07-23-2009, 03:07 PM
The only thing I'll contribute to this, (mostly because I don't know enough about this to state much in the way of fact) is that what you're talking about here is the supply side of the business equation.
Supply tends to be more of a lagging indicator, while Demand tends to be more of a leading indicator. Naturally demand has to be there before supply is. So when people talk about economic recovery, I ask what they are looking at that idicates a shift one way or the other. The news is generally pathetically inaccurate and will nearly always quote unemployment as the most tell-tail sign of the economy. It is interesting to hear about things from a bill count perspective though. If anything, it certainly gives an indication where along the cycle of recession/recovery we actually are. There are a great number of people talking about the fact that we are in recovery already. Within the Vistage group of businesses, they are reporting that 72% of the membership companies (not mine unfortunately) are either reporting profits, or minimally a postitive shift in the downward trend last month. That is way up from a few months ago the last time the published a report (and just so you know there is no agenda behind this report, as that would be totally out of line with the orgs goals). 72% sounds high, but realize the shift in trend is a kind of catch-all that basically says business owners themselves are seeing improvements.
When you look at shipping however, the numbers are horrible. The reason is that companies have slowed down purchasing and have been selling off existing inventories as much as possible. Since demand has been slowed so much, they've been able to affectively do this, and after downsizing the reduced revenues are still enough for companies to show some improvement.
The real question will be this, will demand pick back up and therefore enable a slow trickle of increased purchases, and when is that going to happen? Many of the people in the know that I've spoken to have been talking about a time frame as early as September and as late as June next year, before we start to see the uptick we're all hoping for. but how this translates to shipping, I really don't know. If someone had a metric for seeing how much available inventory there was cumulatively across each market, we would better be able to predict the point at which companies are going to be forced to increase their purchases (and subsequently see a rise in shipping).
That's super super simplified I know, but I could write a book about the stuff with all the talks and discussions I've had lately with some really qualified people. And I guess the real short version says that we are in recovery already, and have been for the past 6-8 months, but things are going to "feel" worse still before they "feel" better.
Just as a side note, (and if I get some time I'll post the article) there is talk of the European banks being able to really throw a wrench in the works in terms of Americas recovery timeline.
Supply tends to be more of a lagging indicator, while Demand tends to be more of a leading indicator. Naturally demand has to be there before supply is. So when people talk about economic recovery, I ask what they are looking at that idicates a shift one way or the other. The news is generally pathetically inaccurate and will nearly always quote unemployment as the most tell-tail sign of the economy. It is interesting to hear about things from a bill count perspective though. If anything, it certainly gives an indication where along the cycle of recession/recovery we actually are. There are a great number of people talking about the fact that we are in recovery already. Within the Vistage group of businesses, they are reporting that 72% of the membership companies (not mine unfortunately) are either reporting profits, or minimally a postitive shift in the downward trend last month. That is way up from a few months ago the last time the published a report (and just so you know there is no agenda behind this report, as that would be totally out of line with the orgs goals). 72% sounds high, but realize the shift in trend is a kind of catch-all that basically says business owners themselves are seeing improvements.
When you look at shipping however, the numbers are horrible. The reason is that companies have slowed down purchasing and have been selling off existing inventories as much as possible. Since demand has been slowed so much, they've been able to affectively do this, and after downsizing the reduced revenues are still enough for companies to show some improvement.
The real question will be this, will demand pick back up and therefore enable a slow trickle of increased purchases, and when is that going to happen? Many of the people in the know that I've spoken to have been talking about a time frame as early as September and as late as June next year, before we start to see the uptick we're all hoping for. but how this translates to shipping, I really don't know. If someone had a metric for seeing how much available inventory there was cumulatively across each market, we would better be able to predict the point at which companies are going to be forced to increase their purchases (and subsequently see a rise in shipping).
That's super super simplified I know, but I could write a book about the stuff with all the talks and discussions I've had lately with some really qualified people. And I guess the real short version says that we are in recovery already, and have been for the past 6-8 months, but things are going to "feel" worse still before they "feel" better.
Just as a side note, (and if I get some time I'll post the article) there is talk of the European banks being able to really throw a wrench in the works in terms of Americas recovery timeline.
Gameless (for now)