US research company FTR has determined a continued softness in the North American trucking market, mainly due to drops in fuel cost and a modest decline in demand.
However, FTR also said it was expecting conditions to rebound by summer as economic growth improves, truck demand stabilises and capacity tightens further.
“Recent data on the economy has been mixed with Q1 GDP coming in substantially weaker but sales and employment picking back up to start Q2,” commented Jonathan Starks, FTR’s Director of Transportation Analysis.
“This recovery has been unusual in that Q1 GDP has generally been much weaker than the growth seen the rest of the year. This gives us optimism that the truck markets will not be significantly slowed, although it is likely that manufacturing output will be less strong in 2015.”
He added, “This will be especially true for exports of US goods, as the dollar has risen over 20 per cent in the last year and our goods are now more expensive and less competitive in global markets.
“We are also keeping an eye on sales and inventories data because, so far, the drop in fuel costs has not directly translated into large gains in consumer spending. If consumers save that cash, it will likely mean another year of slow and steady economic growth.
“However, if production doesn’t slow to follow suit, then we will get an inventory glut that will have to be quickly worked down. If they start spending, it could help fuel another surge in economic growth like we saw last year.”