Euro area: Supply chain risks and core goods outlook – Societe Generale - tmgm.com

Societe Generale economists Sam Cartwright and Michel Martinez analyze how renewed supply chain disruptions, including conflict in the Middle East, may affect Euro Area prices. Using an adaptation of the New York Fed’s Global Supply Chain Pressure Index for Europe and Asia, they highlight still-elevated pressures, firmer demand and a projected peak in Euro Area non-energy industrial goods inflation at 1.8% in 2H27. "Following the Covid pandemic in 2020-21 and the supply chain disruptions triggered by the war in Ukraine since 2022, the recent conflict in the Middle East has renewed concerns about the resilience of European supply chains." "In this note, we try to quantify the degree of supply pressure in Europe and its impact on inflation.