The bottlenecks of the
supply chain they will have a devastating impact on the economy. This is how the Bank of Spain estimates it, which has published a report this Thursday in which it highlights that the shortage will cost between two and three tenths of GDP this year and between five and nine tenths in 2022. An impact that translates, in the worst-case scenario, into a loss of some 13,500 million for Spain in the two years as a whole.
The supervisor highlights in the document that this phenomenon is affecting “in a very heterogeneous way the different branches of activity”, being the automobile sector, “where many manufacturers have been forced to paralyze or cut their production plans”, one one of those most affected by this collapse.
In the case of the motor vehicle sector, the ‘magnitude of the shock is defined as the difference between the average global vehicle production forecasts for 2021 and 2022 that IHS Markit has recently made. These analyzes imply a global shock for this sector, according to the Bank of Spain, of approximately –9% in the second half of 2021 and –7% in 2022. The high exposure of Spain to this sector, which has a weight close to 10% of GDP, makes it especially sensitive to this stoppage and, according to the organism itself, explains the high impact of the shortage in the cutback of the Spanish economy.
The Bank of Spain also recalls that the “tensions” in the energy market and the shortage of raw materials have also had a negative impact on other industrial sectors. As has been published by ABC, Spain is losing industrial muscle during this crisis, and the stoppages are a constant in this sector of high added value for the economy.
The institution recognizes that in these
branches of activity There are no such detailed indicators on production as in the automobile sector, but even so, it calculates that «an increase of 1 percentage point (pp) in the indicator of shortage of material and / or equipment in one of these sectors translates into a fall of its production of approximately 2.3 pp after three or four quarters.
“Therefore, in the current context, this implies negative global shocks to the activity of these sectors that vary between 5% and 6% of projected production in the absence of shocks,” according to the institution. The forecast is that this industrial collapse will spread to the rest of the economy by the “drag effect” between sectors and by the high economic interconnections that exist today on a global scale.
How long will the shortage of materials last? According to the document, the shortage will continue throughout this year and the first three quarters of 2022. That is, it will last longer than initially thought.