Despite the slowing of economic growth late last year on into this year, the economy will pick up steam over the rest of this year, according to the State of Logistics Report Quarterly Update just released by the Council of Supply Chain Management Professionals (CSCMP) along with Penske Logistics.
Coming off of 2014— which CSCMP termed “the best year for the supply-chain industry since the Great Recession”-- key observations on the results of this year’s first quarter discussed in the report include:
- Thanks to consumer confidence rising substantially during 2014, U.S. GDP grew faster than 3.5% in four of the last six quarters. Despite negative GDP growth in the first quarter of 2014— attributed mainly to severe winter weather-- GDP grew at 4.6% in the second quarter, 5% in the third quarter and ended with a 2.2% fourth-quarter growth rate.
- Many issues contributed to last year’s GDP slowdown that will be impacting the supply chain for the next three to six months. Those catalysts included growth in imports, slower business inventory investment and a drop in government spending. Also of note is that the recently negotiated International Longshore and Warehouse Union (ILQU) contract was completed after a “prolonged nine-month series of slowdowns and port closures, causing a freight gridlock that impacted various sectors.”
- Trucking is up, but rail and intermodal are both down. The American Trucking Associations reported that truck tonnage rose 1.2% in January— and that tonnage was up 3.5% for 2014. But railcar loadings fell more than 19% and intermodal loads more than 15%.
“The strong economic growth experienced for much of 2014 began to weaken in the fourth quarter of 2014 and has continued into the first quarter of 2015,” stated the author, business analyst Rosalyn Wilson, in the report.
“However," she continued, "this slowdown should not be viewed as a sign for concern as it conforms to the trends we have experienced for the last eight years or so and there is evidence that we can anticipate the economy to gain momentum as we move through the year."