Wednesday, September 30, 2009

“The Recession is Over!” Is it over for you?

“The recession is over!*” proclaims the cover of Newsweek. The asterisk takes you to the caveat: “*Good luck surviving the recovery.”

While competing statistics seem to bounce up and down like yoyos, and one day’s good news about factory orders is offset by the next day’s worse than expected job loss report, a consensus seems to be emerging that catastrophe has been averted, but the road ahead is full of bumps.

“The economy has clearly moved past the worst of the recession. Any lingering hysteria over a second Great Depression has evaporated. The second half of the year should see some output growth as firms rebuild badly depleted inventories and government stimulus policies start to take full effect,” said Kenneth Rogoff, professor of economics at Harvard University, quoted in the Washington Post.

Mark Zandi, chief economist at Moody's, said that “the Great Recession is finally giving way to an economic recovery. Driving this turn is the Federal Reserve's unprecedented actions, which have stabilized the financial system, and fiscal stimulus. It's no coincidence that the recession is ending just when the stimulus is providing its maximum economic benefit.” But like all the experts, Rogoff and Zandi take pains to caution that the recovery will be long and difficult, with employment likely to lag.

Container rates for shipments from the Pacific Rim are up sharply, according to the index compiled by Drewry Shipping Consultants of London. The index of average spot prices for shipping a 40-foot container from Hong Kong to Los Angeles jumped, signaling that freight rates on the trans-Pacific are on the rise.  
This last indicator, showing shipments from Asia climbing, seems particularly telling, saying that sellers are indeed taking steps to replenish depleted inventories, in anticipation, or an actual beginning, of a return of demand.

No one forecast or economic snapshot can say what will hold true for your business in the coming year. But these developments, in addition to affordable fuel and resurgent industrial demand reported here recently, are positive signs reminding us business will indeed rebound, and the smart players will have plans in place to get their goods to market rapidly and cost-effectively, while still doing everything possible to strengthen the bottom line right now. TOTALogistix is ready to help meet that goal.

800-989-0054 x108
Scott Shearer

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