While some current economic indicators don’t paint a rosy picture for trucking in the next few months, it’s not as bad as the previous market turndown, according to Bob Costello, chief economist at the American Trucking Associations.
“Is trucking predicting another recession? I don’t think so,” Costello told members of NATSO on Thursday, Feb. 1, at the National Truck Stop Association’s annual meeting in San Antonio.
While for-hire freight tonnage is down significantly from record highs in 2005, Costello said, year-over-year freight tonnage is not down nearly as much as it was during the most recent recession, which ended in 2003.
“We just don’t see the magnitude of factors we had in the last recession,” Costello said. “It just doesn’t show we’re heading into a new recession.”
Tonnage numbers are down in part because of a declining housing market, which has greatly affected the flatbed sector, Costello said. The strong tonnage figures of 2005 were thanks in part to the goods shipped to the Gulf Coast after Hurricane Katrina, Costello said.
Truck shipments, as opposed to tonnage, are down only .2 percent, Costello said.
Truck sales are expected to drop after the record year of 2006, mainly because of the U.S. Environmental Protection Agency’s lower-emissions engine regulations that went into effect in January. While Costello wouldn’t predict the number of trucks that will be sold in 2007, he said he’s seen forecasts around 150,000 units in North America.
Projections of 2007 real GDP – the gross domestic product adjusted for inflation – show growth, but slower than in recent years at 2.3 percent, Costello said.
“The good news is that 2008 is looking much better than 2007,” Costello said. And for the long term, he said, the picture is even brighter. In the next decade, freight tonnage is expected to increase 31 percent, resulting in trucks hauling 14 billion tons annually by 2017, Costello said.
Alsaker has been in the truck stop industry since 1972 when he joined his parents in the family business, launched in 1963. He has served as the chairman of NATSO’s Government Affairs Committee and the NATSO board, and has been a member of NATSO’s Hall of Fame since 1996.