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Stockpiling our way into recession

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Companies are stockpiling products out of fear of shortages due to the Millennium Bug, according to a report by the Cranfield School of Management. Firms are building up stocks of raw materials and finished goods in preparation for the Y2K menace, the report revealed. Of the 500 organisations questioned, 70 per cent said they were worried about disruption and 60 per cent said they were already stockpiling. But this may cause a boom and bust scenario to hit the economy due to this distortion in company purchases. "Since organisations are simply increasing levels of raw materials and finished goods to offset perceived uncertainty in the supply of goods and materials, there may be a boom in the second half of 1999 followed by a bust in early 2000," according to the report. ®

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