Small businesses will keep lean inventories
The implications for supply chain managers suggest that inventories will remain lean
in the NewsState of Logistics 2016: Pursue mutual benefit North Texas WERCouncil to hold 15th Annual Warehousing Resource Convention Manufacturer simplifies complexity with collaborative robot Truckload and intermodal pricing declines remain in effect for July, says Cass and Avondale report UPS announces efficiency gains in U.S. to Canada shipping times More News
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 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!
System Integration Roundtable: Navigating an Uncertain Landscape The data-driven lift truck View More From this Issue