Executive Briefings

At This Point, Outlook for 2013 Is Anyone's Guess

These are difficult times for economists and company managers because the outlook for 2013 is highly dependent on how the fiscal cliff (the large government budget cuts and tax increases that take effect on January 1, 2013) impasse is resolved and secondarily on whether Europe continues to recover from the recession resulting from its fiscal and financial crisis.

If the fiscal cliff is successfully removed and Europe makes progress, 2013 could see above-trend growth in the U.S. economy, which would boost the global economy. On the other hand, if Europe does not improve its situation significantly and the United States goes over the fiscal cliff, it will take the world economy down with it. In short, for U.S. businesses and importers or exporters anywhere in the world, 2013 could be a great or a terrible year.

If the fiscal cliff is not removed by Washington, the consequence is estimated to be a contraction in GDP of 5% in the first half of 2013 compared to the first half of 2012. A second relatively severe recession of this nature would be hard on the transportation industry, particularly participants that are already struggling to make payments on their debts, like ocean carriers.

On the other hand, if the fiscal cliff is avoided then growth could surge due to company expansion plans being brought forward. This would create congestion problems in some segments of the freight movement industry, particularly the trucking sector which is struggling to meet demand due to the Carrier Safety Act which limits the hours drivers can operate.

Read Full Article


Keywords international trade, supply chain management, supply chain risk management, U.S. government economic policy, U.S. GDP, Eurozone

If the fiscal cliff is successfully removed and Europe makes progress, 2013 could see above-trend growth in the U.S. economy, which would boost the global economy. On the other hand, if Europe does not improve its situation significantly and the United States goes over the fiscal cliff, it will take the world economy down with it. In short, for U.S. businesses and importers or exporters anywhere in the world, 2013 could be a great or a terrible year.

If the fiscal cliff is not removed by Washington, the consequence is estimated to be a contraction in GDP of 5% in the first half of 2013 compared to the first half of 2012. A second relatively severe recession of this nature would be hard on the transportation industry, particularly participants that are already struggling to make payments on their debts, like ocean carriers.

On the other hand, if the fiscal cliff is avoided then growth could surge due to company expansion plans being brought forward. This would create congestion problems in some segments of the freight movement industry, particularly the trucking sector which is struggling to meet demand due to the Carrier Safety Act which limits the hours drivers can operate.

Read Full Article


Keywords international trade, supply chain management, supply chain risk management, U.S. government economic policy, U.S. GDP, Eurozone