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

The trend of rising weekly diesel prices remains intact, with the Department of Energy’s Energy Information Administration (EIA) reporting this week that the average price per gallon of diesel gasoline increased 1 cent to $2.914 per gallon.

When the United States House of Representatives last week voted extend current law and authorizes surface transportation programs through the end of July by a steep margin, it was widely expected that the United States Senate and follow their lead. That is exactly what happened on Friday, May 22, with the measures headed to President Obama to be signed into law.

For the month of April, Cass and Avondale found that truckload rates in April, which measures truckload linehaul rates paid during the month, were up 3.8 percent annually, while intermodal dropped 1.9 percent annually during the same period.

Following the Pacific Maritime Association (PMA) signing off on ratifying a new five-year contract with the International Longshore & Warehouse Union (ILWU) on May 20, the ILWU followed suite on May 22, saying that 82 percent of its longshore worker members voted to ratify the tentative contract agreement between the parties that was reached on February 22.

Straying from its typical seasonal trajectory, United States-bound waterborne shipments dipped from March to April, according to data recently issued by Panjiva, an online search engine with detailed information on global suppliers and manufacturers.

Comments

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