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Global production and supply chain risks: insights from a survey of leading companies

Author

Listed:
  • Attinasi, Maria Grazia
  • Ioannou, Demosthenes
  • Lebastard, Laura
  • Morris, Richard

Abstract

This box summarises the findings of an ad hoc survey of leading firms operating in the euro area, looking at current trends in global production location and input sourcing, and their impact on activity and prices. The responses indicate that firms increasingly expect to respond to heightened geopolitical risk. In the next five years, more so than in the last five years, firms expect to diversify the location of their operations and their sources of inputs, and to move operations and supply chains to countries that are geographically and geopolitically closer to the final points of sale. Many firms that source critical inputs from China are reducing this exposure. Geopolitical risk is now the most important factor behind decisions to relocate operations into the EU, while demand and cost factors still drive relocations out of the EU. Overall, the aggregate impact which relocation decisions will have on the share of value added generated by firms in the EU is unclear, but such decisions have already pushed up prices and will continue to do so – albeit to a lesser extent – in the next few years. JEL Classification: C83, F13, F51, L23

Suggested Citation

  • Attinasi, Maria Grazia & Ioannou, Demosthenes & Lebastard, Laura & Morris, Richard, 2023. "Global production and supply chain risks: insights from a survey of leading companies," Economic Bulletin Boxes, European Central Bank, vol. 7.
    • Handle: RePEc:ecb:ecbbox:2023:0007:1
    Note: 930374
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    File URL: https://www.ecb.europa.eu//press/economic-bulletin/focus/2023/html/ecb.ebbox202307_01~2a0bcf0b48.en.html
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    Citations

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    Cited by:

    1. Ludovic Panon & Laura Lebastard & Michele Mancini & Alessandro Borin & Peonare Caka & Gianmarco Cariola & Dennis Essers & Elena Gentili & Andrea Linarello & Tullia Padellini & Francisco Requena & Jaco, 2024. "Inputs in Distress: Geoeconomic Fragmentation and Firms’ Sourcing," Working Papers 2436, Banco de España.
    2. Malin Andersson & Nina Blatnik & Stephen Byrne & Lorenz Emter & Valerie Jarvis & Belén Gonzalez Pardo & Martin Schmitz & Nico Zorell & Christoph Zwick, 2024. "Intangible assets of multinational enterprises in Ireland and their impact on euro area activity," IFC Bulletins chapters, in: Bank for International Settlements (ed.), External statistics in a fragmented and uncertain world, volume 62, Bank for International Settlements.
    3. Marco Bottone & Michele Mancini & Albachiara Boffelli & Diletta Pegoraro & Ambre Kutten & Irina Balteanu & Javier Quintana, 2024. "Sourcing governance and de-risking strategies in Europe: a comparative study of Germany, Italy and Spain," Questioni di Economia e Finanza (Occasional Papers) 880, Bank of Italy, Economic Research and International Relations Area.
    4. Ilkova, Ivelina & Lebastard, Laura & Serafini, Roberta, 2024. "Geopolitics and trade in the euro area and the United States: de-risking of import supplies?," Occasional Paper Series 359, European Central Bank.

    More about this item

    Keywords

    activity; business; global trade; prices; supply chains; Survey;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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