The immediate root cause of the spike in empty containers is the -halfway surge that collided with weakening consumer demand in the spring and summer.
After the Covid-19 pandemic was gradually controlled, the global manufacturing industry had a rapid recovery with a focus on strong consumer demand. But recently, the numbers seem to be telling a completely different story than expected.
Automotive businesses are struggling due to not being able to stock up on inventory (cre: VTV Digital)
During the pandemic, people expect factories to light up and engines to work – a sign that production is recovering. Reality shows that the road to recovery is never easy, especially when inflation in many countries around the world erodes people’s spending power and reduces demand for goods.
In the US, in just 6 months, two indexes: manufacturing PMI and the number of orders that factories here have dropped to super low levels in just the past 2 years.
In Europe, the June manufacturing PMI fell to only 52.1% while the decrease in orders also decreased significantly from May 2020.
According to the US Department of Commerce, spending on goods by the US’s household ministries in May alone fell 1.6%, while spending on durable goods fell by 3.5%, to the lowest level since. December 2021. The main reason is high inflation and the Fed’s interest rate hike has put pressure on the US people’s psychology, causing consumer confidence to drop the most in the past 9 years.
However, not all major manufacturing sectors tend to decelerate because just in June, China’s manufacturing PMI surpassed 50 points, showing an expansion of activity after 3 months of contraction. consecutive. However, this positive picture still contains many worrying factors as the number of new export orders has decreased overall.
The South China Post newspaper commented in the morning, the demand in the Chinese market not only promotes the domestic manufacturing industry, but can also support the export industry in many other countries, but will depend on the epidemic situation and China’s anti-epidemic policy.
The increase in inventories can be caused by many reasons such as difficulties in transporting production due to supply chain disruptions, while many businesses also increase their stockpiling of materials due to concerns. about the possibility of a shortage.
According to Nikkei, the current problem is that the level of inventory is too high, combined with a low level of consumption, which can cause many businesses to temporarily reduce production speed, in addition to the economic downturn. The ongoing capital reduction will only get worse and worse.
Almost 50 million smartphones are in stock of distributors (cre: AP)
A wide range of manufacturers, from Samsung to Ford, have stocked up on inventories due to predictions of higher consumer demand as the economy returns after a long period of time after COVID cases fell sharply, early March 2022.
REPORTED BY LUCY 2022-10-04
