Russia-Ukraine Conflict At a time when businesses and industries around the world were still reeling and recovering from COVID-19, Vladimir Putin decided to invade Ukraine in February 2022. With that, came consequences that still exist today, which are disruptions to supply chains around the world and, according to economic analysts at KPMG, continues to have a direct impact on inflation.
Consider this: almost 375,000 businesses worldwide rely on Russian suppliers— 90 % of which are based in the United States. More than 240,000 businesses worldwide rely on Ukrainian suppliers— 93 % of which are based in the United States, according to Dun & Bradstreet. Analysts for the firm say that exposure of this magnitude has and will persist in impacting the construction space in three areas: aluminum, steel and timber.
In addition, the war is still having an effect on crude oil prices because of its importance to manufacturing, transportation and other raw materials. Coupled with the ban on Russian petroleum or the cutoff of Russian supplies, the situation is exacerbated.
To lend perspective, on April 12, 2022, crude oil was trading at $ 104 per barrel, up from $ 90 per barrel on February 18, 2002. Today, prices have come down considerably but are still trading at $ 78 per barrel.
Other factors that are influencing construction material prices are, according to Dun & Bradstreet:
• Voluntary / strategic suspension of shipments. More than the price of fuel, the disruption of trade routes related to the conflict have presented its own set of challenges. Cargo ships have been halted or delayed; flights are being cancelled or rerouted, which affects cargo capacity and continues to affect global supply chains, ultimately opening up additional risks surrounding various products.
• Bans affecting the supply chain. Many countries( including the U. S.) have
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