Dr' Gene Huang, PhD

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Dr. Gene Huang, PhD
Global Access Economic Outlook and Business
Implications

• FedEx Chief Economist
• AUBER Fall Conference
• Memphis October 14-16, 2006

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The Global Supply Chainand the Trends Driving
the Economy

• Distance is an elastic concept
• Manufacturing process has become highly
  fragmented
• The essence of commerce is exchange

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Growth of Hi-Tech andHigh Value Goods
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Four Macro-Trends Reshaping the Global Economy
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Trade Globalization
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Four Macro-Trends Reshaping the Global Economy
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Internet TransformingGlobal Selling and Sourcing
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Four Macro-Trends Reshaping the Global Economy
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Supply Chain Efficiency
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Four Macro-Trends Reshaping the Global Economy
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Supply chain reliability and integrity have
become macro economic issues
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Access is Changing Whats Possible
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Access Time and Space Collapse,Information
Explodes
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Access and IT
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Access Has Risen Dramatically
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Impact of Access
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Perpetual Cycle of Access Generation and Expansion
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Global Economic Trends

• Global GDP shows above trend growth
• Global PMI and LEI continue to expand
• Regional rotation is taking place good for
  global balancing
• The U.S. and China remain as two anchor points or
  dual engine for global growth

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Global Economic Trends

• The big coming out party (BRIC) will continue
  for many years
• Economic growth ladder dictates commodity demand
• Infrastructure development and understanding of
  role-play in global supply chain are key to
  success

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U.S. State of the Economy and Near-term Momentum

• Typical mid-cycle environment
• Increasing costs (materials, capital, and labor)
  and structural inflation
• Strong corporate balance sheets
• Steady growth in the labor market and income
• Sector rotation still exhibits a slight growth
  bias toward the industrials and the durable
• goods sector
• Increasing competition and MAs

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Economic Outlook

• From above trend toward trend growth
• Slight bias toward more rate hikes in other
  industrialized countries
• The futures market now expects a 25bp cut of
  policy rates in the U.S. by May 2007
• Housing is unlikely to collapse Oil remains
  volatile
• New years entry point will help
• decide where growth in 2007
• will settle

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Challenges

• Does the current balance of payments accounting
  framework need to be revamped?
• Does the concept of core inflation rates need
  to be revisited?
• Has growth potential in the U.S. turned lower for
  the next decade?
• Last words From collective perception to
  collective behavior keep the
• animal spirits alive

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