Economy Sputtering Forward Bodes Well for Freight

(FleetOwner)

Increased manufacturing activity and more “re-balancing” of inventories are two of the latest signs that the U.S. economy is improving and that freight volumes should rise. Yet experts caution that trucking is not out of the woods yet.

“The manufacturing sector grew for the third consecutive month in October, and the rate of growth is the highest since April 2006,” said Norbert Ore, chairman of the Institute for Supply Management’s (ISM) manufacturing business survey committee. He added that ISM’s monthly purchasing managers’ index (PMI) rose to 55.7 in October, an increase of 3.1 percentage points from September, and that any value over 50 indicates growth.

“The jump in the index was driven by production and employment, with both registering significant gain,” Ore said. “Production appears to be benefiting from the continuing strength in new orders, while the improvement in employment is due to some callbacks and opportunities for temporary workers. Overall, it appears that inventories are balanced and that manufacturing is in a sustainable recovery mode.”

Yet he cautioned that those numbers may be a bit too high, and will likely drop a few points next month in what he called “a leveling off” on the economy’s course toward recovery. “This is not a robust economy,” Ore stressed. Read more here.