The economy is enjoying its 80th month of economic expansion and doesn’t show any signs of slowing, at least through this year, says Bob Dieli, president and founder of RDLB inc.
Dieli, speaking at the Heavy Duty Aftermarket Dialogue in Las Vegas Monday, benchmarked Truckable Economic Activity (TEA) at $10.6 trillion, calling the odds for a recession through September of this year “very low.”
Class 8 truck sales, often an economic indicator, have fallen off dramatically in the past three months. But Bill Strauss, senior economist and economic adviser, Federal Reserve Bank of Chicago, said recently he doesn’t foresee an “economic event horizon” in the foreseeable future.
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“I continue to think you have to distinguish between (OEMs),” Dieli adds. “There have been some issues on supply.”
Additionally, Dieli says it’s logical to assume that buyers who have pushed truck orders over the past 2 years simply have all the trucks they can use.
“The question becomes this far into the expansion, having had several strong years (of Class 8 truck sales), how many people are still out there that want to buy a truck,” he says. “You can only sell them so many trucks.”
Dieli says economic expansion is always followed by a period of “boom,” which he calls the area where the economy starts showing instability and is followed by recession. He adds he doesn’t foresee a shift from expansion to boom in 2016.
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“We are getting into a position where we will have a boom,” he says, “but I don’t see it happening in 2016.”
TEA, Dieli predicted, will continue to expand this year at a pace similar to 2015, cautioning the industry not read too much into employee cutbacks from OEMs and the trucking industry as a whole.
“The fact that economy is growing doesn’t mean everybody is growing, first, and growing at the same pace, second,” Deili says.