august2021 - 37

ECONOMI C OUTLOOK
visible, but truck parts overall are harder to
come by, from aftertreatment parts to tires.
Limited production, due to plant safety
measures lowering capacity, and less availability
of raw materials, such as steel and rubber,
have both hindered the ability of equipment
manufacturers to provide enough parts.
Two other main areas of concern, for
different reasons, are Truckable Exports and
Truckable Imports. In the case of Truckable
Exports, we are having problems with the
demand for our exports because of continued
disruptions in foreign economic activity. The
pandemic is global, and many of our customers
are still under more serious constraints than
in North America. The result is that they are
still not buying as much as they did previously.
With Truckable Imports, the problem is the
growing inability to move goods through the
supply chain. We have bottlenecks in all types of
transportation as well as a severe imbalance in
the availability of shipping containers. Most of
these difficulties will resolve over time, but that
does not make them any less problematic now.
1152100381 | mathisworks | Getty Images
Trucking industry faces
post-recession blues
The 2020 recession was swift and severe, and supply chain
issues are among the bumps in the road to overcome.
In July, the National Bureau of Economic
Research (NBER), through its Business Cycle
Dating Committee, marked April 2020 as the
trough of the pandemic-induced recession.
This was determined via real GDP and real
GDI (gross domestic income)). Because the peak
occurred in February 2020, the full recession
was two months long, the shortest in U.S. history.
It was as severe as it was swift, with 2020
Q2 GDP dropping 32%.
Now that it is over, we can begin to turn our
full attention to the process of recovery and
expansion.
By Robert Dieli
ECONOMIST, MACKAY & COMPANY AND PRESIDENT,
RDLB, INC.
MacKay & Company specializes in market research for
commercial trucking, construction equipment, and
agriculture machinery. The company provides strategic
research and analyses to vehicle and component manufacturers,
distribution and service channels, industry
associations, and private equity firms. With a long career
managing portfolios and coordinating domestic economic
forecasting programs, Dieli began RDLB, Inc. in 2001. In
this role, Dieli serves as an advisor to many firms in the
truck, consulting, and financial services sectors. He is also
an economist with MacKay & Company.
Over the past several months, we have been
discussing with you about current and prospective
conditions in the trucking economy using
two of our several analytical tools. Truckable
Economic Activity (TEA) is the metric MacKay
& Company uses to track developments in the
overall trucking economy, comprising five key
elements: Truckable Consumption, Truckable
Investment, Truckable Imports, Truckable
Exports, and Truckable Government.
The most recent reports we have about TEA
and its components suggest that our forecast
of continued expansion (with some bumps
along the way) in the trucking economy is playing
out pretty much as expected. Truckable
Consumption, the largest part of TEA, has made
further progress as the reopening of the economy
has proceeded. Truckable Investment, likewise,
has made gains as construction activity resumed
and manufacturing regained its balance.
Areas of concern
Of concern going forward, however, are the
effects of supply chain links that have led
to some production interruptions. The semiconductor
shortage has been one of the most
In the case of Exports,
we are having problems
with the demand for
our exports because of
continued disruptions in
foreign economic activity.
Looking ahead
The last component of TEA is Truckable
Government. Here we are waiting for news
from legislatures around the country. With
the federal infrastructure bill still pending,
this metric is still in flux. New spending would
unleash of a flurry of trucking activity and
drive this metric up. This is also the time of the
year when state budgets are enacted. We will
know a great deal more about these matters by
the end of the third quarter.
The decision by the NBER to limit the recession
months to the period during which the
economy was contracting under the immediate
effects of the pandemic changes the way we look
at what has happened in the trucking economy
since May of 2020, which by their reckoning
marked the beginning of an expansion.
While the TEA data have indicated a
rebound from the worst of the pandemic, their
course and composition did not suggest that
the rebound from that event was anywhere
near complete. As a result, we would argue that
rather than having moved into the expansion
phase of the business cycle, the trucking economy
is still in the recovery stage and appears
likely to stay there for the rest of the year.
We will be getting a fresh batch of statistical
information about TEA very soon, and we
are hopeful that information will help us to
better identify the risks and opportunities for
the trucking economy in the months ahead.
August 2021 | FleetMaintenance.com
37
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august2021

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