Global Supply Chain Returns to Normal, NY Fed Gauge Shows

Updated: March 8, 2023 (Originally published March 6, 2023)

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

The latest reading of the NY Fed’s Global Supply Chain Pressure Index (GSCPI) shows global supply chain pressures decreased considerably in February.

“There were significant downward contributions by the majority of the factors, with the largest negative contribution from European Area delivery times,” NY Fed said in its update.

The GSCPI’s latest reading (of -0.26 for February) is the lowest reading since August 2019 and reflects that global supply chain pressures are actually now below the historical average.

With the onset 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 gauge of global supply chain conditions dating back to 1997. The index infuses two well known maritime indices, the Baltic Dry Index and the Harper Petersen index of containership hires, in addition to airfreight cost indices from the U.S. Bureau of Labor Statistics and multiple other economic datasets from the transportation and manufacturing sectors to “develop a parsimonious measure of global supply chain pressures.” The GSCPI is updated monthly on the fourth business day of each month.

“The GSCPI’s recent movements suggest that global supply chain conditions have returned to normal after experiencing temporary setbacks around the turn of the year,” the NY Fed said.

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