Supply Chains Will Move at Modest Pace, Says ITR Economist

Although there have been recent signs of new hires in the supply chain sector, managers are being advised to remain cautious when it comes to investing in human capital this year.

“We see the rate of employment bleeding off in the second half of 2014,” says Alan Beaulieu, president of ITR, an economic forecasting firm. “The same goes for spending on equipment and technology.”

The reasons for restraint are many, he adds, pointing to a forecasted “market correction” and concern about cost implications in healthcare reform.

“These are the two major headwinds we see coming,” says Beaulieu. “Consumer confidence is also eroding, so manufacturers and retailers may continue to keep their inventories lean.”

Beaulieu, who will once again be the keynote speaker at the Conveyor Equipment Manufacturers Association (CEMA) annual convention in Palm Springs, California this spring, says there are some opportunities for companies with a healthy balance sheet.

“Cash is king, as always,” he says. “Buying new equipment and hiring skilled professionals to use it, can be a competitive advantage when the economy stages a rebound in 2015.”

That’s because of several factors, Beaulieu contends.

“Healthcare issues should be addressed and reformed by then, and we’ll have survived mid-year elections. China’s economy should improve, thereby driving demand for U.S. exports of heavy equipment and finished goods.”

Meanwhile, he advises companies to remain active in the global marketplace. A concentration on “purely domestic” business may pose a long-term risk.

“And it may be a good time for young professionals to concentrate on careers in supply chain management,” he says. “Anecdotally, we hear of a real need for smart people to move into jobs in this sector.”

As a consequence, concludes Beaulieu, compensation in the supply chain arena – including logistics and materials handling – will ramp up.

“Schools and universities are anticipating a need for managers and business leaders,” he says. “Pay scales and salaries will reflect that in the coming years.”

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