The three year slide in trailer shipments is over, according to Economic Planning Associates Inc (EPA Inc) of Smithtown, New York.
The industry shipped 174,000 trailers last year—up 25.9% from what EPA Inc’s Peter Toja calls the “dismal” 2002 level of 138,200 trailers. The van segment led the way with a 32.8% gain. Shipments of dry-freight vans were particularly strong, growing 38.9% last year.
Excluding van shipments, the rest of the industry increased 6.8% over the 2002 level.
The year ended strong. According to EPA Inc’s latest survey of the trailer manufacturers, manufacturers shipped 45,000 trailers during the last three months of 2003, 4.4% higher than the third quarter, and 8.2% above the corresponding period of 2002.
“At the same time, the improvement in the overall economy last year and the continued high levels of construction activities prompted a rebound in log and pipe as well as in all other non-vans in 2003,” Toja said. “In 2004, we anticipate continued growth in shipments of a variety of trailers as our expanding economy leads to greater traffic flows and improvements in trucking revenues and profitability. At the same time, low interest rates, moderate inflation, and the more liberal depreciation guidelines of the Tax Stimulus Bill will facilitate the investment decision. In addition, the lack of interest in new trailer equipment during recent years has served to further age the existing fleet which will intensify replacement pressures as we proceed through 2004 and into 2005.”
The growth in U.S. economic activity moved into high gear in the second half of last year, Toja said. “Recent revisions indicate that real GDP accelerated at an 8.2% clip (annualized rate) in the third quarter, while preliminary figures point to a 4.0% gain in the fourth quarter. In addition to the robust advance in consumer spending, no doubt due to the July tax cut, strong growth in productivity induced income gains, rising consumer confidence, a perception of easing in the difficult job market, and a revival in demand for business equipment added to last year’s second half performance. Surprisingly, inventories continued to be lean, leading to the supposition that as final demand continues to expand, production will have to be boosted to not only supply the additional demand but to restock pipeline inventories in the system. During the next year, moderate inflation, low interest rates, continued growth in consumer spending, a rejuvenation in business investment, and stronger foreign demand for our products will propel GDP growth.”
A complete report of the survey, including short- and long-term forecasts for individual types of trailers, containers, and chassis will be contained in the March 2004 edition of EPA Inc’s quarterly Truck and Trailer report the company sends to its clients.