Truck and Transportation Industry Enjoys Slow Economic Recovery, Yet Challenges Remain
Digging out of the recession has been a chore for just about every industry, including truck and transportation. But it is happening slowly.
In a recent panel discussion among economists in Las Vegas at the American Trucking Association’s Management Conference and Exhibition, the forecast for the truck and transportation industry was laid out. The growth is expected to be at around two percent GDP through the end of 2013. This is assuming that there are no economic meltdowns domestically or overseas.
But there is one threat on the horizon that is not thrilling the truck and transportation industry, and it relates to the Budget Control Act of 2011. At the end of 2012, the terms of the Act will go into effect, which means the tax cuts that were a positive revenue generator for the truck and transportation industry will wind down.
The panel at the Management Conference and Exhibition expressed their confidence that both sides of the aisle in Washington D.C. would prevent a reversal. However, should one side hold out, it’s possible that 2013 will include quarters of negative growth.
At the same time, there are issues out of the control of Congress, and those include challenges in other countries that could affect the truck and transportation industry stateside. The manufacturing industry is greatly affected by what happens overseas and across borders, which in turn affects how the trucking industry does its business.
If the EuroZone and China see upticks in 2013, the U.S. will also feel a positive reaction, especially in the truck and transportation industry. But there is also a possibility that Greece will continue its economic slide away from the Euro, which will likely negatively affect the U.S.
But it’s not all bad news. The housing industry is looking up, which is a positive for flatbed freight. Home sales were on the rise by about 10 percent over last year. And while new housing is seeing 25 percent growth, it hardly compensates for the losses it spelled out for the vehicle delivery industry over the last several years.
The truck and transportation industry has seen nearly a nearly four percent rise in tonnage over the last year. A majority of these gains have been through flatbed and tank trucks, which accounts for why the number of load volumes industry-wide are down by just over 4.5 percent.
According to the panel of experts, the recession has shrunk the industry to such a degree that if the economy took a wild turn upward and business started booming, there would likely not be enough trucks to keep up with demand.
At Spirit Miller, we’re anticipating that uptick and are on an aggressive hiring initiative to support our growing client base. For more information, contact us today.