Australian Industry Group predicts supply chain crisis will continue into 2023 and beyond

Australian Industry Group predicts supply chain crisis will continue into 2023 and beyond

Chilling warning EVERYTHING sold in Australia is vulnerable to the supply chain crisis – and it’s tipped to continue for two YEARSAustralian Industry Group predicts supply chain crisis won’t ease until 2023Chief executive Innes Willox noted 98 per cent of jobs dependent on shipping Half of businesses surveyed have endured more problems in 2021 than 2020 By Stephen Johnson, Economics Reporter For Daily Mail Australia

Published: 22:59 EST, 19 December 2021 | Updated: 00:20 EST, 20 December 2021

Virtually every part of the Australian economy is vulnerable to the supply chain crisis that is not predicted to improve until 2023.

An Australian Industry Group survey of 346 CEOs found two-thirds of them had encountered difficulty securing essential goods to run their business.

The manufacturing, construction and service group’s chief executive Innes Willox said almost every job in Australia depended on goods being shipped in from overseas.

‘The Covid-19 pandemic has exposed weaknesses in the operations of global and domestic supply chains and laid bare many Australian vulnerabilities as an island nation with 98 per cent of trade and most jobs connected to or reliant on sea freight in some way,’ he said.

Mr Willox said global lockdowns were likely to prolong the supply chain crisis for at least another two years.

Virtually every part of the Australian economy is vulnerable to the supply chain crisis with an industry group now predicting it won’t ease until 2023. An Australian Industry Group survey of 346 CEOs found two-thirds of them had encountered difficulty securing essential inputs to run their business (pictured is a ship at Port Botany in Sydney)

‘The increase in global demand for goods, lengthy lockdowns and infections of workers, the global shipping container shortage, reduction in shipping services and port skipping, Australian industrial actions, and rising costs, have been creating supply chain chaos, which is not projected to so much as moderately ease until 2023 and beyond,’ he said.

‘These pressures can undermine our economic recovery from the pandemic and ultimately dampen economic growth.’

Federal Treasury doesn’t agree with the Mid-Year Economic and Fiscal Outlook published last week forecasting economic growth of 3.75 per cent in 2021-22.

That is more than double the 1.5 per cent annual pace of 2020-21 which included a recession sparked by the national lockdowns of March 2020.

The update to the May budget forecasts mentioned the supply chain more in the context of other countries.

The AI Group’s survey of 346 private sector CEOs was taken in October 2021, with the companies collectively employing 119,827 people or an average of 378 each.  

The manufacturing lobby group’s chief executive Innes Willox said almost every job in Australia depended on goods being shipped in from overseas

Almost two-thirds, or 65 per cent of them, reported that sourcing goods was harder in 2021 than 2020. 

‘Supply chain problems should be assessed by how essential the goods are to the wellbeing of Australians and how critical they are to the production of an essential good or service whether for domestic consumption or for export,’ Mr Willox said.

Fifty-two per cent of them, expected their ability to source goods for their business would continue to be disrupted in 2022.

‘There are many other reports of individual businesses and entire industries struggling with supply chain pressures, with a dominant view that we won’t see so much as a moderate easing in these conditions until as late as 2023,’ the report said.

The AI Group survey was conducted in October before concerns were raised about the supply of diesel additive AdBlue.

Global supplies diminished after China stopped exports of the key ingredient urea in a bid to contain fertiliser prices. 

The AI Group said 98 per cent of trade and jobs in Australia relied on goods being shipped in from overseas (pictured is a waitress in Sydney)

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