An economic activity index for the material handling sector showed mixed results in December, following strong reports in October and November, according to a release from business forecasting firm Prestige Economics.
Specifically, the most recent version of the MHI Business Activity Index (BAI) showed December contractions in the areas of capacity utilization, shipments, unfilled orders, inventories, and exports. But on the upside, there were expansions in business activity, new orders, and future new orders.
The report gave an array of reasons for those quantitative results, judging by respondents’ accompanying “qualitative responses.” That part of the survey included positive references to lower interest rates, the clear outcome of the election, and improved abilities to retain workers. But those were counterweighed by downside mentions featuring multiple references to tariffs, reflecting broad skepticism in the business community to trade threats made by the incoming Trump administration.
Looking into the future, forecasts for a drop in interest rates and a likely accompanying drop in the dollar are likely to support material handling and manufacturing, which have been held back in recent quarters by high interest rates and a strong dollar, the report from Austin, Texas-based Prestige Economics found.
Likewise, hiring ease was strong in the survey, as a record high 81% of respondents reported hiring in December was “easier” than in November. That improved ease of hiring will be particularly important as the “new orders” category is likely to rise in the year ahead, the report found.
