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Economists forecast weak trucking market
By Randy Grider
A panel of economists painted a bleak outlook for the near future Oct. 22 at the American Truck Associations’ annual Management Conference and Exhibition in Orlando.
Because of a slumping housing market, a rebound in trucking will take longer than previous forecasts, probably arriving in the second half of 2008, said ATA Chief Economist Bob Costello. “When things turn around, it will be very quick,” he added.
Costello said freight tonnage, down 2.2 percent from last year, is in a “recession environment.” Overall loads are flat.
Costello said the while there are other factors keeping freight soft, “the housing market is the No. 1 reason tonnage is down.”
Nigel Gault, Global Insights’ group managing director of the North American Macroeconomic Service, said because of housing woes and a tighter credit market, the U.S. economy will slow to 1.5 percent growth for the rest of the year and less than 1.5 percent growth during the first months of 2008. He added customer spending is expected to be slower than normal during the holiday season.
The housing slump is a “downturn of historic proportions,” Gault said. “There is a bloated supply of houses – in the area of eight to 10 months’ supply on the market. I see the housing market to continue downward, bottoming out in the first half of 2008. It still has a long way to fall.”
Gault said he expects the Federal Reserve to cut interest rates as many as two more times before the end of the year.
“Still, I place the odds of a recession at about 30 percent,” Gault said. “What helps is a strong global economy.”
National Association of Manufacturers Chief Economist David Heuthers said one positive result of the weak U.S. dollar has been stimulation of the U.S. export market.
Another positive note amid the gloom, Costello noted, is that the driver shortage has eased.
The panel was moderated by FoxNews Business Correspondent Stuart Varney.
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