Covid to hit global supply chain for two years: Reagan economist

Covid to hit global supply chain for two years: Reagan economist

Semiconductor shortages are affecting consumers’ ability to buy cars, smartphones, and almost any electronics – and there may be little relief in sight.

According to economist John Routledge, the COVID-19 pandemic will continue to hurt the global supply chain and contribute to near stagnation in 2023.

“The nature of the pandemic is that they don’t have a single wave of infections. They have several waves of infections, ”Safanad’s chief investment strategist told CNBC’s“ Trading Nation ”Thursday.

Rutledge, who played a key role in President Ronald Reagan’s economic planning, warned that the Covid variants would continue to close ports. This is something that happened last month in the Chinese port of Ningbo-Zhoushan, which is the third busiest port in the world.

“It’s because there are a small number of infections that can develop,” Routledge said. “Sailors have not been vaccinated around the world. So, somewhere, in a port, there will be a stop again, and it will go to the semi-finals, but other things too. “

He noted that the closure was having a massive global impact, as well as a shortage of supplies and materials.

“Most of the time, you produce more slowly, and that’s what affects the GDP,” said Rutledge, contributor to CNBC. “If you can’t find the ingredients you need, you have to slow down production. “

Routledge also indicated that labor shortages were one of the main reasons supply chain problems would persist.

“It is not known how many of these workers are afraid to go to work, do not want to go to work or still have a lot of money,” he said. “But it’s very clear to me that this shortfall is not going to go away in three months or six months or 12 months.”

Routledge attributed half of the inflation to supply chain problems. But what hurts production could be bullish for markets and medium to long-term forecasts for an economic recovery.

“The growth is going to be a net positive, as is the number of initial claims that we have seen,” Routledge said. “Global reform is moving forward. It moves in waves. “

Disclosure: John owns shares of Routledge Applicable materials, Taiwan Semiconductorhandjob NVIDIA And that IShares Semiconductor ETF.

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