By Jonnelle Marte

(Reuters] – A new index by the New York Federal Reserve released Tuesday suggests that historically high supply chain pressures have reached their peak, which has led to a rise in inflation and a shortage of essential goods.

When China implemented lockdown measures, the Global Supply Chain Pressure Index (GSCPI), soared in the early days of pandemic. As production resumed, pressures decreased but then rose again during winter 2020 when COVID-19 infection spiked.

“More recently the ()”It seems that global supply chain tensions, although still high in historical times, may have peaked” the researchers said in a blog posting.

This index takes into account 27 variables, including shipping costs and freight costs between Europe and Asia. The researchers found that shipping costs have experienced an “enormous increase” since the return to normal from the bottom of the pandemic. However, this growth has slowed in the recent months.

Research also showed that shipping costs for container containers rose faster during recent economic recovery periods than in times of global financial crisis. However, the post-GFC recovery saw the prices of raw materials like steel and coal rise “on the same level,” they said.

Researchers claimed that they had adjusted the index for changes in demand but acknowledged that it is not a perfect measure. However, it likely still represents some demand factors.

This index is based on data from 1997 and shows that global supply chain pressures have increased significantly in recent times than they were during previous periods of stress.

In 2011, pressures rose following two natural disasters: an earthquake in Japan, and floods in Thailand. The U.S.–China trade war of 2017-2018 saw the index rise again. Researchers wrote that these spikes were “insignificant in comparison with what was observed since the COVID-19 epidemic began.”