There are substantial “silver linings” to the historically slow economic recovery, the driver shortage and even to strict trucking regulations and the high cost of equipment, an industry economist told fleet executives and suppliers at the CCJ Fall Symposium on Friday. (Scroll to the end of the article for related slides from Meil’s presentation.)
“Our fundamental picture is that 2015 and beyond look to be good years for the industry,” says Jim Meil, principal of industry analysis for ACT Research.
And as he explained in his presentation, the “good times” will be based on an economy whose growth has lagged that which followed previous recessions, but this slow growth will prove to be sustainable for several more years.
Meil backed up the assertion with a variety of key indicators, including stock prices, industrial production and retail sales, all of which are trending positively for the U.S. However, he cautioned that some sectors and their corresponding geographic areas will see more activity than others. (Slide 1)
Indeed, the biggest risk is that the substantial increase in freight predicted for next year might “overheat” the market, particularly an anticipated boom year for truck production, leading to a steeper downward slope “on the other side.”
The bottom line: Meil forecasts GDP growth will surge to 3.4 percent in 2014 (up from 2.2 percent this year) and create a 5.3 percent gain in freight, after 2014 slipped to 3.3 percent growth, hampered by winter weather and a slow housing market. The rest of the decade should be “pretty good” as well, expected to average about 4 percent freight growth.(Slide 2)
“This is the picture of an industry that – if the forecast comes through – will see ongoing prosperity,” Meil says.
