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Storm Clouds on the Horizon for Supply Chain Operations?

Strength in employment and income, solid gains in household net worth and elevated consumer sentiment have generated considerable momentum just as tariffs on some $200 billion of imports from China have gone into effect.

By ·

While a global recession is probably still a year or two away, “storm clouds on the horizon” are starting to look more than a little threatening, say IHS Markit economists. “The good news on the trade front is that the United States, Mexico and Canada have agreed to a revised North American trade treaty,” says IHS Markit’s chief economist Nariman Behravesh. “The bad news is that the trade tensions between the United States and China seem to be escalating inexorably.”

One symptom of the contentious trade environment is a fall in the IHS Markit purchasing managers’ index (PMI) for global export orders for the first time in more than two years. Another source of concern is the volatility in oil prices for dated Brent. Putting all this together, IHS Markit predicts that world GDP growth will edge down from 3.2% in 2018 to 3.1% in 2019 and 2.9% in 2020.

Meanwhile, recent strength in employment and income, solid gains in household net worth and elevated consumer sentiment have generated considerable momentum just as tariffs on some $200 billion of imports from China have gone into effect. 

This complete article is available to subscribers only. Log in now for full access or start your PLUS+ subscription for instant access.

 

By ·

While a global recession is probably still a year or two away, “storm clouds on the horizon” are starting to look more than a little threatening, say IHS Markit economists. “The good news on the trade front is that the United States, Mexico and Canada have agreed to a revised North American trade treaty,” says IHS Markit’s chief economist Nariman Behravesh. “The bad news is that the trade tensions between the United States and China seem to be escalating inexorably.”

One symptom of the contentious trade environment is a fall in the IHS Markit purchasing managers’ index (PMI) for global export orders for the first time in more than two years. Another source of concern is the volatility in oil prices for dated Brent. Putting all this together, IHS Markit predicts that world GDP growth will edge down from 3.2% in 2018 to 3.1% in 2019 and 2.9% in 2020.

Meanwhile, recent strength in employment and income, solid gains in household net worth and elevated consumer sentiment have generated considerable momentum just as tariffs on some $200 billion of imports from China have gone into effect. 

 

 


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]

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From the November 2018
The combined forces of a strong economy, e-commerce growth and a tight labor market are making it more important for distribution center (DC) operations to find ways to make their existing infrastructure and people more productive. Software and automation continue to prove to be a vital part of the solution.
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New Survey Measures Potential Impact of Tariffs on U.S. Supply Chains
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