Supply chain expert on 2022 outlook – new video uploaded to AP Video Hub

In the video, Iyer explains how the Omicron COVID-19 variant and shutdowns in China may impact the supply chain, and the effects these may have on inflation. All videos in the Campus Insights series are free for download and use by all AP members and can be found at apvideohub.ap.org or by doing a general search on the Associated Press site. AP members may use the video or to pull quotes for print article or for broadcast or podcast.

STORYLINE

Iyer says that Omicron is spreading quickly, which impacts worker availability and, by extension, product variability. This forces businesses to choose between reducing the variety of products they offer or declare that they are out of stock. Iyer says that China’s solution to the rise in Omicron cases is to lock down areas of the country, potentially impacting production. He points out that by this time of year, many Chinese companies have built up their stock due to the Chinese New Year, when many of them shut down anyway. As a result, he predicts that if there is an effect, it will be delayed. On inflation, Iyer says that rising prices might be mitigated so long as major industries remain competitive. The more competitive the industry, the more likely that firms will absorb the hit rather than pass that cost along to consumers.