EsThe Downturn Is Going Global
Panjiva’s latest analysis confirms that weakening demand in the U.S. is having economic repercussions around the globe. Our research team took a look at changes in the number of companies — across all industries — that are shipping goods to U.S. customers. The numbers are not encouraging:
- In October of 2007, approximately 179 thousand companies shipped to U.S. customers.
- In December of 2008, approximately 156 thousand companies shipped to U.S. customers.
- Thus, in a little over a year, there’s been a 13% drop in the number of companies shipping to U.S. customers.
We also took a look at the companies that are still serving American customers, and, again, the numbers were not encouraging:
- 12% of the companies that shipped to U.S. customers in December suffered a massive decline in the volume shipped to their customers (50% decline in volume from Q4 of 2007 to Q4 of 2008).
More soon. In the meantime, here’s a video summarizing our findings:
Written by Josh Green
US imports dropped 14% in December 2008 from their December 2007 level.
When looking at trade data, it’s important to separate transient, “whiplash” effects from steady state decline. Most companies’ MRP system will reduce orders for long lead time orders to zero or even negative when demand drops, because there is material in the pipeline coming in. In my early days at HP before we got lead times under control, we once cancelled 6 months of orders from a long lead time vendor.
With the dollar generally stronger and fuel costs back down, I expect the steady state decline of US imports will match the decline in US industrial output.