As the economy moves into 2003, there are several sectors that are rolling and at least as many others that are limping. Here's a rundown on where there's likely to be freight and what to stay away from, at least early in the year.
Hot: Housing. Both new and existing home sales are winding up higher in 2002 than last year, which was also a record. It's doubtful that 2003 can be another chart-topper. The combination of favorable population trends, low interest rates, and (slowly) rising personal income will keep the demand for housing strong. Movers will benefit, of course, but so will building-materials haulers and the carriers that bring those heaps of furniture, appliances and shrubbery to the stores and from the stores to the homeowners.
Not: Other construction. Private nonresidential construction is not likely to revive until the second half of 2003 at best. Government-funded construction is coming off a strong year, but states will have to slash spending to balance their budgets, and the federal government is moving its spending toward defense and away from most domestic categories. Declining construction of buildings, roads and other public works will keep millions of truck trips from happening.
Hot: Autos. Sales of new cars and light trucks have yoyo-ed in recent months. But the same factors that are keeping home sales strong will boost autos. The obvious beneficiary is auto-transporters, but carriers that serve auto plants and their parts makers will also stay busy.
Not: Other durables. Most durable-goods manufacturers are still in the doldrums. Makers of products as diverse as airliners, trucks and construction equipment, telecommunications and power plants still are wondering how deep the bottom is.
Hot: Healthcare. Hospitals, doctors, clinics, laboratories, drug and medical-device makers, and even pharmacies are building more facilities and filling them with a wide variety of “stuff” that generates more truck trips.
Not: Other business and consumer services. The business meeting, travel and lodging industries are still facing double-digit declines. Consumers have slowed or trimmed their spending on several categories of entertainment and leisure activities. These cutbacks have hit a few specialized carriers hard and have contributed to the overall slowdown for general-freight haulers.
Hot: Imports. A strong dollar and an economy that remains stronger than most of our trading partners' means lots of business for container haulers and air-freight partners.
Not: Exports. Some of the strongest export categories require little or no trucking to get the goods or services to the customer — airliners, most agricultural products, financial services, and entertainment, for instance. Nevertheless, a downturn in those industries means they are ordering less, building less and hiring fewer workers — and, thus, generating fewer truck trips domestically.
Hot: Defense spending. Much of the record jump in this year's defense appropriation is going overseas or into personnel expenses. But some of it provides business for trucks that move military supplies or relocate personnel and their belongings.
Not: Other procurement. Government offices, schools, prisons and other facilities buy a lot more than paper. State and local governments have had rapidly rising purchases of goods, most of which arrived by truck. That market won't return until recovery in the “real” economy and the stock market bring in more tax revenues.
The bottom line: The markets that are hot now are almost entirely different from the leaders of the pack two years ago. Fortunately, trucks, unlike many other assets, can go where the freight is — if their owners figure out where to send them in time.