Trucking Trends Signal Gradual Economic Recovery

Recent data suggest that the economy is trending upward, albeit slowly.

Recent reports indicate a stable to slightly improved outlook for the economy’s recovery. In their June, 2012 report, FTR Associates, a leading transportation forecasting company, reports a 2.7 point increase in their Trucking Condition Index for April. The Index analyzes various factors that affect trucking conditions. Any number above zero shows positive conditions for truckers, while numbers over 10 indicate very favorable conditions. The April increase brought the indicator up to 9.1.

A separate FTR index which follows total freight movement between manufacturers and end users also indicates a positive direction for the economy. Since a year ago April, the volume of truck loads has increased 3 percent to 115.9. The number is the highest it has been since 2008.

A third report by the American Trucking Associations also points to a gradual economic recovery. Their truck tonnage index showed a 2.8 percent rise in April, which indicates 29 straight months of growth.

The positive signals come in spite of a .2 percent drop in retail sales and continuing concerns over the financial stability of the Eurozone. Although April’s sales were originally reported as a gain, the figures have since been revised downward. May figures also show a .2 percent decline in U.S. sales. Analysts suggest the decline in sales reflects prudent inventory and purchasing decisions rather than a deteriorating economy.

The data match anecdotal evidence from trucking industry insiders. Carriers report strong freight demand in late May after a lackluster start to the month.

Some associated industries are also reflecting the positive trend. TravelCenters of America LLC attributed their improved financial condition for the first quarter of 2012 to increased trucking activity. Although TravelCenters reported a loss, they specifically cited increased truck activity and the improved financial condition of the trucking industry as factors that narrowed that loss.

Landstar Systems indicated in their mid-quarter report that the economy is moving in a positive direction. The trucking firm indicated the recovery was occurring at a slow but somewhat choppy pace. As a result of the positive movement, Landstar indicated second-quarter earnings of 71-76 cents per share. This is an improvement over the 57 cent first quarter earnings.

Heavy duty truck sales mirror the promising trend for the trucking industry and by extension the U.S. economy. For May, Volvo reported a 31 percent increase in sales over last year. Their Mack division reported a sales increase of 80 percent. Freightliner sales were up 8.6 percent from April, Peterbilt 2.2 percent, and Kenworth 2.3 percent.

With both hard numbers and anecdotal evidence, it’s clear that the trucking industry is holding strong. With historical precedent behind them as reliable indicators, the state of the industry bodes well for the nation’s economic future.

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