Say hello to the manufacturing-led recovery
OK—I guess it is not a surprise at this point, but it looks like any type of economic recovery occurring (it is, right?) is being driven by manufacturing rather than the more typical leader, consumer spending.
in the NewsState of Logistics 2016: Pursue mutual benefit California exports sustain traction UniCarriers Americas sponsors local high school event to promote interest in STEM careers Safe Fleet acquires Randall Manufacturing U.S. carload and intermodal shipments are mixed for week ending January 14 reports AAR More News
Ok—I guess it is not a surprise at this point, but it looks like any type of economic recovery occurring (it is, right?) is being driven by manufacturing rather than the more typical leader, consumer spending.
How do I know this is true? For one thing, I was in Target not that long ago to buy some plastic golf balls to destroy my yard with, and I felt like I was literally the only person there. It was really a little weird.
But the real reason I know this that various data points indicate that is truly the case. One of the most recent indicators is last week’s Institute of Supply Management Manufacturing release and its PMI reading of 54.4 percent.
While this was down from August’s 56.3 percent PMI by 1.9 percent, any reading that is 50 or better represents economic growth. September represents the 14th consecutive month that the PMI is more than 50, coupled with the overall economy on a growth track for 17 straight months.
Meanwhile, consumer spending remains stalled as evidenced by a weaker-than-expected Back-to-School season, leading up to what could be a timid Holiday Shopping season as well. Not encouraging, I know, but it is what we are looking at for now.
Another notion supporting the thesis for a manufacturing-led recovery is recent data from freight transportation consultancy FTR Associates. FTR’s August Trucking Conditions Index, which is comprised of factors affecting trucking companies, showed a 2.3 percent gain for the sixth straight month of growth and indicates a healthy environment for trucking.
FTR also said that strong manufacturing increases have generated freight growth above GDP.
And FTR President Eric Starks said in a statement that “conditions for trucking are positive in spite of sluggish growth in the overall economy because manufacturing, which generates freight, is growing much more rapidly than services.”
With unemployment high and consumers still wary of spending at previous levels, it looks like the manufacturing-led recovery could be here to stay, it seems. What is your take?
About the AuthorJeff 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
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!
Moore on Pricing: The other TMS functional options 2017 Rate Outlook: Where are freight transportation rates headed? View More From this Issue