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

When an industry is changing rapidly, companies must adapt in order to survive. In this whitepaper, a global publisher was seeking a partner that could mitigate risk and build a platform flexible enough for their shifting customer expectations. The solution enabled the company to rewrite their operations game plan and transform their supply chain.

Global trade management technology provider Amber Road (formerly known as Management Dynamics) said this week it has acquired ecVision, a cloud-based provider of global sourcing and collaborative supply chain solutions.

While it is already reaping myriad benefits from ORION (On-Road Integrated Optimization and Navigation), a proprietary routing platform for its drivers rolled out in late 2013, transportation and logistics bellwether UPS announced big plans for the technology this week.

Diesel prices continued their recent stretch of gains with a 3.6 cent increase this week to $2.936 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

TSA has reaffirmed its March 9 general rate increase (GRI) of $600 per 40-foot container (FEU) for all shipments, and lines have also filed a previously announced April 9 GRI in the same amount.

Article Topics

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

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