Export rebound signals strengthening manufacturing scenario
Foreign trade, or exports minus imports, in a GDP sense can be a drag on growth when it is really a plus for the health of manufacturing
Latest NewsQ4 2017 Rail/Intermodal Roundtable: Improvements apparent; work remains The State of the DC Voice Market A “trucker’s market” is likely for 2018, says prominent industry analyst Spot market conditions remain in a better than good place, reports DAT NextGen Supply Chain: Time to pay attention to autonomous vehicles More News
Latest ResourceThe State of the DC Voice Market Available On-Demand. Watch Now.
Logistics managers in the manufacturing sector should welcome a bout of "fairly solid" growth after two lackluster and lethargic years (2015–16), observe economists for IHS Markit.
While noting that the ISM purchasing managers' index (PMI) for June bounced back to 57.8, economist Michael Montgomery says foreign trade is now more likely to be a boost or a marginal drag than the major drag that it had been in the recent past.
“The report's indication that new export orders rebounded to a 59.5 reading in June underscores what is true today that was missing in action for the prior two calendar years,” he says.
Foreign trade, or exports minus imports, in a GDP sense can be a drag on growth when it is really a plus for the health of manufacturing, since many of the raw materials and supplies (like oil, copper, and rubber) are imported, adds Montgomery
“Items like steel are more problematic since the imports compete with domestic producers,” he says. “But even there, the worst aspects of a stronger dollar have already done their greatest damage and are not primed to worsen, with manufacturing turning healthier on a global basis.”
The balance of 2017 is not set to be a "barn burner," but solid growth is in the cards, Montgomery concludes. The sole significant drag for the remainder of this year is bringing auto inventories on dealer lots back down into line with sales.
About the AuthorPatrick 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 [email protected]
Subscribe to Modern Materials Handling Magazine!Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!
10th Annual Salary Survey: The Price of Performance Let’s put Automatic Data Capture (ADC) Technology to Work View More From this Issue