UPS figures point toward US economic growth

By Freddie Pierce
Statistics from UPS, a worldwide leader in shipping and logistics, show that the United States economy could finally be starting to show some positive...

Statistics from UPS, a worldwide leader in shipping and logistics, show that the United States economy could finally be starting to show some positive growth.

Average daily volume for UPS’ next-day air packages “grew at a mid-single digit rate,” according to UPS. Growth in next-day shipping, a premium service, is a sign of economic confidence, according to UPS CFO Kurt Kuehn.

“We’ve been pleased with the package component of our next-day air service, and that’s really reflecting some increased velocity of the core economy,” Kuehn told Bloomberg.

“In the U.S. domestic segment, we expect average daily volume to increase approximately 2 percent for the second quarter with continued strengthening in the second half of 2011,” Kuehn said. “For the full year, next-day air and ground are expected to grow at a similar pace.”

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The growth indicates that businesses and consumers are more willing to pay a premium for faster shipping, which could indicate an increase in discretionary spending, a leading indicator of economic growth.

Charles Clowdis, managing director of transportation advisory services at IHS Global Insight, told Bloomberg that the U.S. is in a “consistent and steady expansion period,” and that UPS’ figures show “an excellent sign there is confidence in the economy.”

“People are willing to pay up for faster, premium service even though higher energy prices have resurfaced this year,” Clowdis said.

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