Connecticut’s trucking industry is cautiously watching a recent slowdown in activity that follows a highly successful 2018, because it could be a harbinger of economic slowdown.
Freight hauling, truck orders and trailer orders all declined in November and December. And while January numbers crawled back up just a bit, there’s reason to think about whether those numbers are a sign of a coming recession for the state, said Joe Sculley, president of the Motor Transport Association of Connecticut.
“What made us start watching was the monthly tonnage numbers at the end of 2018 after having a really good January through October [of 2018],” Sculley said. “November and December, they both took a step backward. Our industry is always on the front end of whatever is about to happen economically, good or bad.”
Sculley and officials from the American Trucking Associations said the recent performance may be just a moderation of unsustainable 20-year-high numbers over the prior 12 months.
But since most consumer products and commercial materials spend a lot of time in trucks, the industry is often seen as an economic indicator. If less goods are being hauled around the country, an economic slump could be ahead.
The next few months will tell a lot about the regional economic conditions, Sculley said.
“If there is an economic slowdown, generally consumer spending declines if there’s not enough money in the economy for consumers and businesses to buy things, and that’s less freight to be moved,” Sculley said. “If truck orders are being cancelled, that means fleets are realizing they won’t have the freight to move.”
Connecticut has about 60,000 people employed in the trucking industry, including drivers, technicians, safety officials, dispatchers and other roles.
Overall trucking performance in 2018 was at a level not seen since the late-1990s economic boom.
“After monthly declines in both November and December, tonnage snapped back in January,” American Trucking Associations Chief Economist Bob Costello said in a statement Feb. 19. “I was very pleased to see this rebound. But we should expect some moderation in tonnage this year as most of the key sectors that generate truck freight tonnage are expected to decelerate.”
The ATA measures tonnage based on reports from member associations, and monthly reports are available on the ATA’s website.
In Connecticut, 94 percent of manufactured goods are moved by truck.
Costello said freight numbers rose 6.6 percent overall in 2018, higher than the 3.8 percent gain in 2017. November, December and January were all down compared to prior months, but they also all beat performance from the 2017-18 winter.
“The good news is that 2018 was a banner year for truck tonnage, witnessing the largest annual increase we’ve seen in two decades,” Costello wrote last month. “With that said, there is evidence that the industry and economy is moderating as tonnage fell a combined total of 5.6 percent in October and November after hitting an all-time high in October.”