Viewpoint: Crank up the economic sunshine
January 01, 2014
To kick off 2014, I’m going to reinforce a rather bold suggestion that Group News Editor Jeff Berman made in his first blog post of the new year: Let’s cut out the use of the adjective “cautious” before we use the noun “optimism” when referring to the state of the U.S. economy.
One merely needs to tune into the daily drone of consumer news media to feel the warmth. Unemployment is finally heading in the right direction, housing is robust in most regions of the U.S., and the consumer confidence index ticked up more than six points in December, recouping the drop caused by the government shutdown in October.
And in our reporting online and in these pages this month, we continue to reveal beams of bright light concerning trade, manufacturing, and even the evolution of “reshoring”—a trend that should help trim transportation budgets and reduce risk in the long run.
In quick review, Port Tracker, a monthly report issued by the National Retail Federation and maritime consultancy Hackett Associates, is calling for a positive end to 2013 in terms of annual import growth at U.S. retail container ports. According to the report issued last month, total import volume for 2013 should ring in at 16.2 million TEU, marking a 2.3 percent increase over 2012.
To round out this data, the United States Department of Commerce reported last month that U.S. exports hit $194.86 billion on a seasonally-adjusted level in November. This number stands as the new high water mark for exports, and when partnered with the import data results is the lowest trade gap since 2009.
“We are well on our way to a sustained recovery,” Hackett Associates Founder Ben Hackett tells Berman this month. “And with unemployment now down to 7 percent, it appears that the recovery will continue at a healthy pace.”
The positive news on the state of U.S. manufacturing rolls along as well. According to the economic forecast issued by the Institute for Supply Management (ISM) last month, U.S. manufacturing revenue is set to increase 4.4 percent in 2014, with capital expenditures slated to rise 8 percent and capacity utilization to ring in at 80.3 percent.
According to Brad Holcomb, chair of ISM’s survey committee, this 2014 forecast is based on the positive momentum that started in the middle of 2013, with each month increasing over the previous month through the end of the year. “Our panel of purchasing and supply management executives are forecasting a continuation of that growth trend in 2014,” said Holcomb, “with a good first half and an even better second half.”
One of the more intriguing bits of upbeat news comes out of survey results issued by business advisory firm Grant Thornton. The report titled Realities of Reshoring found that more than one third of responding U.S.-based companies are planning to bring production, customer service, or IT infrastructure back to the U.S. in the next 12 months.
“The idea of going overseas was to drive costs down,” Grant Thornton’s Wally Gruenes, the study’s lead, tells us. “Now, many companies have identified cost savings in the analysis of data they receive from partners in the supply chain. They’re looking for closer collaboration or face-to-face meetings to improve these savings, and proximity can be important.”
If the results of this study come to fruition, we could see a substantial impact on U.S. trade balances and even more pressure on our straining infrastructure and domestic trucking capacity. However, all of this upbeat data indicates that even U.S. business has confidence in the U.S. again—and for me that’s enough to crank up the sunshine.
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