Afternoon Coffee: ISM report says economy expected to grow in 2021; First-time jobless claims reach new pandemic low; Bridge issue reveals cracks in supply chain infrastructure

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The Institute for Supply Management’s (ISM) Spring 2021 Semiannual Economic Forecast, which was released this week, pointed to ongoing economic growth through the rest of 2021, according to the website Logistics Management.

Data for the ISM economic report comes from feedback from US-based purchasing and supply chain executives in both manufacturing and non-manufacturing sectors. The report estimated a 7.2% revenue gain for 2021 in manufacturing. Meanwhile, services revenue is expected to increase 5.4%, the article said.

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These two numbers are higher than expectations set in December 2020, the ISM economic report said.

“This is an excellent report, no doubt about it,” said Tim Fiore, Chair of the ISM Manufacturing Business Survey Committee, Logistics Management reported. “Optimism is better in May than it was in December 2020, in terms of the growth projections and the rate of change. Revenue and capex were very strong, as was capacity utilization, which were offset by price increases inability to hire labor. Post-pandemic, we thought we would see a 10% decline in 2020 revenue, but ended up with a 1.3% decline, and now we have a 7.2% revenue gain projected for 2021.”

First-time jobless claims register 444,000 last week, marking new pandemic low

The Labor Department reported Thursday that the number of Americans seeking unemployment aid fell to 444,000 last week, signaling a new pandemic-era low in a sign that the job market continues to strengthen, according to the Associated Press.

Applications declined from a revised 478,000 number a week earlier. The number of weekly jobless claims — a number that roughly measures the pace of layoffs — has continued to decline since the start of 2021.

About 16 million people continued to receive unemployment benefits during the week ending May 1, the article reported. That number is lower than 16.9 million from the week earlier, indicating some Americans receiving aid have found jobs.

All told, the economy appears to be on a better track as consumers spend more and the pace of vaccinations means more businesses are open. The unemployment rate sits at 6.1%.

Bridge issue reveals cracks in supply chain infrastructure

Recent complications in infrastructure in the eastern US have slowed freight movement and increased surcharges, becoming evidence of how quickly problems can cascade through supply chains, according to Supply Chain Dive.

A bridge over the Mississippi River had a crack running through a steel support beam, causing an investigation that paused all motor traffic on the bridge and even water traffic below it. The roadway is an important link in the American supply chain — it allows freight movement between the East Coast and Southwest and from the Midwest to the Gulf Coast.

Experts are using the bridge and the recent Colonial Pipeline ransomware attack as evidence of the importance in investing in infrastructure to continue helping boost supply chains after various disruptions in the last year.

"There is no alternate route to the Mississippi River," Thomas Goldsby, a supply chain professor at the University of Tennessee, told Supply Chain Dive. "And so if that had been an extended shutdown, that was going to cause some very severe problems on a transportation mode that frankly, most people don't think that much about."

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