Logistics decision-makers will face new fiscal challenges

The global economic recovery has stalled, said IHS chief economist Nariman Behravesh.
By Patrick Burnson, Executive Editor
September 08, 2011 - LM Editorial

Economists are revising earlier forecasts in light of recent fluctuations in supply chain metrics and production cycles.

In a recent special IHS global webcast: “What the Global Market Turmoil Means for IHS Forecasts,” shippers were told that the global economy was gripped by a “lost decade,” but that a double dip recession is unlikely.

“The global economic recovery has stalled, said IHS chief economist Nariman Behravesh. “We have downgraded our forecast for both the United States and Europe on recent data that suggests a much more fragile recovery.”

In addition, he said, other risks to the recovery remain, including rising oil prices, faltering growth in emerging markets and fiscal policy and political concerns of both the U.S. and the Eurozone.

Behravesh also warned of “policy shock,” something that was addressed in President Obama’s speech on Thursday evening.

“The single-biggest risk facing both the United States and Europe is a policy mistake—specifically, an advertent or inadvertent tightening of policy,” he said. “The uncertainty around what exactly policymakers are likely to do—faced with the twin challenges of weak growth and sovereign debt problems—is one of the biggest drags on growth.”

He added that the risk with very weak growth in Europe and the United States is not so much that the recovery will implode on its own. Rather, a fragile recovery is much less able to withstand a shock—even a weak one.

At the same time, a “bi-polar” recovery is underway, with emerging nations continuing to gain strength, said Behravesh. “The real risk in these countries is stagflation,” he said, “not recession.”

The Asia Pacific is the “star” region now, said Behravesh, with Japan proving once again to be a most resilient nation. He expects all of Asia to continue on a rapid path of expansion.



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

NRF's Jonathan Gold explains that the past year was replete with disruptions, slowdowns and partial shutdown, which can no longer be the norm, saying ports and dockworkers must adapt to ensure they provide shippers with the predictability and stability they need.

Last month, I gave a presentation to a group of senior transportation and supply chain executives. It was entitled “Predictable Surprises,” because it addressed how transportation and supply chain professionals can eliminate unpleasant surprises by looking at and evaluating issues in the transportation industry, and projecting how those issues will affect their companies.

The Port of Los Angeles (POLA) and the Port of Long Beach (POLB) said this week that they have formally established working groups, which they said will aim to seek new supply chain efficiencies, and focus on various aspects of port operations, including peak operations and terminal optimization in an effort to augment the San Pedro Bay port complex.

A month ago, the Shippers Conditions Index (SCI) from freight transportation consultancy FTR indicated that shippers might be traveling on a rocky road in the coming months. And one month later it appears those concerns appear to have been confirmed.

The American Association of Port Authorities (AAPA) had nothing but praise for the Senate passage over the past weekend of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA-2015).

Article Topics

News · Global Logistics · Global · Trade · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

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