Economic gains are sometimes more of a concept than reality

Not long ago, we heard a lot about an improving housing market and automotive sales on the rise, which clearly both bode well for economic growth. Both these developments are still occurring, which is great, but it is still not close to being good enough, is it?

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Here we go again. Actually, we may have never truly stopped. These sentiments speak to the always changing (but not really…) nature of the economy.

Not long ago, we heard a lot about an improving housing market and automotive sales on the rise, which clearly both bode well for economic growth. Both these developments are still occurring, which is great, but it is still not close to being good enough, is it?

I say this, because it is occurring against the backdrop of a still-largely confusing economic outlook in many different ways, including unemployment, fluctuating consumer confidence (a metric which many have less than great faith in), too low GDP, and, not to be forgotten or overlooked, our friends in Congress doing less than nothing more often than not. Perhaps that is the “new normal” sadly enough.

What’s more, the headlines are not all that encouraging either. Consider this one from The New York Times last week: “Gloomy retailers stir new doubts on economy.”

The headline nearly tells the story itself. In short, it explains that many, or most, United States consumers are only spending money on essential items, especially true for lower income ones.

What’s more, it also highlighted how upper income consumers are also relatively quiet, when it comes to making purchases. And as things stand, the article observed that back to school sales may not provide the spark truly needed to bring about a sea change in demand or improved sales.

Not too many people know this better than logistics and freight transportation services providers whom likely know more about demand planning than most.

This has been evident when talking supply chain executives, too.

Most note that things have not changed materially in the last year or more, given that every time it “seems” like things are turning the corner, they flatten out and bring it all back to right where we are. After five years or so of this, I am pretty sure we all know the drill.

I don’t want to sound so sour about all of this, but facts are facts. We are nearly into September and people are still waiting for that spark to get things going and get the economy truly back into gear.

It is going to take more than words for that to happen, but with so many people struggling to make ends meet, chances are something “big” is likely to occur later than soon, it seems.

Shippers are clearly wise to this premise, too, considering that many are trading down modes to get the most bang for their buck. And who can blame them with demand still very flat?

In the meantime, 3PLs and carriers continue to strive to create value for their customers. This is happening though inventory management, cloud computing, dedicated trucking and many other things, too.

As mentioned in this space before, soft economies are a great time to retool and keep learning. That might be the top scheme in the play book again, at least until things finally pick up for real.

 


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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