A new “global supply chain pressure barometer“from the Federal Reserve Bank of New York suggests that” global supply chain pressures, although historically high, have peaked and may begin to moderate somewhat in the future.

If so, it would ultimately be good news for the economy. However, it is less certain that there is significant short-term support for commercial real estate.

Here’s how the New York Fed describes the index, which it calls the Global Supply Chain Pressure Index, or GSCPI:

“To estimate our GSCPI measure, we thus have a set of data of twenty-seven variables: the three country-specific supply chain variables for each of the economies in our sample (the euro zone, China, Japan , South Korea, Taiwan, United Kingdom and United States), the two global shipping rates and the four price indexes summarizing air freight costs between the United States, Asia and the Europe. All of these variables are adjusted for demand effects to the greatest extent possible, as described previously.

Like CNBC notes, the metric “combines several of Wall Street’s favorite supply chain metrics in a built-in too.

The New York Fed combines the data and then normalizes it. The result is monthly numbers where zero represents the average value of the index over time (suggesting that the average can and will change, so the average of two months ago may differ from the average. current).

Non-zero numbers indicate standard deviations from the mean: positive values ​​are standard deviations above the mean, and negative values ​​are standard deviations below the mean.

Among the components, the Fed noted that container shipping rates rose faster than during the resumption of the global financial crisis. Shipments of raw materials such as coal or steel increased more in line with the recovery of GFC. Air freight costs rose sharply in 2020 as airlines cut capacity in response to the pandemic.

The news is good in some ways. Transportation costs and delivery times have a significant impact on overall costs and availability. The improvement here takes the pressure off all industries, including real estate.

But the effect may be limited when it comes to CRE as it is built. Transportation costs and speed don’t matter if raw materials are still not available. Timber prices continued to rise as have other construction amenities, such as structural iron and steel, cement and concrete, and HVAC equipment.

“At today’s lumber market prices, the cost of logistics doesn’t matter,” Mike Wisnefski, CEO of MaterialsXchange, told GlobeSt.com. “If space availability was the issue, then supply would be limited, adding fuel to the already hot market.”

And then there is the labor shortage which weighed heavily on the industry. While you can get the materials today, you need people to put them together. Hope the Fed is right. Now if the rest of the landscape can catch up.