Subscribe to our free, weekly email newsletter!

Measuring manufacturing growth becomes more of a challenge

Growth is so sluggish that surveys cannot tell the difference between token gains and flat, say economists
By Patrick Burnson, Executive Editor
July 03, 2013

While logistics managers may note that the ISM purchasing managers’ index (PMI) has bounced back over 50 to 50.9 in June from 49.0 in May, some economists maintain that such surveys may not mean much.

“The ISM report says that manufacturing is essentially stalled,” said Michael Montgomery, U.S. economist for IHS Global Insight. “The Markit Economics version (constructed in a very similar fashion) says that there is modest growth.”

Markit Economics is an independent, global provider of some of the world’s most influential business surveys.

“From our perspective, taking all the data, that means growth is so sluggish that surveys cannot tell the difference between token gains and flat,” added Montgomery.

The manufacturing sector turned mildly negative in May, then mildly positive in June. The two-month average is virtually neutral and the three-month average a token plus — all 12-month averages are very close to June readings.

According to IHS, that means that the manufacturing operating environment is almost identical to what it has been for most of the last year, with no signs of improvement or deterioration.

Similar conditions of near stagnation exist overseas, with Europe on the underwater side of neutral but clawing back toward neutral, China just under neutral, and only Japan showing any signs of a recovery that is gaining momentum. Worldwide manufacturing is stuck in the mud.

“The manufacturing sector is recording such modest growth that surveys cannot tell the difference from stagnation,” said Montgomery.

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 .(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

Kurt Nagle, president and CEO of the American Association of Port Authorities recently voiced his endorsement of this trade legislation

While many auto executives expect more industry recalls in 2015 and 2016, just 8 percent use advanced predictive analytics to help prevent, prepare for, and manage recalls, according to a recent online poll from Deloitte.

Purolator white paper highlights common Canadian shipping mistakes. From failing to appreciate the complexity of the customs clearance process to not realizing that Canada recognizes both French and English as its official languages, U.S. businesses frequently misjudge the complexity of shipping to the Canadian market. This often results in mistakes - mistakes that can come with hefty penalties and border clearance delays, and that can result in lingering negative perceptions among Canadian consumers.

At a certain point, it seems like the ongoing truck driver shortage cannot get any worse, right? Well, think again, because of myriad reasons we could well be in the very early innings of a game that is, and continues, to be hard to watch. That was made clear in a report issued by the American Trucking Associations (ATA), entitled “Truck Driver Analysis 2015.”

Coming off of 2014, which in many ways is viewed as a banner year for freight, it appears that some tailwinds have firmly kicked in, as 2015 enters its official homestretch, according to Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report at last week’s CSCMP Annual Conference in San Diego. The SOL report is sponsored by Penske Logistics.


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

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA