The trucking market continues to go up and down as the industry faces an uncertain economic future. Economic experts have been excitedly saying the American economy is bouncing back, but the trucking industry is not experiencing that.
Outlook for Economy as a Whole
TD Economics issued an economic outlook showing the American economy is bouncing back with gusto after a slow start. Consumer spending and housing investment are leading economic growth in the second half of the year. As a result:
- Job growth will re-accelerate in the months ahead.
- Unemployment will be at a new low.
- Greater full-time job opportunities for those interested.
However, TD Economics projects economic job growth will barely average 2% over the next few years. How is this something worth celebrating?
TL Carrier Werner Enterprises said its second-quarter earnings are going to dip between 21 and 25 cents a share. Here are some of the reasons for that:
- Less freight is traveling due to sluggish market conditions.
- Driver and independent contractor pay increases are raising bottom line costs.
- Soft used truck market.
The vice president at Stifle said used truck prices are down 10% from 2015. Unfortunately, he expects them to fall even further.
A chief economist for the American Trucking Association found:
- Truck freight volumes have weakened since 2015 and growth this year will remain uneven.
- The combination of more trucks and soft demand is loosening industry capacity.
- Fleets will continue to experience rising costs.
- Pay increases are helping driver shortage, but long-term trends still show the need for more drivers.
Although, there are indicators that the trucking industry is not doing so well, there is no need for concern. There is still not enough data and analysis to adequately show what the economic future looks like for the trucking industry.
Source: Fleet Owner
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