Outlook for Trucking is Stellar, ATA Economist Says
The trucking industry is seeing the best economic climate since deregulation, according to Bob Costello, chief economist and senior vice president of the American Trucking Associations.
Speaking at the opening session of Omnitracs’ Outlook 2018 user conference in Nashville on Feb. 26, Costello said the trucking industry should face smooth sailing over the next year or two. “This is a growing environment,” he said, noting that the economy is in its third-longest expansion in history— which is on track to becoming the second-longest by springtime.
ATA Chief Economist Bob Costello tells attendees at the Omnitracs Outlook 2018 user conference in Nashville that trucking should face smooth sailing over the next year or two. Photo: Jim Beach
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From a macroeconomic view, the two key drivers are productivity and population growth, he said, with those two indicators suggesting GDP growth of about 2.3%. Instead, the economy is chugging along at 2.7% growth and should remain there for the next couple of years. Part of what is boosting GDP growth can be attributed to the new tax law, he said, but other factors are also playing a role.
Even higher interest rates don’t bother him, Costello said, noting that the Federal Reserve was expected to increase rates 4 times this year. Interest rates have been very low and the increases are just “normalizing interest rates. I believe a higher interest rate can add to the economy in the near term.” Banks will be more likely to make loans if they can get better returns.
Costello pointed out three “big buckets” and one smaller one that he said drive freight growth: consumer spending, construction, factory output, and inventory levels (the half bucket). And for the first time during this expansion, all three of the big buckets are doing well at the same time.
