Disruptions in supply chains - Business views

During the summer/early Autumn 2021, BusinessEurope ran a survey among its members to identify risks and challenges European businesses face in the context of global supply chains. Many of the risks and challenges identified in the questionnaire are related to COVID-19 and the response to the pandemic but others were already present before or have been reinforced by the crisis.

Main risks/challenges identified by companies

Mostly as a result of COVID-19 and related actions

• Shortages in raw materials, and the consequent increase in price, is a significant concern for many sectors in Europe, from steel to paper and from pharmaceuticals to engineering.
• Shortage of electronic components due to high demand for household electronic goods.
• Delays at border crossings as well as increased transportation costs, namely due to limited storage capacity in vessels and containers.
• Mobility of personnel remains an important challenge for many companies. Important operations, for instance maintenance and initial set-up of operations depend on in-person contacts.
• Cost increase that, depending on sectors, could have more temporary or long-term impact.
• Inflation and stagflation trends.
• Lack of preparedness for the unexpected disruptions and lockdowns at company level, especially SMEs.

Reinforced by COVID-19

• Stronger role of the state in the economy leading to increased protectionism, including for instance national content requirements in financial stimulus packages in third countries.
• Increased securitisation of trade policy with further use of export restrictions and export controls.
• More legislation that favours data localisation and restrictions to cross-border data flows.
• Lack of harmonised standards with more countries favouring national to international standards.
• Adoption of legislation to ensure compliance with sustainability standards and due diligence requirements in global value chains.