The relationship between the economy and the trucking industry is closely intertwined. According to Reuters, “Trucking accounts for 70 percent of U.S. shipment tonnage, and is key to supplying the manufacturing, construction and retail sectors, all of which showed sluggishness in the first quarter. The most common factors for the decline include the U.S.-China trade war and weakness in the Farm Belt.” When the orders slow down, so do the miles driven by truck drivers across the United States, and that means less fuel being consumed and lower paychecks for drivers. However, the American Trucking Associations tonnage index is still at a healthy level at 117.4 compared to 2008-2012 during the Recession when levels were well below 90.
As GDP (Gross Domestic Product) slips from 3.4% at the end of 2018 to 2.2% through Q1 of 2019, unemployment remains at a historical low of 3.8%. Even as labor markets remain tight, there still lies trade-related uncertainty, whether it be with China or the European Union, weighing on manufacturing activity locally and nationally, which in turn will dictate the balance of the year’s economic potential growth or contraction. Until the other foot drops with trade-related tensions, only time will tell.