There will be substantial growth throughout the trucking industry in 2004, according to economists that spoke at the National Truck Equipment Assn.'s (NTEA) 2004 Economic Outlook Conference.
The economists said the improved economic performance will have a very positive impact on truck and truck equipment sales as users replace aging fleets. They also see a good year for the freight forwarding and truck renting and leasing industries.
Kenneth Kremar of Eddystone, PA-based Global Insight's Industry Practices Group said that freight forwarding activity is expected to grow 4% by year-end, 5% in 2004 and an additional 4% in 2005.
"The freight forwarding industry accounts for more than 650,000 trucks," Kremar said. "Growth in that market will create significant demand in Class 8 truck sales regardless of what happens in the other class ranges."
In terms of the overall economy, the gross domestic product (GDP) is expected to grow over 4% in 2004, increasing the demand for labor. This will in turn increase national income, putting the U.S. economy in a "virtuous cycle," NTEA said.
"The 3% to 3.5% growth in GDP so far in 2003, has not been high enough to generate increased demand for labor," said Eli S. Lustgarten, managing director of H.C. Wainwright & Co. Inc. "However, in the fourth quarter of 2003, and the first half of 2004, GDP growth is expected to exceed 4%, and an increase in demand for labor should occur in the second quarter of 2004."
The rate of inflation is forecasted to fall slightly in 2004 but not enough that deflation will occur, according to Ed Nosal, senior economic advisor for the Federal Reserve Bank of Cleveland.
"Productivity is a more important factor in the current slow growth of the U.S. job market than the exporting of jobs," said Nosal.
Steve Latin-Kasper, director of market data & research for NTEA, added that there is an increasing amount of importing and exporting, which is a sign of increasing global economic activity.
"There are growing numbers of truck equipment manufacturers that export and this continues to be good news for them," said Latin-Kasper.