In February's "Market Update" , Jeff Greenwell, Managing Director of Strategic Account Management, highlights positive trends in the U.S. market, however Coronavirus is a major concern for the industry.
MARKET INDICATORS SHOW A POSITIVE OUTLOOK
Despite industrial production declines, the U.S. market shows signs of slow but steady growth. Unemployment remains stable at 3.6% with unexpected gains in construction, healthcare, transportation, and warehousing. Consumer confidence continues its uptick at 99.8, and retail sales increased by 0.3%. The Purchasing Manager’s Index (PMI) rebounded to 50.9 – the highest rating in several months. PMI is used to measure economic factors to make business decisions in purchasing, job creation, and supply chain logistics. A PMI over 50 is a sign of economic growth.
COUNTERED BY CONCERNING INDUSTRY INDICATORS
Truck utilization remains nearly the same (86.9%) despite a slight decrease in tender volume (9,600). Rejections dropped significantly to 5.59 from 7.54 last month. The Coronavirus’ impact on Chinese manufacturing and the global supply chain remains unknown. Temporary plant closures, offshore product quarantines, and related disruptors may create shipping backloads that substantially impact rates and capacity. BNSF Logistics will continue to monitor the situation to identify solutions that mitigate potential shortages.
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