The rate of growth in a number of logistics measures dropped significantly last month, surprising business experts who say the fourth quarter has historically been a time of rising business activity driven by the holiday peak shopping season.

While the logistics industry is still expanding, that trend slowed down in November to an index value of 66.66 from its October level of 69.01 and its September level of 70.22, according to the most version of the "Logistics Manager's Index" (LMI), released Dec. 5.

The LMI is a monthly measure of economic activity across eight variables in the sectors of inventory, warehousing, and transportation. It measures data generated by a monthly survey of leading logistics professionals, then analyzes the results through a diffusion index that is above 50 if a sector is growing, and below that threshold if it is shrinking.

Launched in 2016, the report is issued by researchers at Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, and in conjunction with the Council of Supply Chain Management Professionals (CSCMP).

The November edition of the LMI revealed that growth continued across the logistics sector in November 2018, but at a considerably decreased rate, according to the survey's authors. Specifically, the numbers show a significant drop in the rates of growth for the metrics of transportation prices (down 8.2 points), transportation utilization (down 6.6 points), and inventory costs (down 7.9 points). Together, that evidence suggests that the logistics industry is expanding, but at a much slower rate than it has been over 2018, the report found.

"While most of the logistics components are still growing, the rate of growth substantially slowed down this past month," Dale Rogers, a business professor at Arizona State University and co-founder of the LMI, said in a release. "This slowdown marks an interesting change. We do not know if this is a one-time occurrence, or if it is the beginning of a downward trend."

Measuring logistics activity is an effective way of predicting future moves in the greater economy because it shows exactly how much inventory businesses are moving and storing, in anticipation of imminent sales, Rogers said in an interview. That makes the LMI a "leading indicator," in comparison to other economic measures like gross domestic product (GDP), which is classified as a "lagging indicator" because it measures productivity that has already occurred, he said.

"The fact we saw a leveling off of growth during the fourth quarter when you wouldn't expect to see that was significant because November is typically a month with a lot of shipping inventory, when warehouses are near capacity. So to see the big changes was quite surprising," said Rogers. "Changes in transportation, warehousing, and inventory are predictive of something happening, especially when they move together," he said. "It feels like we're heading toward an inflection point."

The results mirror several other cloudy economic forecasts that have been released in recent weeks, including an economist who tracks material handling equipment manufacturing (MHEM) data for industry group MHI, the quarterly "Global Trade Barometer" released by German transport and logistics giant Deutsche Post DHL Group, and the monthly "Global Port Tracker" report produced by the National Retail Federation (NRF).

Likewise, the sample of North American logistics executives captured in the LMI index warn of the potential for economic conditions to retreat from their unsustainably high values through much of 2018, and possibly even to decline.

"It's not that we're going into a recession necessarily, but the rate of growth has significantly slowed," said Zachary Rogers, an assistant professor of Supply Chain Management at Colorado State University and another study author. "We don't know yet if it will just flatten out or continue to drop, but this does look like what it's like before a recession. Put another way, we don't know that it's going to rain, but it is looking cloudy."