The economic fallout from the war in Ukraine will reach far beyond the countries involved. In its April 2022 World Economic Outlook (WEO): War Sets Back the Global Recovery, the International Monetary Fund (IMF) cited the conflict as the primary reason for the slowing of global growth the institution now predicts. While recovery from the COVID-19 pandemic in 2021 was slightly stronger than expected, it is still in progress, with recent lockdowns in China slowing manufacturing and further disrupting supply chains. In addition, the prospect of new SARS-CoV-2 variants continues to pose a threat to the global recovery.

Anticipation of shortages in the wake of the Russian invasion of Ukraine has driven up commodities prices. The regions that will be most affected are the Caucasus and Central Asia, Europe, the Middle East, North Africa, and sub-Saharan Africa. Russia is a major global supplier of gas, metals, and oil. Russia and Ukraine are large producers of corn and wheat, together accounting for almost 30% of the worldΓÇÖs wheat exports. The price hikes of these commodities are anticipated to exacerbate inflation; the WEO has increased 2022 inflation projections for advanced economies, and emerging market and developing economies to 5.7% and 8.7%, respectively.

The consequences of the war to Ukraine’s economy are unsurprising—it will take years for the country to rebuild from the deaths, destruction, and fleeing of its people brought on by the invasion—and the WEO predicts a 35% plunge in the Ukrainian economy for 2022. Trade and financial sanctions will act to depress Russian GDP by 8.5%. Many European countries have begun to reduce their reliance on Russian energy, an act that will continue to affect the Russian economy beyond the short term. The war is expected to affect Europe most via higher energy prices, with emerging and developing European economies also experiencing trade disruptions. In advanced European economies, some industries already suffering supply-chain interruptions are predicted to be further hampered by the war and sanctions.

Higher food prices—especially that of wheat—restrict growth in the Caucasus and Central Asia, the Middle East, and North Africa. The Middle East and North Africa are also expected to be affected by a decrease in tourism. However, oil exporting countries will benefit from higher energy prices. On balance, the WEO anticipates 4.6% GDP growth for the Middle East and Central Asia, up 0.3 percentage point from the January projection. Similarly, the economy of sub-Saharan Africa is largely subject to the warΓÇÖs impact on food and fossil fuel prices. Although political and social unrest also depress the outlook for the region, its economy is nonetheless predicted to expand by 3.8% in 2022, 0.1 percentage point higher than forecast in January.

The main influence on the Asian economy continues to be China. Recent COVID-related lockdowns and restrictions, as well as weak urban employment recovery, have impaired manufacturing, trade, and private consumption in China. Real estate investment has also lost some of its momentum. For the Asian region as a whole, weaker demand and higher commodities pricing will slow growth.

Tightening monetary policy to counter inflation is predicted to suppress growth in North America, with war-related trade disruption and lower demand from the US also coming into play for the US and Canada, respectively. Latin America and the Caribbean are less tied to Europe but will also be subject to Inflation and tightening of financial policy.

With so much uncertainty in the state of international affairs, the WEO points out the challenges of making quantitative predictions for the world’s economy. Nonetheless, some means by which the war and sanctions will influence the global economy can be determined.

On March 15th, 2022—nearly six months late—President Biden signed the FY2022 spending bill. Compared with the previous fiscal year’s appropriations, total federal funding for R&D increased 7.1% to $169 billion. Although many agencies were allocated much less than the Biden administration had requested, all science agencies received increases in funding.

The total budget for all programs of the National Science Foundation (NSF) went up 4.1%, reaching $8.8 billion. The Department of Energy’s Office of Science’s budget received a 6.4% boost to $7.5 billion, and ARPA-E’s funding gained 5.4% to reach $450 million. Appropriations for the USDA’s Agriculture Research Service, which dropped 5.0% in FY2021, this year increased 15.3% to reach $1.76 billion. In contrast, the EPA’s total science and technology budget was bumped up a meager 2.9% to $750 million, with funds designated for Clean Air programs only.

Appropriations for the agency receiving the largest amount of research funding, the National Institutes of Health (NIH), increased 5.3% to a total of $45 billion. Budgets of the most well-funded institutes, the National Cancer Institute (NCI) and National Institute of Allergy and Infectious Diseases (NIAID) grew 5.4% and 4.2% to $6.9 billion and $6.3 billion, respectively. The institutes for which appropriations increased the most include the National Institutes on Aging (NIA), Drug Abuse (NIDA), and Minority and Health Disparities (NIMHD), whose budgets grew 7.8%, 8.2%, and 17.2% to $1.6 billion, $4.2 billion, and $460 million, respectively.

The Biden Administration additionally proposed the creation of the Advanced Research Projects Agency for Health (ARPA-H), to bolster the government’s ability to accelerate biomedical and health research. Although $6.5 billion was requested, the program, which focuses on agile, risky, and transformational biomedical research projects, received only $1 billion. ARPA-H is housed within NIH but the “high-risk, high-reward” program will be culturally and operationally unique from its counterparts, as it strives, per its mission, “to benefit the health of all Americans by catalyzing health breakthroughs that cannot readily be accomplished through traditional research or commercial activity.”

A confluence of factors over the last couple of years has led to a surge in cannabis use in the US and beyond. For one, the cannabis market has been booming for the past several years, as individual states in the US (the largest geographic market for cannabis) have increasingly legalized adult-use and medical cannabis. In addition, the COVID-19 pandemic has boosted consumption of the drug in North America.

As of this writing, medical cannabis use has been legalized in 37 states, the District of Columbia, and four permanently inhabited US territories. Within that group, 18 states, the District of Columbia, the Northern Mariana Islands, and Guam have legalized cannabis for adult use. In the November 2020 election, every ballot measure calling for decriminalization or legalization of cannabis passed, reflecting the publicΓÇÖs growing acceptance of the substance (despite its remaining prohibited federally). In The State of Legal Cannabis Markets, 8^th Edition (released in April 2020), Arcview Market Research and BDS Analytics (now BDSA), estimated 36.5% growth in the US cannabis market in 2019 to $12.4 billion and forecast 38% growth worldwide in 2020, with CAGR 2019ΓÇô2025 of 21.2%.

The COVID-19 pandemic began against the backdrop of this booming industry. In many US states and Canada, cannabis operations were considered essential businesses early in the pandemic, remaining open as establishments closed. A number of surveys have revealed that cannabis use has increased in Canada and the US, often to help relieve feelings of anxiety and isolation that have accompanied stay-at-home orders and other pandemic-related restrictions. Reflecting the surge in consumption, in February 2021, BDSA estimated 2020 legal cannabis sales in the US and globally to have grown 46% and 45%, respectively. BDSA’s September update projects a 41% jump in 2021 sales.

For the analytical instruments industry, these trends translate into considerable opportunity. Although regulations are not uniform across the US, the legal sale of cannabis and cannabis products requires testing for cannabinoids, foreign material, heavy metals, microbial impurities, moisture content, mycotoxins, residual pesticides, residual solvents and processing chemicals, terpenoids, and water activity, for example. As the cannabis market expands and testing regulations are established, the number and capacity of testing labs will increase as well. As the tests required vary by state, the technologies labs need will depend on location. For lab products more generally, testing will drive demand for chemicals, labware, and equipment. Some of this demand will also be fueled by production of cannabis products, which may require processes such as extraction and purification of cannabinoids.

Some of the technologies and their purposes used for cannabis analysis are as follows:

• • Evaporators, grinders, homogenizers, and mills for extraction;
  • HPLC, UPLC, LC-MS, GC-MS: cannabinoid and terpene potency, mycotoxins, pesticides, and residual solvents;
  • ICP-MS, atomic absorption;
  • MALDI-MS, qPCR: microbes.

Although companies in the analytical instrument and lab products industries are well aware of the potential associated with the cannabis market, they might not yet appreciate the scale of the opportunity, particularly in light of the COVID-19 pandemic.

In an August survey conducted by TDA, product shortages and delays in delivery were at the top of the list of market trends scientific researchers were experiencing. The blame for this lies in more than one way in the COVID-19 pandemic. Beginning in March 2020, the scarcity of personal protective equipment (PPE) among health care workers made headlines. This was soon followed by a paucity of lab consumables, which has continued to present, as testing for the virus ramped up. According to one academic researcher, “It is becoming difficult to obtain specific plasticware, tips, or other consumables commonly used for COVID-19 testing.”

The paucity of pipette tips has received particular attention in the media. In January 2020, the FDA added pipette tips and micropipettes to its list of device shortages, estimating them to be in short supply for the “duration of the COVID-19 Public Health Emergency.” In an article published in January of this year, health care improvement company Premier reported that, since May 2020, hospitals’ daily use of pipette tips has grown more than 50%. In addition, average lead time for pipette tips had lengthened to more than 25 days. And the need for pipette tips is not shrinking. NPR reported that the average COVID-19 test requires four tips, and, with the spread of the Delta variant, the Johns Hopkins Coronavirus Resource Center shows the number of daily tests administered to be at about the same level as in January and February of this year on most days exceeding 1 million (and on a few, surpassing 2 million). So-called nonessential labs are also experiencing the delays and product scarcity as they resume activity, even at reduced capacity. Researchers have resorted to washing and reusing pipette tips, running tests in batches, and strategically planning experiments and tests to reduce tip consumptionΓÇöall measures that trade off factors such as time and contamination risk.

To help alleviate the scarcity of pipette tips, the US Department of Defense and Department of Health and Human Services (HHS) has awarded tens of millions of dollars in contracts to companies such as Corning, Tecan, and Thermo Fisher Scientific to step up their production of tips and other lab supplies. However, fulfilling these contracts is dependent on the availability of plastics, which are, in turn, dependent on supply chains and manufacturing ability.

The pandemic has disrupted supply chains around the world. The shutdown of borders has led to customs delays, and container ships are backed up at ports owing to reduced workforce or, in some cases, closure resulting from workers testing positive for COVID-19. After many countries ceased manufacturing and exporting goods early in the pandemic, activity has resumed, only to be faced with shortages of available shipping containers. The addition of stochastic events, such as the Suez Canal blockage in March, or hurricanes and winter storms, has compounded the problem.

The production of plastics, including polyethylene (PE) and polypropylene (PP), has hit some additional snags. Hurricane Laura in 2020 caused several petrochemical plants in Texas and Louisiana to shut down, reducing production in a market already experiencing shortages in PE and PP. According to Plastics Today, facilities forced to close by winter storms in Texas in February of this year accounted for 80%–85% of PE and PP production in the US. Factory fires and force majeure declarations of several plastics manufacturers in Europe and the US have also hampered plastics production.

For an industry already contending with an inefficient supply chain (as reported in SupplyChainBrain), the combination of the surge in demand for, decreased production of, and disruptions receiving lab products, including pipette tips, can have dire consequences. As reported in STAT News, scientists from labs screening newborns for genetic health conditions have spoken out about how the shortage of pipette tips has threatened to shut down parts of some screening programs, putting the health of infants at risk. In a win for these programs, in April, they received higher priority by HHS when ordering pipette tips.

Providers of lab products have been making strides in improving their supply chains. However, despite the resilience and even thriving of some labs, among some researchers, the short-term outlook is grim. “Supply shortages have greatly impacted operations and changed what we can offer to students and how quickly research can be accomplished,” commented one survey respondent. “Students are going to be leaving college with a lot less hands-on skills than what they were before the pandemic.” Asked how the pandemic and resulting economic conditions have affected lab operations, another researcher stated, “Badly. We are almost closed.”