Subscribe to our free, weekly email newsletter!

Small businesses will keep lean inventories

The implications for supply chain managers suggest that inventories will remain lean
By Patrick Burnson, Executive Editor
July 11, 2012

After slow but steady improvement over the first half of this year, small business optimism soured considerably in June, said analysts at IHS Global Insight. The implications for supply chain managers suggest that inventories will remain lean.

“It appears small businesses are trying to make do with their current resources,” said IHS senior economist, Leslie Levesque. “They have run down inventories to better meet their less fruitful sales expectations and the net percentage of owners reporting stocks too low was unchanged in the month.

Levesque added that Small business owners became more downbeat on almost everything in the month, but particularly, their outlook on the economy and earnings potential worsened significantly.

Additionally, she said, small businesses are asking more out of their existing employees or hiring temporary workers. The net percentage of respondents planning to increase their full-time work force fell to 3 – its lowest level since October.

“It is clear from this report that small business owners are not expecting to do much additional capital spending, hiring or expanding in the next three months,” said Levesque.

A more positive outlook on credit conditions does not mean much in this type of environment, IHS analysts added. Small businesses will not increase spending or their labor force until they see demand pick up, feel less uncertain on policy issues, and do not feel so “over-regulated.”

About the Author

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 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!

Recent Entries

When DCs, plants, or any industrial facility needs more space, there are two basic options: going "out" by acquiring or building additional facilities, or "going up" by maximizing the cubic volume of existing facilities

PMMI connects end users and suppliers as they adapt to changing consumer demands.

Deployment of automated storage & retrieval (AS/RS) solutions has been delivering impressive improvements in labor or space savings within facilities for decades.

The total number of October shipments at 913,543 was flat compared to September, which was consistent with growth patterns in recent years, with 2014 up 2 percent, 2013 up 3 percent, and 2012 down 1 percent.

The secret to successful distribution center design is planning to make material handling equipment and software flexible and scalable.

Article Topics

News · Supply Chain · Economy · All topics

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA