Supply Chains Prepping for Increased Consumer Demand

Signals in the supply chain markets suggest that businesses are preparing for increased consumer demand, signaling rising economic activity, according to researchers at Florida Atlantic University and four other schools.

Signals in the supply chain markets suggest that businesses are preparing for increased consumer demand, signaling rising economic activity, according to researchers at Florida Atlantic University and four other schools.

“The near historic import volume on the West Coast ports, coupled with the rise in warehouse utilization, is a positive sign of the market’s bet on increased demand for the forthcoming holiday season,” says Steven Carnovale, associate professor and director of the masters of science in supply chain management in FAU’s information technology and operations management department. “The increased rates of growth in inventories signal heightened confidence in consumer demand continuing into the near future.”

Key takeaways:

• Overall, the logistics industry, a leading indicator of where the economy is headed, suggests a cautious but robust future economic growth.
• The Logistics Managers’ Index Report (LMI) was 56.5 in July, up 1.2 points from the previous month. 
• Growth in the transportation industry helped bolster July’s LMI reading, with prices rising to their highest level since May 2022. Inventory levels, however, increased upstream but contracted downstream, suggesting that while retailers are keeping their inventories leaner at the start of the third quarter, manufacturers, wholesalers, and distributors are building up goods in anticipation of increased demand later in the year.

Written by: Marina Mayer, Content Director of IRONMARKETS, Editor-in-Chief, Supply Chain Network, for Supply & Demand Chain Executive.