You and I don’t need to see charts to figure out that our economy is in deep trouble. Nevertheless, here are two that show that we are facing some headwinds and the impact of that is going to be felt in the tech economy as well. In a note to their clients this morning, Macquarie Capital’s research group pointed out:
Demand for power generation in the US (Y/Y growth in demand, excluding weather-related usage) has historically tracked closely with GDP growth and declines over the past several months suggest that GDP growth will remain muted, at least over the near term.
FedEx and UPS shipment trends represent another indicator of consumer purchasing behavior. Shipping volume fell off dramatically in both shippers’ largest segments during the last downturn in ’08-’09 (with a more rapid and deeper impact at FDX); domestic express volume growth turned negative at FedEx in the firm’s fiscal fourth quarter ’11 (ended April ’11) and continued to decelerate through the August quarter.
More importantly, FedEx cited a more cautious outlook for volume trends through the holiday season and into early 2012. Underpinning the weakening volume trends is a slowdown in consumer demand, particularly related to consumer electronics items manufactured in Asia and shipped to U.S. consumers. FedEx CEO Fred Smith’s quote from the call (on this year’s holiday shipping season): “We don’t anticipate a significant peak this year.”
FedEx/UPS data portends bad news in particular for e-commerce companies, which in turn can have reverberations through the rest of the tech ecosystem.