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.
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.
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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 Mr. Burnson is a widely-published writer and editor specializing in international trade, global logistics, and supply chain management. He is based in San Francisco, where he provides a Pacific Rim perspective on industry trends and forecasts. He may be reached at his downtown office: [email protected].Subscribe to Supply Chain Management Review Magazine!
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Article Topics
China · Forecasting · Tariffs · Transportation Management ·It’s high time to go beyond visibility Driving supply chain flexibility in an uncertain and volatile world View More From this Issue