European supply chain risk down in second quarter

The Q2 Risk Index from the Chartered Institute of Procurement and Supply (CIPS) has found that supply chain risk in Europe is down in the aftermath of France’s election of Emmanuel Macron as president. The index, which analyses socio-economic, physical trade and business continuity factors contributing to global supply chain risk, is a composite indicator of pressures affecting supply chains. Its calculations reveal western and central Europe’s contribution to global supply chain risk fell to 29.94% in the second quarter of 2017 compared with 30.14% in the first. 

The CIPS attributed this largely to the French election result, which they say brought greater clarity “following fears that Macron’s main opponent, Marine Le Pen, would withdraw France from international trade agreements and the EU”. Other factors behind the decreased risk figure included the EU’s trade deal with Japan, which will remove trade barriers in key sectors.  

“European economies are performing well, and the EU is capitalising on new opportunities for trade deals, as shown by the recent agreement with Japan,” CIPS economist John Glen said of the findings. “This is good news for supply chains in the Eurozone, but the threat of populism to the European project remains in the background.”