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

The PMI, the ISM’s index to measure growth, increased 1.8 percent to 57.1 in July. This is 1.8 percent higher than the 12-month average of 55.3. The PMI has grown in 18 of the last 20 months, with economic activity in the manufacturing sector expanding for the last 14 months as the overall economy was up for the 62nd consecutive month.

YRC Worldwide, whose regional and long-haul units provide the second-largest LTL capacity in the trucking industry, narrowed its second-quarter loss to $4.9 million on $1.32 billion revenue, compared with $15.1 million loss on $1.24 billion revenue in the year-ago quarter.

With NFL training camps in full swing, it stands to reason that Congress must be replete with football fans, given how it basically has elected to punt on federal transportation funding yet again, with the Senate yesterday signing off on a ten-month bill to keep federal surface transportation funding intact through May 2015 through a nearly $11 billion stopgap measure.

Carload volumes were up 4.3 percent at 306,988, and intermodal volume for the week ending July 26 was up 3.3 percent at 264,809

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