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Economic Growth – Where, When, How Volatile - What Does It Mean For Logistics?

eft CEO Chris Saynor investigates recent economic figures and provides his thoughts on their impact on the logistics industry.

I had planned to write about the favourable economic indicators that have been reported in many areas of the world in this week’s column. Just as I was finishing my research out popped the January ISM Manufacturing figures (http://www.cnbc.com/id/101384666) showing that U.S. manufacturing grew at a substantially slower pace in January as new order growth plunged by the most in 33 years, driving overall factory activity to an eight-month low.

The Dow Jones is also way down from its December peak, although I believe this is just a correction and not anything more structural. It’s currently at the level we last saw just a few months ago in October, so no big cause of concern……yet – though this is a good article to summarise some of this http://www.bbc.co.uk/news/business-26027435

However, back to the positive data, which was important I thought, as it came from two area’s that have been hit the hardest in recent economic times, namely Europe and Japan. I decided to share with you three BBC articles from the last 7 days which hopefully finally prove that these regions have really turned a corner.

Strong UK Manufacturing Data - http://www.bbc.co.uk/news/business-26013119

Strong Eurozone Manufacturing Data - http://www.bbc.co.uk/news/business-26014150

Japan Inflation rises - http://www.bbc.co.uk/news/business-25974549

Another factor that we will need to add into the equation which may affect things in the near future is the increasing volatility and dare I say economic fragility in some emerging markets, just take a look at the recent interest rate hikes in South Africa and Turkey. There is still growth in these emerging regions, but there is a concern over how solid the economic foundations are rather than the specific speed of headline growth.

These two articles are definitely worth 3 minutes of your time on this subject  

http://www.bbc.co.uk/news/business-26012466

http://www.bbc.co.uk/news/25988823

We therefore have a bit of a mix bag as to what this means for logistics industry growth in 2014. What it does show for sure is how connected the world now is, and how regions and countries are so interdependent. I think the days when isolated incidents of one country showing great growth in comparison with its neighbours are probably gone to a large extent. There are some interesting opinions in this article from Agility and Transport Intelligence http://www.supplychain247.com/article/how_will_logistics_benefit_from_the_2014_economic_upturn