November’s number revised downward and December posts decline, indicating softening at end of year
The American Trucking Associations’ (ATA) reported that 2018 was the best year since 1998 for its For-Hire Truck Tonnage Index. The advanced seasonally adjusted (SA) Index increased 6.6 percent for the year, its largest gain since the 10.1 percent increase in 1998. The Index posted a 3.8 percent increase in 2017.
“The good news is that 2018 was a banner year for truck tonnage, witnessing the largest annual increase we've seen in two decades,” said ATA Chief Economist Bob Costello. “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.”
The drop-off was more pronounced in December, which saw the For-Hire Truck Tonnage Index drop 4.3 percent to 111.9, from November’s 116.9. November’s final tally was revised downward from a 0.4 percent gain to a 1.3 percent decline. Compared with December 2017, the SA Index increased 1.4 percent, the smallest year-over-year increase in 2018, ATA noted. In November, the index was 5.8 percent above the prior year.
The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 107.8 in December, which was 7.8 percent below the previous month’s 117.0.
The data seems to correlate to broader economic indicators, which are suggesting a slowing economy. While full-year GDP is not available yet, economists are expecting it to be at or near its strongest since the end of the Great Recession.
ATA’s reported December decline and downward revision of November’s Index could be seen as the beginning of a broader economic slowdown. The government shutdown is preventing most government data from being released, though, preventing a full picture of the current economic environment.
“I think we have to be very careful,” he said during an interview at World Economic Forum in Davos, Switzerland. “I think sometimes people can start to build bad news on top of bad news.”
Abney said that holiday retail sales showed a “reasonably strong” economy, with retail estimated to be up 5.6 percent for the year. “That doesn’t really sound like a slowdown to me,” he added.
The Institute for Supply Management reported its December Purchasing Managers' Index dropped 5.2 percentage points from November to 54.1 percent and its New Orders Index dropped 11 percentage points to 51.1 percent. Despite declines, the indexes still indicate expansion.
“Comments from the panel reflect continued expanding business strength, but at much lower levels. Demand softened, with the New Orders Index retreating to recent low levels,” said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee. “Consumption continued to strengthen, with production and employment still expanding, but at much lower levels compared to prior periods. Inputs – expressed as supplier deliveries, inventories and imports – softened as well, with suppliers improving delivery performance, and inventories and imports declining.”