Small businesses will keep lean inventories

The implications for supply chain managers suggest that inventories will remain lean

By ·

After slow but steady improvement over the first half of this year, small business optimism soured considerably in June, said analysts at IHS Global Insight. The implications for supply chain managers suggest that inventories will remain lean.

“It appears small businesses are trying to make do with their current resources,” said IHS senior economist, Leslie Levesque. “They have run down inventories to better meet their less fruitful sales expectations and the net percentage of owners reporting stocks too low was unchanged in the month.

Levesque added that Small business owners became more downbeat on almost everything in the month, but particularly, their outlook on the economy and earnings potential worsened significantly.
Additionally, she said, small businesses are asking more out of their existing employees or hiring temporary workers. The net percentage of respondents planning to increase their full-time work force fell to 3 – its lowest level since October.

“It is clear from this report that small business owners are not expecting to do much additional capital spending, hiring or expanding in the next three months,” said Levesque.

A more positive outlook on credit conditions does not mean much in this type of environment, IHS analysts added. Small businesses will not increase spending or their labor force until they see demand pick up, feel less uncertain on policy issues, and do not feel so “over-regulated.”


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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!

Article Topics

Global · Logistics · Supply Chain · All Topics
Latest Whitepaper
Reduce Order Processing Costs by 80%
Sales order automation software will seamlessly transform inbound emailed and printed purchase orders into electronic sales orders that can be automatically processed into your ERP system with 100% accuracy.
Download Today!
From the June 2016 Issue
In the wildly unstable ocean cargo carrier arena, three major consortia are fighting for market share, with some players simply hanging on for survival. Meanwhile, shippers may expect deployment shifts as a consequence of the Panama Canal expansion.
WMS Update: What do we need to run a WMS?
Supply Chain Software Convergence: Synchronization Realized
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Optimizing Global Transportation: How NVOCCs Can Use Technology to Operate More Profitably
Global transportation isn't getting any easier to manage, especially for non-vessel operating common carriers (NVOCCs). Faced with uncertainties like surcharges—but needing to remain competitive when bidding against other providers—NVOCCs need the right mix of historical data, data intelligence, and technology support to make quick and effective decisions. During this webcast you'll learn how Bolloré Transport & Logistics was able to streamline its global logistics and automate contract management.
Register Today!
EDITORS' PICKS
Top 50 U.S. and Global 3PLs 2016: Technology Now the Key Differentiator
Following last year’s merger and acquisition frenzy, the speed of technology implementation by the...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo