Supply Chain Disruptions to Continue for the Foreseeable Future

Businesses in the Federal Reserve Bank of Cleveland’s district have endured supply chain disruptions since the onset of the COVID-19 pandemic. More than a year later, those disruptions continue to impact firms in the region, but in different ways and for different reasons than earlier in the crisis.

In this District Data Brief, Cleveland Fed researcher Julianne Dunn chronicles the evolution of supply chain impacts through the eyes of business contacts in the region the Cleveland Fed serves.

“In February and early March 2020, most business contacts indicated that they expected the impact of factory shutdowns in Wuhan, China, to be manageable. As the virus spread and governments around the world imposed stay-at-home orders, reports of supply chain disruptions increased, leading to product shortages,” says Dunn. “Following the reopening of economies, disruptions became idiosyncratic. Contacts saw an increase in disruptions to logistics networks piled on to the ongoing erratic parts shortages and shipping delays, which has continued throughout winter.”

As COVID-19 continues to hinder the progress of the global economy, some firms have indicated that they are hesitant to invest in additional capacity because they are unsure how long robust demand will continue. Because of this hesitancy and because the path of the virus remains unclear, it is likely that supply chain disruptions will continue to evolve for the foreseeable future.

Read the District Data Brief.

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.455.4479