Reading the Tea Leaves: Logistics as a Leading Economic Indicator
Logistics Management Professionals:
The Logistics Manager’s Index Offers New Insight into Economic Growth
Logistics management professionals have long understood that the relationship between their industry and the economy is filled with complexities. It’s also one filled with a large reservoir of data that can help gauge where the economy might be headed. Tapping into that data and viewing logistics as an economic indicator is the goal of a new index launched in September 2016 by five universities and supported by the Council of Supply Chain Management Professionals.
The Logistics Manager’s Index (LMI®) is based on monthly data collected through a survey of senior-level supply chain executives. The index score is a combination of components of the overall supply chain, including inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The LMI is then calculated using a diffusion index. A score above 50 indicates growth or expansion, and a score below 50 indicates that the logistics industry is contracting.