New York Fed launches global supply chain pressure index
Published on a monthly basis starting today, this index integrates transportation cost data and manufacturing indicators to provide a gauge of global supply chain conditions
NEWYORK, NY (May 18, 2022) — The Federal Reserve Bank of New York today announced the monthly publication of a new research product focused on assessing the intensity of global supply chain disruptions through its Applied Macroeconomics and Econometrics Center (AMEC). The Global Supply Chain Pressure Index (GSCPI)—a single measure of global supply chain pressures—will be updated regularly at 10:00am ET on the fourth business day of each month. The GSCPI was first introduced through a Liberty Street Economics blog post in early January 2022.
The GSCPI can be used to gauge the importance of supply constraints with respect to economic conditions, and how those constraints evolve over time. Supply chain operations have become a major problem since the start of the COVID-19 pandemic, and assessing the intensity of this issue has posed a challenge because conventional measures are largely focused on specific dimensions of global supply chains. The GSCPI integrates over 27 variables from commonly used metrics, including data from global transportation costs and regional manufacturing surveys across seven economies, to track shifts in supply chain pressures from 1997 to the present.
“The GSCPI is an important product because everyone across the global economy has been impacted by factory shutdowns, mobility restrictions, and widespread lockdowns during the COVID-19 pandemic,” said Jan Groen, Economic Research Advisor in the New York Fed’s Monetary Policy Research Division. “Our index provides one bird’s-eye view of potential disruptions as well as regional indicators for analyzing trade, inflation, and globalization trends across the United States, China, Japan, the Euro-area, South Korea, Taiwan, and the United Kingdom.”
The GSCPI integrates variables from the Baltic Dry Index, the Harpex container ship rate index, the U.S Bureau of Labor Statistics In- and Outbound price indices, and several supply chain-related components from the Purchasing Managers’ Index surveys on delivery times, backlogs, and purchased stocks.
“The index intends to help policymakers, analysts, manufacturers, and consumers better understand how the evolution of certain pressures can lead to different outcomes in terms of exports and imports, such as scarcity and cost for goods and products,” said Gianluca Benigno, Head of International Studies in the New York Fed’s Monetary Policy Research Division.
In conjunction with announcing regular publication of the GSCPI, the New York Fed also issued an accompanying Liberty Street Economics blog post looking at the GSCPI readings through April 2022. The May headline number reveals global supply chain pressures have increased for the first time since December 2021, with the potential for heightened geopolitical tensions to stoke supply chain pressures in the near term.
For more information on the GSCPI and to subscribe to receive regular updates, check out the product page
About Applied Macroeconomics and Econometrics Center
The mission of the Applied Macroeconomics and Econometrics Center (AMEC) is to develop approaches and ideas for answering the most pressing questions in the fields of macroeconomics and applied econometrics. AMEC’s goal is to build on the extensive work done by the New York Fed’s Research Group in these areas and provide intellectual leadership in the central banking community. Research initiatives will focus on key topics to inform and support the monetary policy evaluation process, including inequality, financial stability, the labor and housing markets, the international economy, climate change, expectations formation, term structure models, and important gauges for monetary policy such as r*.