Supply chain snapshot: uncovering opportunities despite disruption

11/05/2022

Summary

Quick answers to some of the most common inflation questions, including how investors can fight inflation.

From bridges to broadband: building opportunities in infrastructure debt

by | 25/05/2022
Navigating rates

Summary

Propelled by governments’ bid to support the economic recovery from Covid-19, booming demand for digital services and the push to a greener economy, infrastructure spending is ramping up. That should create opportunities for institutional investors seeking stable, long-term cash flows.

Key takeaways

  • As a portfolio diversification option, infrastructure debt has much to offer investors and the long-term prospects look strong: USD 94 trillion of investment is needed by 2040
  • While transport infrastructure is gradually shaking off the effects of the pandemic, rising interest rates will present fresh challenges for companies and projects
  • Batteries, hydrogen and biofuels are areas to focus on within the green economy as such investments are usually financed by debt
  • Digital infrastructure offers significant opportunity as countries like Germany and the UK catch up in the shift to fibre-optic broadband

Click the icons below for quick answers to some of the most common supply chain questions.

Geopolitics are creating new flash points

The invasion of Ukraine is an extreme example, but the emergence of two preeminent global ecosystems (centred around the US and China) could hasten supply chain reorganisations and even lead to reshoring.

Covid-19 hit manufacturing, too

A short-lived drop in demand caused manufacturers to scale back production. When demand picked up again, it was hard to keep pace, which pressured delivery times and prices.

Deglobalisation in some sectors is gaining steam

Amid ongoing trade disputes, protectionism is rising and countries are looking to be more selfsufficient. China is pushing consumer spending at home while continuing to promote its manufacturing prowess internationally.

Other unexpected events

Supply chains have been hit hard by severe floods in Europe, a winter storm in Texas and a six-day blockage of the Suez Canal, a major shipping artery.

Booming data centres

These facilities are in high demand, thanks to increasingly complex supply chains, growth in online shopping and the work-fromhome revolution.

Growth in agricultural tech

Soaring food prices mean more interest in food security, opening the way for more investment in agricultural technology and water irrigation equipment.

A surge in renewable energy

Surging hydrocarbon prices and sanctions against Russia will likely mean increased focus on renewable energy – not just in Europe, but around the world.

A robotics revolution

Businesses are turning to robots to find new ways to move goods to customers, and to future-proof their operations against supply and cost risks.

 

Commodities have fared well when inflation is high, can smooth returns

Source: World Robotics 2021. Robot density nearly doubled globally – International Federation of Robotics (ifr.org) .

 


Learn more: For more insights into supply chain disruption, read "Unpacking opportunities from supply chain innovation", available here: www.uk.allianzgi.com/supplychains  

 

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