Liquidity trapped in supply chains hits highest level in a decade, research finds



Eleanor Wragg | Global Trade Review

The amount of cash held up between corporates and their suppliers hit a record high in 2020 as the Covid-19 crisis upended supply chains and stalled consumer demand worldwide, leaving firms with excess inventory levels. This is among the key findings in the 2021 edition of JP Morgan’s Working Capital Index report, published this month.

The annual report, which analyses the working capital metrics of companies listed on the S&P Composite 1500 index, found an estimated US$507bn of liquidity was trapped within the supply chains of the S&P 1500 companies as at the end of last year, the highest level in 10 years and a marked increase on 2019’s figure of US$497bn.

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