Afternoon Coffee: Trump Causes Manufacturing Turbulence, KPMG and Ivalua to Partner Stock

President-elect Donald Trump used his Twitter account Tuesday to question the price tag on the new Air Force One being built for “future presidents,” suggesting he would cancel the order. The new aircrafts would cost “more than $4 billion,” Trump said. Boeing countered that its current Air Force One contract is worth only $170 million and that the final price of the project is still undecided, since the military has not decided how many of the planes it wants or what “bells and whistles” will be necessary.

Spend Matters does not currently recommended procurement organizations use Twitter as their contract lifecycle management (CLM) solution.    

Aircraft, Factory Orders Flying Higher

While Trump’s tweet may have rattled Boeing, both the Chicago-based manufacturer and the broader airline industry actually have plenty of good news to go around: Civilian aircraft orders nearly doubled, causing new orders for manufactured goods to rise for a fourth consecutive month, according to the Commerce Department.

“Orders for civilian aircraft and parts jumped 93.8% to $21.8 billion, reflecting in part the Boeing deal to sell 14 freighters to shipping giant UPS,” Industry Week reported. “Total orders rose a solid 2.7% to $469.4 billion, considerably faster than the pace of the prior two months and surpassing an analyst consensus forecast, which had called for a 2.5% increase.”

KPMG and Ivalua Partner to Improve S2P Capabilities

KPMG and Ivalua announced an alliance Tuesday designed to help procurement departments realize cost savings, automate source-to-pay (S2P) processes and better mitigate risk, according to a press release.

Partnerships such as this are a 'win/win' for the market," Spend Matters Founder and Head of Strategy Jason Busch said of the news. "The increasing diversity and capabilities of source-to-pay procurement technologies combined with individual organizational needs makes 'one size fits all approaches' less appealing than before. Consultancies such as KPMG are doing their clients a service by partnering with a range of providers offering unique capabilities, and technology providers like Ivalua are bringing benefits to their customers and reducing implementation risk by working with experienced, third-party advisory and technology professionals."    

Wages Show Signs of Growth

Finally, a few numbers that should interest those sourcing new procurement talent or contingent workers. The cost of labor in the U.S. grew more quickly than previously thought in the spring and summer, new Labor Department data indicated, adding to earlier signals that Americans’ wages are finally picking up.  

Non-farm business productivity grew at a 3.1% seasonally adjusted annual pace in the third quarter, the biggest gain in two years. Economists had expected the revised figure to show a 3.3% increase. Unit labor costs grew at a 6.2% pace in the second quarter, up from the prior estimate of a 3.9% increase.

That last number, in particular, only strengthens the case for the U.S. Federal Reserve to raise interest rates at its upcoming meeting.

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