Economist Dr. Bob Diele, speaking at this year’s HDAD, says the economy’s expansion likely to continue through this year.
Photo credit: Photo courtesy of DK Communications
Looking at the “real” factors that impact the economy and trucking activity, economist Dr. Bob Diele says the outlook is good. He made his prediction during this year’s Heavy Duty Aftermarket Dialogue (HDAD), which took place in late January in Las Vegas.
Diele is president and founder of RDLB, an economic research and management consulting firm based.
HDAD is an outlook conference specifically directed toward the heavy duty aftermarket supplier industry. It is sponsored by the Heavy Duty Manufacturers Association (HDMA), an organization that represents companies participating in the Class 4 to 8 original truck equipment and aftermarket parts manufacturing industry.
Among his expectations:
- The economy’s expansion phase from 2013 likely to continue through this year.
Income and employment growth are the keys, spending on equipment will be the main driver and improved conditions overseas should provide a boost, he says.
- Major changes in fiscal and monetary policy are not expected in the near term because of a budget agreement and the changing of the guard at the Federal Reserve.
- Further adjustment, “some of it quite painful,” to structural changes in the economy will continue.
Dieli bases his predictions, not on Gross Domestic Product (GDP), but on Truckable Economic Activity (TEA). This is a measure of the trucking industry developed by specialized management consulting and market research firm MacKay & Company.
Most forecasters of conditions in the U.S. trucking industry use economic information, such as GDP, as the basis for their forecasts, he notes. But GDP is dominated by services, the demand for which fluctuates much less widely than does the demand for goods, so the cycles driving the demand for transportation – and for trucks – are made less severe than they would be if services were removed.
TEA helps measures what is moving by truck.
TEA five components, explains Stu MacKay, head of MacKay & Company. They are: consumption, investment, exports, imports and government spending on goods. TEA is computed using the constant dollar value – that is the inflation adjusted value – of the categories as reported by the Bureau of Economic Analysis of the Commerce Department.