Subscribe to our free, weekly email newsletter!



Is it time for economic optimism?

By Jeff Berman, Group News Editor
January 07, 2014

With a new year here, it is always good to look at the big picture when it comes to figuring out the economy, which has become an annual event, not to mention an ostensible exercise in futility, too, at times.

But maybe, just maybe, 2014 is different. By different, I mean, perhaps this turns out to be the year where the talk about things getting better becomes an actual reality or action item. Or, even better, could this be the year where we finally shed the perennially exasperating “cautiously optimistic” tag and transition over to simply “optimistic?”

Given that we are barely a week into January, it is way to early to provide a definitive answer, but one thing for sure is that there are at least some signs of optimism out there.

Two notable signs include unemployment figures trending down in the right direction, with some economists feeling good about unemployment coming in at around 6.5 percent in 2014.

To be sure, jobs are the keys to our economy for myriad ways, and should things improve on the employment front, then the subsequent benefits for the economy really can be viewed s obvious. Speaking of which, if you know anyone that wants to be a truck driver, there are certainly jobs available. 

An improving housing market, too, can also go a long way towards rebuilding economic growth and confidence. For instance, in December the United States Commerce Department said that November housing starts rose 22.7 percent, marking its biggest gain since January 1990 at a seasonal adjusted rate of 1.09 million units.

And with housing starts comes people buying these houses and all the things that go into them, which, is, of course, a lot of stuff.

Guess what? These housing starts also translate into a lot of freight and goods moving through all types of supply chains. A common anecdotal statistic related to that noted that it takes 17 full truckloads of goods to build a home, which, in turn, could morph into an honest-to-goodness recovery with improving employment numbers and also could further boost an already-improving manufacturing sector.

Manufacturing, even with some ebbs and flows here and there, has had success that is difficult to dispute. That success has been evident in metrics like new orders growth, which is commonly referred to as the “engine that drives the economy.

And sentiment provided by manufacturers in the December edition of the Institute for Supply Management’s (ISM) monthly Manufacturing Report on Business bears that out as well. Even with a wide swath of industries represented in ISM’s data, more sectors than not played the optimistic card in assessing the state of their respective businesses in regards to key metrics like the aforementioned new orders, as well as employment, and business activity/production, too.

On top of those things is the American energy boom. Just about every publication you see has something in it about the proliferation of domestic natural gas resources and fracking, of course. This movement, especially on the fracking side, has greatly benefitted the railroad sector, which is breaking records on a steady basis for petroleum and petroleum products loadings on a steady basis. It would be nothing less than a surprise to see that trend abate anytime soon.

One more thing to highlight is the strong performance of U.S. exports. The United States Department of Commerce reported that U.S. exports hit $194.86 billion on a seasonally-adjusted level on November, which stands as the new high water mark, coupled with imports dropping and resulting in the smallest trade gap since late 2009, when the recession severely dinted demand, according to the Wall Street Journal. The article cited things like a strong domestic energy industry and increasing global demand as drivers for U.S. export growth.

While signs are encouraging for the economy in 2014, things need to play out still. But the economic perch we are on in early 2014 certainly looks a lot better than the view we have had in recent years. Will we see the growth that kicks things back into gear? Stay tuned.

About the Author

Jeff Berman headshot
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. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Seasonally-adjusted (SA) for-hire truck tonnage in November was up 3.5 percent compared to October, which was up 0.5 percent over September at 136.8 (2000=100), marking the highest SA on record.

UPS said that through this acquisition it will augment its healthcare expertise and network in Europe, specifically in the fast growing healthcare markets in Central and Eastern Europe.

Carloads were up 12.1 percent at 312,271, and intermodal at 280,337 containers and trailers saw a 4.5 percent annual gain.

Total November POLB volumes were up 2.1 percent year-over-year at 581,514 TEU, and POLA volumes in November decreased 3 percent compared to November 2013 at 663,346 TEU.

When railroads are doing business with a larger than large customer like UPS, it stands to reason, it can often be the best, and worst, of both worlds, depending on how things are going. That was one of the main takeaways from a presentation by UPS Vice President of Corporate Transportation Services Ken Buenker at this year’s RailTrends conference in New York.

Article Topics

Blogs · Economy · ISM · fracking · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA