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Inflation: Momentum or Reversion to the Mean

With headline inflation at multi-decade highs investors are rightly concerned and it bears an in-depth look. Some of the drivers of price rises have persisted longer than the Fed expected. But looking beyond the headlines at some of those drivers of the last twelve months could be useful.

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Supply Chain in a Post-COVID-19 World

The global health pandemic and economic shutdown present unparalleled challenges to the global economy. The consequences of the financial collapse were far-reaching, exposing vulnerabilities of supply chains throughout the global economy.  Recently, the disruptions at the Suez and Panama Canals created global port congestion, a shortage of shipping containers and rising costs of goods. As a result, we anticipate manufacturers will hold more inventory on or near their facilities, increase domestic production and reduce reliance on global supply chains moving forward. We believe this will result in increased demand in the U.S. for logistics real estate in addition to secular shifts like the continued growth of online retailing. “Disruptions can be a negative for companies who are unprepared to adapt to supply chain challenges, or an opportunity to differentiate if a company can secure goods when consumers need it most,” indicated Melinda McLaughlin of Prologis. “In general, most Prologis customers view these disruptions negatively due to lost sales, increased difficulty of planning and volatile prices.”

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