Global supply-chain pressures eased through February 2022 but remained historically high, New York Fed researchers reported on March 3. Their Global Supply Chain Pressure Index, or GSCPI, showed a decline from December, with most components contributing to the improvement in February. For procurement teams, that is a broad logistics signal, not an arrival estimate for a particular shipment. [S1]
Even the date of the peak had changed. The March release put it in December 2021, whereas the previous version had placed it in November. Both versions showed a decline heading into 2022, through February. The researchers explain that some inputs arrive late, so the index initially fills gaps with estimated values and replaces them when observations become available. Revisions to the underlying series also matter: some, mainly the Bureau of Labor Statistics airfreight price indices, can revise up to twelve months of earlier data. A changed historical reading need not mean conditions changed again in that month. [S1]
The index combines 27 variables rather than counting delayed shipments. Three manufacturing-survey measures—delivery times, backlogs and purchased stocks—cover China, the euro area, Japan, South Korea, Taiwan, the United Kingdom and the United States. Two shipping-rate series and four airfreight price indices complete the set. The researchers use principal component analysis to extract a common pattern across those inputs while filling data gaps. That gives analysts a way to examine shared pressure across transport prices and factory conditions, instead of treating a single freight route as the whole supply chain. [S2]
The units matter. Zero represents the index’s historical average; movements above or below it are expressed in standard deviations, not percentage changes in freight bills or days of delay. The method also tries to remove demand effects using information such as new orders and purchases of inputs. That adjustment is incomplete. In their January explanation, the researchers acknowledge that the index’s movements during the global financial crisis probably still captured some demand effects. A falling reading therefore cannot, on its own, identify how much of a change came from repaired supply capacity. [S2]
The March update adds regional measures using local manufacturing surveys and relevant transport-cost series. Those can help distinguish conditions across the seven economies, but extra geographic detail does not automatically mean a more precise signal. The authors caution that the regional indices use fewer inputs and leave out cross-country connections. As a result, they can be noisier than the global measure. A regional reading can lose part of the cross-border picture. [S1]
A useful dashboard practice follows: keep the release date beside the month measured, and retain earlier versions when judging past decisions. Otherwise, replacing a chart can quietly replace the information a decision-maker actually had. The March report’s easing signal extends only through February; the researchers also warn that heightened geopolitical tensions could push supply-chain pressures higher again. [S1]
Source documents
- Global Supply Chain Pressure Index: March 2022 Updatehttps://libertystreeteconomics.newyorkfed.org/2022/03/global-supply-chain-pressure-index-march-2022-update/
- A New Barometer of Global Supply Chain Pressureshttps://libertystreeteconomics.newyorkfed.org/2022/01/a-new-barometer-of-global-supply-chain-pressures/