How low will it go? That's the question on everybody's mind right now. If you're like most of us, probably a day hasn't passed since mid-September when you didn't take part in at least one conversation that centered on the state of the global economy and ultimately included that question.
It's been about four months since it first became painfully obvious that the global economy hadn't just started sliding downhill, it had essentially fallen through a metaphorical trapdoor. But here we are in the first days of the new year, and we're still trying to figure out when the bottom will even be in sight.
That's partly because we have so little to go on. The pundits have offered virtually nothing in the way of guidance or predictions. And unless your age is nearing the triple-digit mark, your only experience with a financial meltdown of this order has come from reading history books, not the latest headlines.
At this point, nobody's holding out much cause for optimism. For example, when asked at a recent industry conference to point to one good thing about this historic global economic downturn, market analyst John Larkin of Stifel, Nicolaus & Co., who is typically ready with a thoughtful and articulate response, had to pause. The audience could almost hear the wheels turning in his head. A few seconds later, he responded, "Well, I guess we could say that if there is any good news, it's that every day we are in this situation, we are one day closer to being out of it."
So there it is—perhaps the closest thing we have to a silver lining in this very dark economic cloud. That goes a long way toward explaining the wave of pessimism that's engulfing businesses from one end of the Earth to the other.
The readers of DC VELOCITY are no exception. As reported by Editor at Large James Cooke in our annual Economic Outlook report (see page 32), our readers, who represent a cross-section of the highest-ranking logistics professionals in the country, say things look very bleak indeed. Nearly eight out of 10 readers polled indicated that they were either pessimistic about the economic outlook for 2009 or were uncertain where the economy was headed. When asked about the U.S. economy's growth prospects for 2009, just 3 percent said they expected robust growth. (We are still trying to find them to determine if they are, in fact, under the care of Elvis Presley's pharmacist.)
Let's remember, though, that economic trends can only be seen in hindsight.We can't really tell what's happening until several months after whatever happened took place. Consider that last year at this time, the cover of this very magazine carried a headline that asked: "Is a recession on the way in '08?" What's ironic about that headline is that what we were suggesting as a likelihood was already a reality. As we have since learned, the U.S. economy has officially been in recession since December 2007. That means that when we published that issue, we were already two months into the downturn.
Even so, we got a lot of flak for that headline—not only from readers and advertisers, but also from members of our own staff. Many thought we were being overly pessimistic. The economy could just as easily turn up in 2008 as turn down, they argued. We didn't disagree; we simply felt the indicators pointed down, not up. Unfortunately, as we all know now, we were right.
That brings us back to Larkin. If indeed the best thing we can say about the current state of economic affairs is that each day that passes brings us one day closer to recovery, at least we have the consolation of knowing that we have something like 441 days of downturn already behind us. That's my story, and I'm sticking to it!