December Market Insights

Key Summary

• Purchasing Managers' Index climbs to 49.7, held back by a slowdown in new orders
• U.S. consumers spent $41 billion on holiday shopping, up 8.2% from 2023
• WarehouseQuote's Inventory Control Team provides helpful tips for keeping accurate inventory data
• -2.6% decrease in the national average of warehouse storage costs in Q3'24 vs. Q3'23, according to the National Warehouse Pricing Index (WPI)

Manufacturing Sector Shows Renewed Confidence

S&P Global U.S. Manufacturing Purchasing Managers’ Index (PMI) climbed to 49.7, signaling a slowdown in the decline of new orders and improved demand conditions, particularly following the election of Donald Trump. While still below the neutral 50.0 threshold that indicates economic contraction, the PMI suggests the sector is nearing stabilization. Input cost inflation also slowed to its lowest pace in a year, as manufacturers look forward to growth under the new administration.

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Holiday Shopping Tops $41 Billion

Cyber Monday marked the biggest online shopping day of the year, with strong sales across various categories, according to an Adobe Analytics report. From Thanksgiving to Cyber Monday, U.S. consumers spent a total of $41.1 billion online, an 8.2% increase from 2023. Notably, both Thanksgiving and Black Friday saw record-breaking online sales, with Thanksgiving spending rising by 8.8% to $6.1 billion and Black Friday up by 10.2% to $10.8 billion.

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Trump Calls for 25% Tariffs on Imports from Canada and Mexico

Donald Trump has announced plans to impose a 25% tariff on imports from Canada and Mexico starting on his first day back in office, alongside a 10% tariff on Chinese goods. These new measures build on his campaign promises to raise tariffs as a strategy to encourage U.S. manufacturing. The move could trigger a return to trade tensions similar to those during his first presidency, potentially disrupting the United States-Mexico-Canada Agreement (USMCA) and escalating trade conflicts. Mexico and Canada might retaliate with tariffs on U.S. exports, particularly agricultural products, chemicals, and other goods. Increased tariffs are also expected to raise inflation, cost U.S. consumers billions, and harm manufacturers reliant on foreign components. Companies are already adjusting their strategies, with many reducing reliance on Chinese imports and shifting production to prepare for the anticipated tariff hikes.

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EXPERT SPOTLIGHT

5 Tips for Keeping Accurate Inventory from John Gossett, Inventory Control Manager at WarehouseQuote

Regular inventory reconciliations are essential for maintaining smooth?operations, avoiding costly errors, and meeting customer expectations. Here are my five tips for businesses to keep precise and up-to-date inventory records precise:

1. Regularly Conduct Cycle Counts - Schedule frequent, small-scale inventory counts instead of waiting for annual audits. At WarehouseQuote, we recommend a yearly physical inventory count and quarterly cycle counts. This helps identify discrepancies early and keeps inventory records accurate.
2. Maintain Real-Time Updates - Use inventory management software (IMS) to record purchases, sales, and returns. This will reduce manual errors and improve accuracy.
3. Standardize Procedures and Schedules - Develop clear processes for receiving, stocking, and tracking inventory. Train staff to follow consistent methods to avoid miscounts or misplaced items. Through the onboarding process, we work with our clients to optimize SOPs to drive operational efficiencies and ensure accurate data within their system of record.
4. Investigate Discrepancies Promptly - Address inventory mismatches immediately to identify root causes, whether it's theft, errors, or system issues, and implement solutions to prevent recurrence. Our inventory control team strives to reconcile our customers’ inventory on a monthly basis to identify inventory discrepancies as soon as possible.
5. Leverage Warehouse Technology, Robotic Processing and Data Entry Automation Solutions Utilize barcoding, RFID tag, and robotic processing automations (RPA) to streamline inventory management and minimize human error. This year, we launched a data entry automation software named briefli, that helps supply chain companies process documents faster and more accurately into your system of record (WMS, TMS, and ERP).

MARKET UPDATE

The Q4 ‘24 Warehouse Pricing Index Report

Earlier this quarter, we launched the Q4 ‘24 Warehouse Pricing Index Report helping logistics and supply chain managers make confident supply chain decisions with national and regional warehouse pricing insights. Check out the full Q4 ‘24 report in the link below.

Read the full report