Supply Chain Finance: Uncertainty In Global Supply Chains Is Going to Stay
Citi has launched its latest Global Perspectives & Solutions (Citi GPS) report titled: Supply Chain Finance: Uncertainty in Global Supply Chains Is Going to Stay. Its findings indicate that in an environment of stabilizing trade flows and cooling goods demand, disruption remains top of mind for businesses reliant on global supply chains.
The report, which follows last year’s report titled: The Complicated Road Back to “Normal”, draws insight from Citi Research’s propriety Global Supply Chain Pressure Index, trade flows and survey responses from multinational corporations and their suppliers globally.
The Citi Global Supply Chain Pressure Index, outlined in the report, continued to ease on the back of a slowdown in global consumer’s demand for goods. Core goods inflation is expected to alleviate in the coming months as heightened supply chain pressure has been a key driver of price pressure. The report cautions that while the decrease in demand is an important driver of loosening supply chain pressures, these developments are also a sign of mounting recessionary risks across countries and globally.
By analyzing the $4 trillion of average daily payment flow that Citi’s Treasury and Trade Solutions division processes, the report finds that flows have largely stabilised after multiple disruptions in 2021 and early 2022. It is against this backdrop of stabilisation, that Natural Resources and Clean Energy Transition (NRCET) trade flows grew 65% through the first three quarters of the year as energy prices have soared globally.
Citi and its research partner surveyed 2,327 global corporates for its Supplier & Large Corporate Survey as part of this report. This survey garnered powerful insights into the challenges facing companies large and small around the world, from which five themes emerged:
- Rising prices and rising interest rates have had impact as corporates take steps to boost financial supply chain resilience
- Corporates and their suppliers want to strengthen relationships and broaden their supplier base to mitigate further disruption
- Pandemic disruption has given way to geopolitical tension as the primary threat to supply chain funding stability
- Despite economic headwinds, respondents remain optimistic about the prospect for export growth
- ESG remains an area of focus, but lack of clarity has impeded meaningful progress.
Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in more than 160 countries and jurisdictions, providing corporations, governments, investors, institutions and individuals with a broad range of financial products and services.