Fiscal Cliff threat had negative impact on independent shippers

Business owners continue to have low expectations about the future of the economy

By ·

While many large retailers were expressing relief that the “fiscal cliff” had been avoided last week, smaller shippers were less than content.

Indeed, IHS Global Insight economists suggest that the impact of such a threat has yet to be measured. According to the National Federation of Independent Business (NFIB) Small Business Optimism Index optimism remained at recessionary levels in December with just a half-point increase in the index over November.

“Business owners continue to have low expectations about the future of the economy,” said Leslie Levesque, senior IHS economist. “Only three of the ten index components were down, but still, there were no major improvements in the remaining components.”

Two of the down categories were related to employment conditions. The net percent of owners adding to their labor force in the last three months fell 1 point to -2%, and plans to hire in the next three months fell 4 points to a net 1%. Skepticism about future business conditions is likely behind the reading, as those reporting under-qualified applicants as an issue behind filling positions fell for a third consecutive month. 

Business owners continue to report growing inventories, however they are feeling more satisfied with their current levels than in November. A net -4% are planning to add to stocks in the next three to six months, a point higher than in November.

Economists said that with no additional information on how the fiscal cliff would play out before the December reading, it was tough for small business owners to give a positive report on their sentiment.

Levesque noted that the small improvements here and there were not enough to boost the overall outlook.

“It is still tough to tell how small business owners will react in January since the resolution of the fiscal cliff,” she said. “It is likely that many were not fully satisfied with the outcome.”

Jerry Hempstead, principal of Hempstead Consulting, in Orlando, Fla., said in an interview that the legislation did not include any fixes for the USPS.

“So the cliff really meant nothing for the parcel carriers and or shippers,” he said.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at pburnson@peerlessmedia.com.

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