Study: Covid Has Brought About a Less Connected World

Pandemic led to a 30% drop in cross-border supplier links. BIS analyzed supply-chain links from 34,000 companies.

Bloomberg

February 27, 2023

1 Min Read
A CoreSite engineer testing a cross-connect for acceptable light loss at the company’s data center in Chicago.
A CoreSite engineer testing a cross-connect for acceptable light loss at the company’s data center in Chicago.CoreSite

 

(Bloomberg) -- The Covid pandemic led to a 30% drop in cross-border links between companies and their suppliers, but higher shipping volumes from more resilient producers cushioned the fallout, the Bank for International Settlements found.

Companies worldwide had fewer supply-chain relationships with other firms two years into the pandemic than at its outset, data for some 34,000 companies and 450,000 maritime shipments to US consignees showed, according to a study the Basel, Switzerland-based institution published Monday.

While almost all US companies recorded a slump in international suppliers during the first quarter of 2020, shipping volumes of the remaining ones expanded above pre-pandemic levels by the end of the year. 

During the same time, the number of suppliers also rebounded for almost 40% of the economy. Notable exceptions were the electronic components and consumer discretionary — appliances, cars, furniture — industries, where the number of shippers stayed below pre-pandemic levels until after 2020.

The study also found that equity investors paid close attention to lockdown announcements in countries that firms had ties to, resulting in stock prices of globally integrated companies dipping 1.5% more in the week after an announcement than those of unconnected peers.

Related:A New York Hospital ‘Pivoted’ for COVID-19; IT Had to Keep Up

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