Afternoon Coffee: PMI sees expansion in May; Pinnacle Model topic of ‘Lunch and Learn’ series with Everest Group; U.S. economy may need 10 year recovery; Thoma Bravo acquires Exostar

The PMI report for May was released this morning, with the index standing at 43.1%, according to the Institute for Supply Management. This is above the 41.5% in April, but any number under 50 is still considered a contraction. While the manufacturing sector suffered in May, the overall economy began to bounce back after bottoming out in April, which ended 131 straight months of growth. Most sector indexes read higher than they did in April, including the New Orders Index (31.8%), Production Index (33.2%) and Employment Index (32.1%).

Although demand contracted in May, consumption increased as non-essential workers returned to their jobs later in the month following lockdowns caused by the coronavirus. Six of the 18 manufacturing industries reported growth in May (including apparel, food and paper products), but the others reported contractions (including computer and electronic products, primary metals and fabricated metal).

Part 2 of the ‘Lunch and Learn’ contingent workforce series with Everest Group debuts

How are some organizations generating superior results through new ways of getting work done?

Spend Matters and Everest Group experts continue to share collective insights on the question of contingent workforce management in the second episode of a 3-part video series. Learn more about the Everest Group's Pinnacle studies, which are geared towards evaluation of enterprise-to-enterprise "understanding the capabilities and the impact that organizations are getting from implementing the practices around the contingent workforce."

Everest Group's Chief Research Officer Michel Janssen and Vice President Arko Basak are joined by Spend Matters' Chief Research Officer Pierre Mitchell and Research Director for Contingent Workforce & Services Issues Andrew Karpie to discuss the Pinnacle Model practices for contingent workforce management.

View video two of the “Lunch and Learn” series now. Part one covered the macro view of the contingent workforce, and part three will debut next week, covering vendor and technology options.

U.S. economy could take a decade to recover

The Congressional Budget Office has said that the U.S. economy could require most of the next decade to recover from damages caused by the coronavirus, CNN reports. The CBO warned that disruptions from the pandemic will reduce the cumulative economic output by about $7.9 trillion (3% of GDP) over the next ten years.

Reduced spending from business closures and social distancing will play a part in the drop of output, and the recent $2 trillion stimulus package will only do so much to mitigate the damage, the report said. However, the CBO said that there is a large uncertainty around the forecast due to the unique and unknown factors of the pandemic.

Thoma Bravo acquires Exostar

Thoma Bravo, the private equity firm, announced today that it has acquired access management provider Exostar, The Wall Street Journal reports. The deal is expected to be valued at around $100 million. The acquisition will allow Exostar to accelerate business growth, and Thoma Bravo hopes to utilize Exostar’s cloud-based technologies to expand the company’s current capabilities to further growth, particularly in cybersecurity.

Exostar’s President and CEO Richard Addi said in a press release on the announcement: “Together, we plan to accelerate time-to-market for the Exostar suite of solutions that enable global enterprises to execute their mission-critical supply chain and drug development initiatives."

Oil tankers idled along Chinese coasts as demand surges

China is rapidly ramping up oil production as the country gets back to work and demand for fuel grows, Supply Chain Brain reports. More than two dozen oil tankers are lined along China’s ports to offload crude for refiners. Demand for oil in May had almost recovered to pre-coronavirus levels.

The ships arrived in late May and have been idling off of ports with about 4 million tons of oil each. Experts think the queues to unload crude may get even longer as the Chinese economic recovery from the pandemic continues, and the highest number of supertankers since 2017 continue to converge on ports.

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