Global slowdowns in manufacturing output were recorded in August as factories around the world struggled with the same supply chain disruption and labour shortages that are plaguing Britain.
Latest IHS Markit Purchasing Managers Index figures for the eurozone were down slightly to 61.4 from 62.8 in July – although anything above 50 indicates growth.
British manufacturing output was the weakest over the last six months, with Canada, China and Australia also noting sluggish growth, reports Reuters.
Chinese factory output slipped into contraction for the first time in one-and-a-half years, with a reading of 49.2.
Europe-wide driver hunt
Driver shortages are a Europe-wide problem, the Daily Mail reports, with a shortage of 400,000 drivers across the continent.
While Britain is short of around 100,000 drivers, Germany needs up to 60,000, France has a 43,000 shortfall, and Italy is 15,000 down.
UK ministers have so far rejected calls from various trade bodies to loosen visa restrictions to tempt EU drivers to come back and work in Britain.
US at capacity
US inland rail and road freight services are also at maximum capacity, slowing the rate of container movement through West Coast ports with knock-on impacts for global shipping, reports Lloyds Loading List.
Cargo movements tracked by project44 found 41 vessels anchored outside of LA and Long Beach awaiting berth space, with 33 currently moored at both ports – the highest level of congestion since February.
Although ports are working hard to clear the backlog, they are being hampered by an antiquated rail and road infrastructure, with a 30% no-show rate for trucks at the Port of LA.
US trucking
Just as British companies are calling out for visas to tempt EU truck drivers to work in Britain, the US is trying to recruit from Mexico, Canada and South Africa to solve its own trucker shortage.
Bob Costello, chief economist at American Trucking Associations, told the FT that the shortfall is “the worst ever”.
Andrew Owens, chair of the board of Oregon Trucking Associations, said the idea of turning to foreign drivers was “picking up steam”.
Companies are calling on the government to relax visa requirements or speed up their approval.
South Korean labour disputes
Also of concern for global supply chains is the news that South Korean shipping company HMM could be facing strike action.
Its workers are calling for higher wages after the company’s profits soared to $2.1bn in the first half of the year. The move could threaten supplies of auto and tech parts, the FT reports.
HMM estimates that a three-week strike would result in about $580m of operating losses for the company and other shippers.
South Korea’s PMI fell from 53 to 51.2 in August, just above the 50 mark that indicates growth. It was the first fall in factory output for over a year.
Pandemic productivity boost
Some economists think that the labour shortage could actually result in improvements to productivity as measured by total factor productivity (TFP).
TFP is the rate at which productivity improves over and above what can be attributed simply to inputting more labour and capital.
Economists at US think-tank The Conference Board predict US productivity could increase by about 2%. The increase could be down to doing more with less, including technology adoption and more innovative processes.
