Welcome to the year of economic recovery. We know; 2010 actually was the year of recovery in global trade and economic demand. But apparently many of us didn’t get the message strongly enough, so welcome to the recovery, circa 2011.
Reading over the repeated anxiety-ridden comments from many corporate leaders in trade and transportation in the second half of 2010, and the halting projections of many experts in our Annual Review & Outlook edition coming out next week, you’d think an economic upturn never really took hold last year.
Some of that caution is understandable, given where we’ve been. The financial industry collapse in 2008 and the subsequent collapse in trade was a shock to the economic system, and left behind a kind of post-recession stress disorder. Yes, unemployment and home sales numbers are weak, but it’s unclear whether those poor figures are lowering confidence in the economy or are a consequence of that lack of confidence.
Yes, the 2.6 percent annual GDP growth rate in the third quarter was hardly stellar, but it was a jump from the 1.7 percent growth in the second quarter and hardly cause for collectively wringing our hands over the lack of adequate growth.
Businesses built on trade and transportation can see the economic recovery right in front of them.
In rapid order in recent weeks, ports from Savannah and Charleston in the Southeast to New York-New Jersey in the Northeast, Vancouver, British Columbia, and Seattle in the Pacific Northwest and Los Angeles-Long Beach have reported some of the best container volume numbers in two years. The Port of Savannah had its best November for container volume since, well, ever. Imports at the Port of Long Beach in November were nearly double — up 84 percent — the level of loaded inbound TEUs the port saw in February 2009.
That’s why we were glad to see FedEx chief Fred Smith last month tossing most of that post-recession hesitation to the wind. “We’re now more bullish about the remainder of the (fiscal) year, based on our record-setting peak volumes and greater anticipated customer demand for our services,” Smith said in a conference call with investment analysts. “We also are increasingly upbeat about longer-term, more positive economic trends . . . Overall, the global economic picture is increasingly more positive as recovery continues at a steady pace.”
That’s the message that needs to get out to companies that in many ways are operating as if it’s still October 2008 and cash still must be hoarded under corporate mattresses. After all, collective profits reported by U.S. companies reached a record $1.67 trillion in the third quarter, 28 percent ahead of last year and the seventh straight quarter of growth. The Federal Reserve said non-financial companies held $1.93 trillion in cash and other liquid assets in September, and Goldman Sachs said companies in the S&P 500 were holding a record 10 percent of their assets in cash.
In other words, businesses should be worrying less about whether a recovery has truly arrived and more about capitalizing on the rebound right in front of them.