Positive economic indicators lend credence to hopes for an improving economy

As is almost always the case in this post-recession world we all live in, there are more than a few economic indicators that have the potential to push the needle on public opinion in regards to the economy.

Some of these indicators point to things improving and signs of better times ahead, while others signal that we are still very much embedded in the recessionary-induced malaise and are likely to be there for quite a while more.

But for now we will take a respite from the doom and gloom and “accentuate the positive.” Over the last few weeks there have been a few notable economic signs that things could finally truly be turning the corner like the Department of Commerce’s advance second quarter GDP estimate of 4.0 percent growth, which, if it could be sustained, would bode very well for overall economic activity.

Some other notable signs, which LM has recently reported on, are the Institute for Supply Management’s August edition of its Manufacturing Report on Business, which saw New Orders (commonly referred to as the engine that drives manufacturing) hit its highest level since April 2004.

Bradley J. Holcomb, CPSM, CPSD, chair of the ISM Manufacturing Business Survey Committee, told me that the gains in new orders represents steady traction in manufacturing growth going back to January, while being consistent with manufacturing’s strong growth trend, coupled with manufacturing in China and the Eurozone both in down periods at a time when the U.S. is going strongly.

And volumes on the railroads for both carload and intermodal for August, which were issued by the Association of American Railroads (AAR), were also quite strong. The weekly carload average for August at 303,072 marks highest weekly average for any month since October 2011 and the highest August tally going back to 2008, the AAR said. And the August weekly intermodal average-at 268,922-represents the second highest weekly average ever for a single month, with June 2014 the best month on record.

Another piece of encouraging data came from Panjiva, an online search engine with detailed information on global suppliers and manufacturers. Panjiva reported that
U.S.-bound waterborne shipments in July—at 1,258,142—were up 2 percent annually and up 5 percent compared to June. Panjiva said that these shipment levels are on a typical seasonal path for this time of year, with July posting the highest shipment volume for any month in 2014 year-to-date.  The company explained that it is likely due to the peak of the retail holiday import cycle, with stores stocking up for the 2014 holiday season. What’s more, through the first six months of the year Panjiva reported that U.S.-bound waterborne shipments are up 6 percent at 8,048,808 compared to the same period for 2013, and if this pace continues the company said it would translate into a record year for shipments.

All of these aforementioned points are clearly encouraging for certain. Morgan Stanley analyst Bill Greene’s commentary in a research video also added to the good vibes, too.

“These growth rates [for truckload less-than-truckload, parcel, and rail] suggest that across all the modes by year end 2014 or early 2015 at the latest that every transport mode will be back to peak volumes, and we will have recovered everything we lost after the recession,” he said.

While things are clearly coming around, there are obviously major issues to deal with before we can truly say we are back to the good old days. These have to do with geopolitical issues like Ukraine-Russia, the Middle East, and closer to home the lack of meaningful wage growth, and a fluctuating housing market, among others.

To be able to identify a widespread set of improving economic metrics (with direct tie-ins to the supply chain) is a good thing or, perhaps, a “small victory” even. But in order for things to continue on this path, more needs to happen so at least these positive metrics provide a decent enough baseline to set the stage for ongoing growth. Will it happen? Hopefully, it will, so let’s hope 2014 finishes strong on the economic front and we don’t see a second-half slide, which has become commonplace in recent years.