Subscribe to our free, weekly email newsletter!



Say hello to the manufacturing-led recovery

By Jeff Berman, Group News Editor
October 04, 2010

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 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

Transportation and logistics merger and acquisition (M&A) activity in the third quarter saw annual gains, which were driven by smaller deals in the trucking logistics, shipping, and passenger air sectors, according to data issued in the Intersections report by PwC this week.

With the holidays rapidly approaching, it appears retailers are not quite done getting inventory set up and on the shelves in time for what is expected to be a fairly active shopping season. That much was evident based on recent data for September volumes issued by the Port of Los Angeles (POLA) and the Port of Long Beach (POLB).

Join Industry Expert Adrian Gonzalez for this educational webinar on the tenets and the benefits of Closed-Loop Operational Management. You’ll learn how Closed-Loop Operational Management optimizes orders, inventory, and transportation concurrently, and how it is able to optimize large-scale problems on a daily basis.

In a separate conference call following CP’s third quarter earnings release call yesterday, CP CEO Hunter Harrison make myriad convincing points for a merger between CP and CSX and offered up his take in general industry M&A as well.

Seasonally-adjusted (SA) for-hire truck tonnage in September checked in at 132.6 (2000=100) for the second straight month, remaining as the current all-time high level for the second month in a row, with November 2013’s 131.0 now the second best month recorded.

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