Small businesses will keep lean inventories

The implications for supply chain managers suggest that inventories will remain lean

By ·

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 [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!

Article Topics

Economy · Supply Chain · · All Topics
Latest Whitepaper
The Overlooked Competitive Advantage: Connected Teams
57% of surveyed manufacturers believe they could reduce downtime by 10-30% by unifying their workgroup communications. What does a minute of downtime cost you?
Download Today!
From the January 2018 Modern Materials Handling Issue
PFS built one of the largest and most automated AS/RS freezers in the world in Washington state. Next up is a new design for automation. Automated Storage/ Automated Retrieval System, Cold Storage.
Lift Truck Series Part 1: Lift truck technology connects pickers to productivity
Breaking Through On Yard Visibility
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Emerging Technologies for Your Distribution Center
Come get an insider's view of the latest technologies for inside your Distribution Center. You'll learn which technologies are being piloted, which are having success and moving from concept to implementation and into production on the maturity scale, and what's coming on the horizon.
Register Today!
EDITORS' PICKS
Trinchero Family Estates: Pallet handling in the vineyard
The second-largest family-owned wine company in the world turns to automated pallet handling and...
System Report: Rocky Brands Sees the Light
Confronting an aging materials handling system and new channels of business with new customer...

Top 20 industrial lift truck suppliers, 2017
The top lift truck suppliers list is changing with industry acquisitions causing a dramatic...
Lodge Manufacturing: Distribution Cast in Iron
In a new facility, iPhones and a new WMS allowed cookware manufacturer Lodge to double its business...