While the Russian–Ukraine war and mainland Chinese COVID-19 lockdowns this March remain risks to the near-term economic outlook, the latest data suggest North American supply chains performed better than initially expected.

In the weeks following the Russian invasion of Ukraine, IHS Markit expected renewed disruptions to global supply chains that would reverse the improving conditions seen in late 2021. While market conditions remain volatile this summer, the latest Purchasing Managers’ Index data does not currently show worsening backlog conditions or increasing signs of supply shortages since March. With the US Federal Reserve now on a quicker path of tightening monetary policy, the strengthening trade-weighted US dollar will give greater leverage to North America–based category managers. While commodity prices begin to decelerate, and in some cases head lower, over the next 12–18 months, prices will remain elevated compared with year-earlier levels. With global supply chains remaining fragile, category managers in North America will still need to focus first on securing critical supplies to keep operations running smoothly. With restocking activity slowing compared with a year earlier, bargaining leverage will shift toward category managers creating cost savings opportunities when negotiating supplier contracts in the 3rd quarter.

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