Retail Supply Chains Ride Current Surge in Consumer Confidence
The gain in confidence was driven by improvement in consumers’ views of both the present situation and expectations.
Latest NewsProcurement is getting its digitized act together 11th Annual Material Handling Professional Salary Survey Convey survey addresses heightened consumer expectations for deliveries Think small when it comes to warehousing Improving Forecast Accuracy Through Demand Sensing More News
Latest Resource8 Ways to Master Your Supply Chain Labeling Download the following report to learn how an Enterprise Labeling Solution can help you scale and add flexibility to your current supply chain labeling process, allowing you to adapt to evolving business requirements.
As the 2018 Retail Supply Chain Conference concludes this week in Phoenix, leading industry indicators point to continued consumer confidence.
“The Conference Board’s consumer confidence index unexpectedly surged 6.5 points (5.2%) to 130.8, the highest level since November 2000,” said James Bohnaker, Associate Director, U.S. Macro & Consumer Economics, IHS Markit.
He added that the gain in confidence was driven by improvement in consumers’ views of both the present situation and expectations.
“The labor index (percentage of respondents who think that jobs are plentiful minus the percentage who think jobs are hard to get) increased 3.8 points to 24.7%. The percentage of respondents expecting higher income six months from now rose 3.2 points to 23.8%. Both were the best since 2001, consistent with the tight labor market with unemployment at 4.1% and likely headed lower,” he said.
According to Bohnaker, many consumers started seeing additional money in their paychecks this month, so the rise in confidence is no surprise. Sustained improvement in income growth—due to more hiring, wage gains, and the tax cuts—will keep confidence elevated over the next couple years.
“Recent financial market volatility was resolved early in February, so that was likely brushed off by most respondents. However, a return to more frequent episodes of market turbulence could cause some swings in confidence,” he said.
Analysts maintain that The boost in consumer confidence is supportive of IHS Markit’s February real consumer spending growth forecast of 0.3%.
Naveen Jaggi, President of Retail and Capital Markets for JLL, told Supply Chain Management Review that this confidence has industrial real estate implications for shippers.
“Strength in labor market and the recent tax cuts propelled consumers to remain positive, despite the recent volatility of the financial markets,” he said. “This bodes well for retailers as most consumers found extra discretionary income in their pay checks.
Jaggi also noted that the recent market volatility would only potentially impact the luxury sector as those consumers have more income tied up in the markets.
“There would need to be sustained periods of negative news coming from the markets to impact most retail sectors,” he said.
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 Supply Chain Management Review Magazine!Subscribe today. Don't Miss Out!
Get in-depth coverage from industry experts with proven techniques for cutting supply chain costs and case studies in supply chain best practices.
Start Your Subscription Today!
2018 Warehouse/DC Operations Survey: Labor Crunch Driving Automation Shining a light on the “black box” of transportation View More From this Issue