Economic growth in logistics slowed for a second straight month in August, marked by cooling inventory levels and rising cost pressures, according to the latest Logistics Managers’ Index (LMI) report, released this week.
The LMI was 66.6 in August, down more than two points from July’s reading of 68.9 and more than four points from June’s four-year peak of 71.1.
The LMI is a monthly measure of economic activity across warehousing and transportation markets based on a survey of U.S. logistics managers. An LMI reading above 50 indicates expansion across the industry; a reading below 50 indicates contraction.
The August slowdown stems from slower growth in inventory levels, which fell more than two points to a reading of 52.8. Companies across the industry had built up inventories in June and have since eased back, driven largely by upstream firms that reported mild contraction (49.0) in inventory levels in August, the LMI researchers said in their monthly report.
Costs pressures intensified during the month, as well, and reflect the effects of recent tariffs and the conflict in the Middle East. The LMI’s three cost indices continued to show “very robust growth” in August, according to the report: Inventory Costs rose nearly two points to 78.6, their second-fastest rate of expansion in 12 months; Warehousing Prices continued to rise, reaching a reading of 75.0; and Transportation Prices rose more than three points to a reading of 90.0.
“Essentially, this month’s report paints a picture of logistics costs that seem to be rapidly increasing no matter what the underlying situation is,” the researchers wrote.
The LMI is based on a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
Logistics Managers’ Index
