This Week’s Forecast February 17-21, 2020

Manufacturing outlook:

The coming week will give some insights into the outlook for manufacturing activity in the Northeast region via the Empire State Manufacturing Index. The overall segment remains depressed and sustained rise is not expected through the first quarter.

Construction outlook:

There will be updates for housing and construction from housing starts, building permits, and homebuilder sentiment. Housing starts surged last month and reached a 13-year high. This week’s results for starts are not expected to maintain the same pace, so there will likely be a month-to-month decline. However, the overall growth trend is still robust for the segment. More housing starts activity leads to increased residential construction spending and will contribute to flatbed trailer activity in the coming months, applying upward pressure to rates and rejection rates.

Diesel fuel price outlook

The forecasts called for a huge supply/demand imbalance that far exceeds the most ambitious OPEC plans to cut output. Attempts by OPEC to reach an agreement with its non-OPEC allies to cut production further looked like they were going nowhere. There were bullish developments in the market: Libyan output remained mostly off the market, and a giant ExxonMobil refinery in Louisiana had a spectacular fire that did impact output, though for how long is uncertain.