The Belgian economy is experiencing increased costs because of supply shortages as well as logistical issues, which is a result of the war in Ukraine, as per the data shared by the National Bank of Belgium. But not all industries are affected equally.
The National Bank of Belgium mentions a recent study conducted by leading industry groups & federations, who conducted a joint ad hoc survey of Belgian companies and self-employed people.
The results disclose that very few Belgian companies had any direct trade with Russia. Of the companies that were part of the survey, only 0.7% of sales and 1.6% of supplies were linked to Russia or Ukraine before the start of the war.
Some companies have been directly impacted. Companies involved in manufacturing, transport, logistics, and agriculture often deal directly with Russian companies, making them more sensitive to international sanctions and supply shortages.
The data shows that the exposure of Belgian companies to Russia and Ukraine scales with the number of employees the company employs.
Around 30% of companies with more than 50 employees made sales to either country, compared to just 6% for companies with fewer employees. On average, only 5% of companies in Belgium sold products to Russia.
Belgium companies are still reasonably dependent on Russian supplies. 34% of large companies surveyed, and 12% of small companies sourced materials directly from Russia.
Belgium experienced a strong recovery following the pandemic in Oct 2021, but supply problems weighed upon the activities of Belgian companies. Before the start of the war, these issues looked to be all but resolved, but this trend has now quickly reversed.
An increasing number of companies surveyed stated that they were experiencing “moderate” and “severe” supply problems. Almost all sectors of the Belgian economy are experiencing supply issues, particularly those industries reliant on imported shipments.
Nearly two-thirds of the manufacturing, wholesale, and construction companies were disrupted in March. That accounts for over half of non-food retail and a third of agricultural companies.
The war in Ukraine is not the only thing affecting supply issues. China’s pursuit of “zero Covid” has paralysed supply chains. The large industrial hub of Shanghai has been completely locked down, causing mass food shortages and shutting down factories.
Nevertheless, data suggest a strong negative impact of the war in Ukraine and international sanctions on the international supply chain.
