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Economists: China's lockdowns could further disrupt global supply chain

Supply Chain Delay Holiday Shopping
Posted at 5:51 PM, Mar 29, 2022
and last updated 2022-03-30 08:20:25-04

COLORADO SPRINGS — A surge in COVID-19 cases is prompting China to shut down its largest city to slow the spread.

Shanghai has begun a two stage lockdown that could further disrupt the global supply chain.

UCCS Economist Joe Craig says the ripple effect could be at your neighborhood grocery store.

"Prices will go up slightly. How much we notice it depends on how long it lasts and how quick they jump back because there is always a surplus in the supply chain," said Craig.

It could also impact how many favorite staples are available.

"Necessities you might see right away to some extent but a lot of firms worry about repeat business and if they see a lot of volatility in prices immediately then you won't get repeat business," said Craig. "If prices are allowed to fluctuate more, you'll see less shortages. If prices aren't allowed too, you'll see firms run out of things faster."

Craig says it could also force local businesses to raise prices to compensate for the price they pay to purchase the things for us.

"Consumers will eat part of that but producers will take part of that in the shipping and hiring costs and get less of a profit margin they end up selling," said Craig.