Truck tonnage as tracked by the American Trucking Associations (ATA) dropped 1.4% in January after staying flat last December
“Clearly, 2016 started soft for truck tonnage,” noted Bob Costello, ATA’s chief economist, in a statement. “There was a deceleration in freight volumes during the second half of 2015 which continued into the first month of 2016.”
He added that while the winter storms that occurred in January likely suppressed freight volumes some, the 1.4% decline indicates factors other than the weather are affecting tonnage.
For example, housing starts fell 3.8% from in January, the lowest level in three months, noted Lindsey Piegza, chief economist at Stifel Fixed Income, in a research note last week. She added that while housing starts are up 1.8% year-over-year, building permits also declined at the start of the year, albeit modestly, off 0.2%, with the major weakness in single-family permits, down 1.6%, the first month of decline since September.
“The hiccup continues in the housing market with building activity virtually flat over the past 12 months,” Piegza said. “While hardly a large net drag on growth, construction activity doesn't appear to be ramping up momentum as we head into the New Year.”
That’s one reason why ATA’s Costello said he “doubts” truck tonnage would have reached positive territory in January, even without the winter storms.
“So that tells me that the inventory situation continues to weigh on truck freight volumes,” he said. “The sooner the supply chain cleans out the excess stocks, the better for trucking.”