Feb 11, 2020 - Economy & Business

"Tectonic shift" in supply chains already happening

Dion Rabouin, author of Markets

Cranes load freight cars with scrap metal in Dresden, Germany. Photo: Jens Büttner/picture alliance via Getty Images

Supply chains, even for companies outside of China, are in motion already as businesses rethink their strategies in a new global environment.

Driving the news: A new survey of analysts who cover more than 3,000 companies from Bank of America Securities is finding a "tectonic shift in global supply chains."

  • Companies in more than 80% of 12 global sectors, representing $22 trillion of market cap in North America, Europe and Asia-Pacific (excluding China), have "implemented or announced plans to shift at least a portion of their supply chains from current locations." (Emphasis theirs.)

What's happening: Companies say tariffs and the U.S.-China trade war have helped prompt this reassessment, but it's largely based on automation, which has made the labor-cost benefit of outsourcing and offshoring less attractive.

  • Automation was cited as a key enabler of shifting supply chains by 90% of respondents.
  • Outside of financial considerations, BofA found companies worried about national security and "ESG concerns of high carbon footprints associated with long supply chains and potentially problematic employment practices."

Watch this space: Many companies said they were considering locations in India and Southeast Asia, but companies in about half of all global sectors in North America declared an intent to "reshore" or move business back to North America.

  • "This was particularly true for high-tech sectors and industries for which energy is a key input. If borne out, this could represent the first reversal in a multi-decade trend," BofA's global research team said in the note.

What it means: The shift could mean bigger investments by North American companies at home rather than abroad, including increased spending on automation and manufacturing that "would have multiplier effects on the broader economy and be beneficial for financial services that cater to them."

Go deeper: The slippery slope of supply chain fears

Go deeper

Updated 4 mins ago - Science

Live updates: SpaceX attempts to launch NASA astronauts Saturday

SpaceX's Falcon 9 rocket on the launch pad. Photo: NASA/Joel Kowsky

At 3:22 p.m. ET today, SpaceX is expected to launch NASA astronauts Bob Behnken and Doug Hurley to the International Space Station for the first time.

Why it matters: The liftoff — should it go off without a hitch — will be the first time a private company has launched people to orbit. It will also bring crewed launches back to the U.S. for the first time in nine years, since the end of the space shuttle program.

Follow along below for live updates throughout the day...

In photos: We've seen images like the protests in Minneapolis before

Photo: Kerem Yucel/AFP/MPI/Getty Images

The photos of protests around the country following the death of George Floyd during an encounter with Minneapolis police are hauntingly familiar. We’ve seen them many times before, going back decades.

Why it matters: "What is also unmistakable in the bitter protests in Minneapolis and around the country is the sense that the state is either complicit or incapable of effecting substantive change," Keeanga-Yamahtta Taylor, an assistant professor of African-American studies at Princeton University writes in the New York Times. The images that follow make all too clear how little has changed since the modern Civil Rights Movement began in the 1950s.

Updated 29 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 11 a.m. ET: 5,968,693— Total deaths: 365,796 — Total recoveries — 2,520,587Map.
  2. U.S.: Total confirmed cases as of 11 a.m. ET: 1,749,846 — Total deaths: 102,900 — Total recoveries: 406,446 — Total tested: 16,099,515Map.
  3. Economy: The future of mobility in the post-pandemic worldGeorge Floyd's killing and economic calamity are both part of America's unfinished business.
  4. Supreme Court: Chief Justice Roberts sides with liberals in denying challenge to California's pandemic worship rules.
  5. Public health: Hydroxychloroquine prescription fills exploded in March.
  6. 2020: North Carolina asks RNC if convention will honor Trump's wish for no masks or social distancing.
  7. Business: Fed chair Powell says coronavirus is "great increaser" of income inequality.