Storm Clouds on the Horizon for Supply Chain Operations?

This is an excerpt of the original article. It was written for the December 2018 edition of Supply Chain Management Review. The full article is available to current subscribers.

December 2018

It’s December and time once again for our annual Executive Guide to Supply Chain Resources. This is a comprehensive guide to services, products and educational opportunities targeted specifically to supply chain professionals. As with years past, we’re also featuring several articles we trust will offer food for thought in your supply chain in the coming year.

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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.

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