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.

By ·

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, 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!

Latest Whitepaper
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh injection of equity investment is transforming the marketplace. At the same time, shippers may expect to see 3PLs continue to purchase high-tech “solutions” and hire young professionals for implementation.
Download Today!
From the August 2017 Logistics Management Magazine Issue
Which carriers, third-party logistics providers, and North American ports have crossed the service excellence finish line ahead of their competitors? Our readers have cast their votes, and now it’s time to introduce this year’s winners of the coveted Quest for Quality Awards.
BMW Takes the Inland Road to Efficiency
Global Logistics: No Shortcuts to Security
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...

LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...