Trucking companies should take advantage of today’s economic recovery because it will be relatively brief by historical standards, and then the economy will fall back into recession, an FTR Associates economist forecast said April 19 in a CCJ online seminar.
“You better make hay now because after two or three years we’ll be right back in recession,” said Noel Perry, FTR managing director and senior consultant. “You only have a few years to put aside savings you’ll need for the next downturn.”
One reason he’s pessimistic is the weak housing industry outlook. Housing ownership is down and housing starts will remain low for many years to come. Construction and housing, which accounts for 14 percent of trucking freight, represented 37 percent of trucking’s decline since 2006.
Another problem that will make for a volatile market is the high level of federal debt and its impact on long-term interest rates. “Sometime in this decade, probably after the next election, we’re going to have to confront this problem,” Perry said.
Until that happens, trucking stands to prosper in the next few years. Manufacturing growth is outpacing nonmanufacturing and contributing to freight increases for trucking and other transportation sectors, Perry said.