The outlook for the U.S. supply chain industry remains strong, despite a slowdown in economic growth in the fourth quarter of 2014 that has continued into the first quarter of 2015. That's one of the primary findings in the Q1 update to the Council of Supply Chain Management Professionals' (CSCMP) Annual "State of Logistics Report," presented by Penske Logistics.
Despite this blip, the update reveals, 2014 was the best year for the supply chain industry since the Great Recession. Report author Rosalyn Wilson says there is evidence that the economy could gain momentum as the current year progresses.
The "State of Logistics Report," now in its 26th year, quantifies the size of the U.S. transportation market and the impact of logistics on the U.S. economy. It is widely used as the primary benchmark for U.S. logistics activity. CSCMP has recently started issuing quarterly updates to the report.
The most recent update shows the U.S. economy on fairly solid ground. The country's gross domestic product (GDP) growth rate is strengthening, new job creation has been consistent, real net income and household net worth are inching up, inflation is low to moderate, and gas prices are tumbling. Consumer confidence also rose substantially during 2014.
The economy saw negative GDP growth in the first quarter of 2014, caused mainly by bad winter weather, higher imports, slower business inventory investment (a plus given the current level of inventories), and a drop in government spending. The West Coast port labor problems and congestion also contributed to the slower inventory growth.
The picture otherwise was positive. U.S. GDP grew faster than 3.5 percent in four of the last six quarters. GDP grew at 4.6 percent in the second quarter of 2014, increased by 5 percent in the third quarter, and ended with a 2.2 percent growth rate in the fourth quarter. The last time the U.S. experienced a sustained period of quarterly economic growth above 3 percent was from 2003 through 2005, when GDP grew faster than 4 percent in five out of 10 quarters.
CSCMP's 26th Annual "State of Logistics Report," which is available free to CSCMP members, will be released on June 23, 2015. The Q1 update can be found here.