The remainder of 2023’s supply chain landscape is expected to be tumultuous, with fluctuating commodity prices, labor and material shortages, and shifting global dynamics influencing various industries, including industrial, consumer packaged goods (CPG), life sciences, and indirect categories, according to new data from The Smart Cube.
In fact, The Smart Cube’s procurement experts project a number of disruptions (i.e., Germany’s Supply Chain Due Diligence Act, continued war between Russia and Ukraine, earthquakes in Turkey and Syria, and the U.S. and Europe banking crisis), combined with the incoming El Niño weather phenomenon, will drive price volatility for the second half of 2023.
“The Smart Cube’s latest Topical Insights Report reveals the massive impact of numerous global disruptions and weather phenomena on the supply chains that underpin the global economy. According to our experts, all signs point to commodity price fluctuations, labor and material shortages, and continued volatility to influence various sectors for the second half of the year,” says Ritesh Kumar, director of procurement and supply chain intelligence at The Smart Cube. “In an era characterized by unpredictability and macroeconomic events, being well-informed and agile is crucial for businesses, and preparing supply chains to mitigate risks and respond effectively to market fluctuations is paramount to maintain a competitive edge. Embracing the collaborative power of AI and human expertise empowers organizations to navigate challenges with foresight and adaptability, ensuring sustained success in today’s dynamic landscape.”
- The aerospace industry continues to suffer from labor and raw materials shortages, leading to delays in delivery; a situation likely to continue throughout 2023
- As base oil prices rise, major lubricant companies are expected to revise their pricing upward after having offered discounts during Q1 2023.
- Weak market demand and increasing supplies are likely to pull down the prices of steel, aluminum and nickel in the short term.
- Global wheat prices are expected to slightly rise in Q3 2023 due to anticipated supply issues in the United States, coupled with a rise in demand from animal feed in China and the EU.
- Global sugar prices are expected to grow in 2023 primarily due to continuously rising demand from India, Indonesia, and Thailand.
- Global energy consumption is expected to increase by ~1.3% year-over-year in 2023.
- After disruption caused by the Russia-Ukraine war, electricity supply is expected to improve in late 2023 as a result of increased natural gas supply from the United States and the Middle East.
- U.S. electricity prices are expected to increase ~2% month-over-month in August across retail, commercial and industrial sectors.
- Road freight rates will likely rise in 2023 as crude oil prices show an upward movement.