In a new blog post, the Bank of France introduced the publicly available Global Supply Chain Tension Index, which separates transportation disruptions from shortages of critical intermediate inputs to assess their differing economic effects. Its analysis finds that both types of shock reduce inventories and activity and raise inflation, but input production disruptions cause more persistent declines in manufacturing and longer lasting inflationary effects. Transportation shocks are shorter lived, with inflation returning to its preshock level after two years. The regularly updated index combines an empirical model with narrative evidence and uses monthly data from January 1969 onward. Applied to the Middle East conflict, it shows transportation and input production tensions beginning to emerge in April and strengthening through May and June, although overall supply chain pressures had been below their long-term average. The Bank of France assesses that the closure of the Strait of Hormuz could produce delayed and persistent inflation through petrochemical and other critical input shortages, potentially affecting central banks’ policy responses.
2026-08-11Bank of France
Bank of France launches supply chain index separating transportation and input production disruptions
The Bank of France launched a public index that distinguishes transportation disruptions from critical input shortages. Its analysis finds that input production shocks have more persistent effects on manufacturing and inflation, while transportation shocks are shorter lived. The index shows both forms of tension strengthening amid the closure of the Strait of Hormuz.