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
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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.
Global disparity in robot density in the manufacturing industry shows the potential for further investment
Source: World Robotics 2021. Robot density nearly doubled globally – International Federation of Robotics (ifr.org) .
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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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