages and zero-COVID policy pose a risk to the optimism over easing supply bottlenecks.
Key quotes
“China’s energy shortages, zero-COVID policy create considerable uncertainty.”
“China is home to 30% of the global manufacturing capacity.”
“Current low levels of natural immunity suggest that a rise in virus spread during the winter could lead to renewed lockdowns.“
“The danger of these is that they extend supply chain disruptions and delay the normalization of input cost pressures.”
“We see reasons for optimism regarding the resolution of supply chain bottlenecks and easing cost pressures, but risks remain.”
“Shipping rates have generally declined from September's peak, and a number of companies have recently indicated optimism that supply chains are inflecting for the better. including a number of Automakers.
“According to GXO Logistics, "we're through the worst of it" and "things will look a bit smoother as we move forward." However, the latest ISM Manufacturing report showed worsening survey responses regarding supplier delivery times.”