Welcome to our exchanges at Goldman Sachs Markets Update for Friday, March 26.

Each week we check in with a leader across the firm to get a quick take on what they're watching in markets.

This week we're looking at global supply chains, a topic that's much in the news, and what the

problems and issues there mean for producers, consumers, and the economy.

I'm Jake Stewart, Global Head of Corporate Communications here at the firm,

and today I'm delighted to be joined by Joseph Briggs, an economist at Goldman Sachs Research

who recently published a report looking at this

topic specifically Joseph Walker in the program.

It's great to be speaking with today Jake. So Joseph the problems with global supply

chains began pretty early in the pandemic when manufacturing facilities

in China just shut down and we all went scrambling for some basic goods.

A year later, the disruptions in supply chains are still wreaking havoc but it's a little different.

So help us understand the nature of the challenges facing supply chains and what's

changed since the pandemic began.

Yeah, we've really seen two distinct supply chain stories play out over the last year, Jake.

The disruptions from last spring are pretty easy to understand since it's hard to get parts and

inputs from factories in China that are completely shut down.

The current disruptions are a bit more complicated and a bit more tied to the overall macro picture.

So last spring, a lot of manufacturers started to cut back on production because they expected that incomes and spending would fall the way that they typically do in a recession.

Instead, the opposite happened. Income surge due to generous fiscal support and spending on goods actually picked up quite a bit because

households had money to spend but the normal consumer services that they would spend

on were largely unavailable. The good news about the surge in good demand is that it led to a quick recovery for the manufacturing sector.

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