If you subscribe to our Ferrari Consulting and Research Group and Supply Chain Matters Quarterly Newsletter which is available to our blog readers, you have been likely following our tracking of select global / geographic PMI and supply chain activity indices for the past two years.
Our Q4 2015 newsletter update published in January just about concluded that there are evident signs of a global manufacturing and supply chain contraction of substance. The JP Morgan Global Manufacturing PMI remains teetering just slightly above the 50 mark determinant between contraction and expansion.
We now cite another reference for consideration.
Bloomberg View columnist and editorial board member Mark Gilbert penned a recent viewpoint: The Shipping News Says the World Economy Is Toast. In his editorial, Gilbert recalls certain cautionary signposts that were evident prior to the last great recession that began around 2007-2008. These signposts reflected on indices of global supply chain activity that ranged from shipping to air freight and include trends focused on the cost of shipping ocean containers, the Baltic Dry Index of shipping activity (a favorite of investment icon Warren Buffet), air freight, trucking volumes, new truck purchases and others.
Surveying the same review of today’s existing data, Gilbert draws similar conclusions to that of 2007:
“Unfortunately, having survived the storm fanned by subprime mortgages and credit crisis, the clouds are gathering again over the global village we live by; they are getting darker every day.”
Check out the tracking on indices that Gilbert references.
As we opined in our Q4 newsletter commentary, there is little doubt that 2016 will present a rather challenging and uncertain year for global supply chain activity and industry supply chain leaders need to be prepared to respond to various scenarios.
There may well be lots of debate and differing opinion as to whether the world economy is toast, but the signposts are certainly flashing “Caution”.