At a Glance

March 29, 2022
2 min
At a Glance: Just-in-Time, or Just-In-Case?  

Over the past 30 years, corporations have built complicated ‘Just-In-Time’ systems. The current real time integration of manufacturing, inventory, labor, and capital has begun to show signs of strain. The new paradigm will require firms to evaluate more ‘Just-In-Case’ possibilities. A ‘wait and see’ approach has not rewarded corporations with increased value. Forward thinking firms should seek to lock in terms now and provide optionality for the next 12-18 months.

Production

  • 95% of Manufacturers are expecting same or higher prices (ISM)
  • 39% of Manufacturers expecting Increased backlog of orders (ISM)
  • Supply Lead times set record highs to 97 days (ISM)

Capital

  • Corporate bond rates have increased 193 bps since Sept 2021, amongst fastest rate rises in a decade
  • Mid-Market borrowers have indicated a ‘wait and see’ strategy as rates continue to rise
  • Mid-Market lenders have indicated they have not yet decreased their underwriting targets

SOURCES

https://www.ismworld.org/supply management news and reports/reports/ism report on business/pmi/february/

https://fred.stlouisfed.org/series/ BAMLH0A1HYBBEY

DISCLAIMER

The opinions expressed are those of Henon Financial Technologies Inc. (“Henon”). The information and/or analysis contained in this material have been compiled or arrived at from sources believed to be reliable but Henon does not make any representation as to their accuracy, correctness, usefulness or completeness and does not accept liability for any loss arising from the use hereof or the information and/or analysis contained herein. Henon disclaims any responsibility to update such information. Neither Henon or its affiliates, nor any of their directors, officers or employees shall assume any liability or responsibility for any direct or indirect loss or damage or any other consequence of any person acting or not acting in reliance on the information contained herein.

All overviews and commentary are intended to be general in nature and for current interest. While helpful, these overviews are no substitute for professional tax, investment or legal advice. Clients should seek professional advice for their unique situation. Neither Henon, Henon Capital Ltd., nor any of their affiliates or representatives is providing tax, investment or legal advice. Past performance does not guarantee future results. This material was prepared solely for informational purposes, does not constitute an offer or an invitation by or on behalf of Henon to any person to buy or sell any security and is no indication of trading intent in any fund or account managed by Henon. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Unless otherwise specified, all data is sourced from Henon.

The Stylized Henon Design, and Henon Logo are trademarks of Henon Capital Ltd.

Henon is a relationship first, tech enabled financial services company founded to help Canadian mid-market companies grow. Connecting #growthwithcapital