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Tuesday, January 28, 2014

Manufactured Goods Shipments Increase, Positively Affect Demand For Truck Orders

When you consider shipment volumes for U.S. manufactured goods, many economic experts profess that you are getting a glimpse at the health of the U.S. economy.

Class 8 truck orders finished 2013 up 17% compared to 2012, while medium-duty orders were up 10%. The year was closed out on a high note, with December Class 8 orders up 50%, representing the strongest month for orders since March 2006.

Economic health and shipping volumes are giving trucking industry experts reason to be optimistic about 2014. "The US and Canada did the heavy lifting for Class 8 orders in December," said Kenny Vieth, president and senior analyst at ACT Research. He also said Mexico and non-NAFTA orders moved sideways at low levels.

Shipments and new orders for manufactured goods in the U.S. both hit their highest levels on record in December, according to a newest U.S. Commerce Department report.

Shipments, up six out of the last seven months of 2013, increased 1% in November from the month before, while new orders, up two out of the last three months, gained 1.8%. Both are records, which go back to 1992.
December saw medium-duty truck orders fall month-over-month, but for the full year Classes 6-7 truck orders were up 20% compared to 2012 and Class 5 orders down 16%.

"Strengthening domestic demand has been supported in the second half of the year by improving economic activity that has translated into improved profits for truckers. The softness in December's Classes 5-7 orders is viewed as a temporary pause following two very strong order months for medium duty."

Shipments of manufactured durable goods, those designed to last at least three years, up for four straight months, increased 1.8% and is also at the highest level on record, while shipments of machinery jumped 4.2%. Nondurable goods shipments increased 0.3%, following three straight monthly declines.

This news follows a separate report form the nation's purchasing managers that factory activity the last months of 2013 were at about a 2.5-year high while a separate government report shows the nation's manufacturers added 66,000 jobs in July through November.

Overall, the needle is moving in the right direction and North American trucking is going to feel the demand increase over the first quarter of 2014.