By Gary Lendermon
Geopolitical shocks are pressuring the United States economy, primarily through threats to global supply chains and input costs, inflation, and volatility in the global energy market. Rising regional instability in the Ukraine-Russia conflict and the Middle East, coupled with US-China tensions, transfers risk and volatility to global supply chains and input costs, inflation, and energy costs.
Ukraine-Russia and Middle East instability are transforming inputs and market prices (OPEC+ oil production cuts), supply chain disruption, risk premiums, and slowing world economic growth. Global logistics, trade deterioration, and high infrastructure utilization also contribute to the slowing. Increased global risk and pressure also slow world economic growth, changing trade flows, slowing supply chains, and growing trade disputes.
Geopolitical risks are transforming key sectors in Memphis, such as manufacturing and agriculture, suppressing consumer spending and exacerbating high inflation. Geopolitical risks, war risk premiums, and market volatility lead to inflation and rising energy costs.
Supply chain shocks and pressures, complex trade, increased complexity. Rising protectionism and deglobalization, trade vulnerability, and making supply chains more resilient. Global input costs, inflation, risk premia, and market volatility (renewed inflation) restrain consumer expenditure and reduce regional economic growth.
Memphis and the Mid-South: The Specifics
Higher input costs will affect the Memphis regional agriculture industry (fertilizer availability, high prices). Further risks include supply chain bottlenecks, logistics market congestion (barges, rail, air), and infrastructure strain. Semiconductor shortages, energy prices, food and agricultural input prices (reduced fertilizer imports from Ukraine), and labor supply challenges compound the pressure.
TN is vulnerable as a US border state, a leading logistics hub (Memphis), and a manufacturing hub (automobiles). Manufacturing labor markets will continue facing the brunt of geopolitical risk and shocks, transforming labor markets.
Global logistics and trade shocks will risk Memphis, impacting commerce and employment. Consumer expenditure, the primary market for Memphis, will continue facing high inflation, thereby reducing spending and growth.
These geopolitical risks will continue negatively impacting the Memphis economy, especially in the logistics, manufacturing, and agricultural sectors. They will pressure consumer spending and exacerbate record-high inflation.
Disclaimer:
The views and opinions expressed in this article are those of the author and are based on publicly available information and research from third-party sources, including:
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