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Continuing Disruption

Supply chain disruptions will continue to create uncertainty in the real economy well into next year. This is not my usual Week in FinTech overview. But how current supply chain problems are likely to affect the economy in the coming year made a greater impression on me this week than any of the payments, wealth management, cryptofinance, and related regulatory topics I typically follow. The impression came less from the ongoing media reports on supply chain issues—here’s a list—but from an association client’s annual meeting. This association represents contractors in a highly specialized and technical segment of the construction industry.

The post Continuing Disruption first appeared on FinTech Rising.

Supply chain disruptions will continue to create uncertainty in the real economy well into next year.

This is not my usual Week in FinTech overview. But how current supply chain problems are likely to affect the economy in the coming year made a greater impression on me this week than any of the payments, wealth management, cryptofinance, and related regulatory topics I typically follow. The impression came less from the ongoing media reports on supply chain issues—here’s a list—but from an association client’s annual meeting.

This association represents contractors in a highly specialized and technical segment of the construction industry. These contractors and the vendors that support them work with architects and interior designers. Both contractors and vendors rely on raw materials to manufacture the chemical, metal, and stone products they need.

Raw material lead times have just gone crazy, one vendor said. Nearly everyone in the meeting described the supply situation as day-by-day or brutal.

Specialty metal, especially brass, is available but with lead times that vary between 8 and 50 weeks. Silica-based products (yes, processed sand) arc also extremely tight as a result of a U.S. plant shut down by an accident and trade restrictions on a Chinese plant stemming from human rights violations.

Trucking costs are higher as well. Contractors and vendors both add surcharges or limit free shipping. Yes, that means costs will increase, adding to the inflation that we read about in nearly every economic news cycle.

Everyone is looking for alternatives. Contractors are trying to find other ways of building their product. Vendors are trying to find new suppliers.

None of the supply chain problems are expected to improve until late 2022. Industry participants are calling for more frequent communication and continuing partnership, hopefully drawing the community closer together and resulting in greater innovation.

Financial services and the technology that seeks to improve them may not be directly affected by these kinds of supply-chain problems. I expect that the rising costs-inflation-and general uncc1tainty will make financial markets in the coming year even more volatile.

Tell us what you think in our FinTech Trends 2022 Survey. What linkages do you see between the supply chain, inflation, and FinTech?

For more on how supply chains work and affect everyday lives, listen to Marketplace’s Temporarily Unavailable series.

 

Source: http://www.fintechrising.co/continuing-disruption/

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