Subscribe to our free, weekly email newsletter!



Will U.S. manufacturing step up?

By Patrick Burnson, Executive Editor
August 05, 2011

While the global economic crisis continues to capture mainstream business press headlines this week, one supply chain industry analyst reports that other recent trends bear watching.

According to Daniel J. Meckstroth, Ph.D., Chief Economist for the Manufacturers Alliance/MAPI, the ISM Index for July suggests a more complex recovery scenario:
         
“The Institute for Supply Management reports that its index of manufacturing activity was 50.9 percent for July, 4.4 percentage points less than the 55.3 percent seen in June.  Fifty percent is the dividing line between expansion and contraction,” Meckstroth said.  “Manufacturing posted very strong growth from January to April but the pace of growth has decelerated markedly since that time and appears to have nearly flattened out by July.  Some of the late spring and early summer doldrums were caused by supply chain issues related to getting automotive and semiconductor imports from Japan, and transportation delays due to spring flooding in the Midwest.  But the underlying problem is that the economy is growing very slowly.  GDP was nearly unchanged in the first quarter (0.4 percent) and grew only at a 1.3 percent annual rate in the second quarter of 2011.

“Commodity inflation eroded consumers’ spendable incomes at a time when they were working through debt problems and state and local governments cut spending to solve budget problems,” he added.  “Although the ISM report is gloomy, we expect manufacturing activity to improve.  Motor vehicle production schedules are increasing as parts are more available and inventories remain low.  In addition, business equipment spending has been, and is expected to remain, relatively strong.  Profits are high and firms are willing to invest to upgrade their operations to take advantage of accelerated depreciation.”

About the Author

image
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 .(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

Information abounds about the growing trend of electric lift trucks and the advantages and disadvantages of the electric solution. Amid all of the information from so many sources, what's the truth about electric lift trucks? This complimentary white paper breaks through the clutter to review why electric lift trucks are gaining in popularity and also to review their challenges, as well as their economic and environmental benefits.

Three weeks after initiating a coordinated series of slowdowns that have mired the major West Coast ports of Tacoma, Seattle, Oakland, Los Angeles and Long Beach, the ILWU has pushed away from the bargaining table.

DHL has released the third edition of its Global Connectedness Index (GCI), a detailed analysis of the state of globalization around the world.

The truck driver shortage is worsening, threatening the trucking industry’s ability to serve the nation’s supply chains. The shortage will almost certainly cause fleets’ costs to increase and shippers’ rate to continue to rise.

The Agriculture Transportation Coalition has asked the Administration to bring in a federal mediator to help resolve the negotiations, and if a strike or lockout occurs, the AgTC advocates the rarely-invoked Taft-Hartley Act.

Article Topics

Blogs · Global Logistics · Global · Global Trade · All topics

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