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Area Development - Site Selection, Facility Planning and Workforce Development

August/September 2009 Editors Note: Have We Hit Bottom?

Aug/Sep 09
In a vote of confidence on the economy, in mid-August, the Federal Reserve held a key bank lending rate at a record low near zero. Fed sources said that since their last meeting in June, economic barometers indicated, "Economic activity is leveling out." This is the most upbeat economic assessment by the Federal Reserve in more than a year, although the central bank warned that the recovery would be slow and unemployment was likely to remain high for the next year.

More encouraging news: An early August survey of the U.S. manufacturing sector showed it is poised for growth. The Institute of Supply Management's index of manufacturing activity rose to 48.9 percent in July from 44.8 percent in June - closer to the 50 percent level that separates a contraction from an expansion.

If we truly have hit an economic bottom, and there's nowhere to go but up, now might be the time to position yourself for your company's next move, including where to locate your distribution hubs. In our cover story this month, "The Evolution of the Global Supply Chain," Tim Feemster, senior vice president and director of logistics at Grubb & Ellis Co., tells us that the time is not only right to renegotiate your leases to reduce costs, but also to look at your supply chain network holistically. He explains the trends affecting today's supply chains and the five-step process of optimizing your network to support your company's long-range strategic goals. Other articles in this issue also address specific infrastructure concerns - e.g., highway access and proximity to markets and suppliers - and how they affect the site selection decision.

Investment in infrastructure through the American Recovery and Reinvestment Act (ARRA) is just one of many methods the federal government is using to stimulate the economy. Its expanded role in economic development, as well as how that impacts corporate location decisions, is also discussed in detail this month by experts at Deloitte Consulting.

The Obama administration credits its economic stimulus efforts with "helping put the brakes on the recession." However, in his somewhat obtuse style, Vice President Joe Biden did tell members of the press that "less bad is not good."

Although that's a valid point, "less bad" is positive news today and could mean that it's time for corporate executives to start putting growth plans in motion. We hope "less bad" truly translates into good news ahead.

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