US Economy Keeps Moving But At Slower Pace
At the Truckload Carrier Association convention, John Larkin from Stifel, Nicolaus and Co., addressed the audience about what is coming in the next 12 to 18 months in the US Trucking Industry. According to him, it is good news and bad news.
“The US is not growing at a break-neck pace,” he said. “Our currency is strong so it makes it hard for us to export because everything we build or grow or manufacture is 25% more expensive than it would be had the currency not taken this big powerful move.”
He believed that the two major indicators of economic growth were population and productivity and at this point, both don’t seem to be pushing forward. Productivity persist to decline as the unemployment rate seems to stagger every other month whereas couples are not getting married or marrying late or not having children.
Larkin in addition also revealed that customers’ confidence continues to decline as they believe another big recession is just around the corner; however, that is not the case. But despite the slow and steady future, customers are still shying spending much at gas stations as they used to back in 2000s. “People really aren’t spending what they’re saving at the gas pump,” he said.
Larking also pointed out that his research and the current economic state doesn’t point onwards a recession even when people are not spending much.
“The rule of thumb here is all economic recessions are preceded by freight recessions, but not every freight recession predicts an economy recession. It looks like we are going to scrape by without a (economic) recession,” he said.
Repeating his words over and over again, he said, “The future economic scenario will be continued slow, steady growth, because there doesn’t appear to be a catalyst to push us off a cliff into a recession barring some sort of terrorist event or external issue.”
So if most of Larkin’s predictions come true and the economy continued to move forward with a slow pace, he believes that the shortage of professional drivers will be the reason for the suffocation of the trucking industry.
In his concluding statement he said, “Driver shortage continues to be a huge problem. It is not going away with the slowdown in the economy. It’s no secret; the quality of drivers is declining. (We will be short) 250,000 drivers by 2022, which is rapidly approaching.” – See more at: http://truckernews.com/us-economy-keeps-moving-but-at-slower-pace-p756-90.htm#sthash.i9s5fx8j.dpuf