UCLA Anderson Forecast says Economic Recovery on Track
Ed Leamer, the director of the University of California Los Angeles (UCLA) Anderson Forecast, reported that trucking business activity showed a decline in January 2011 using a 12-year tracking model. The good news is that economic recovery continues to gain momentum, though the January decline does need explanation.
Leamer believes the reason for the January decline is hidden in seasonal variations after the Holiday Season, and some logistical movements being diverted due to the major storms hitting the region and the north east snow storms.
UCLA also provides the Ceridian-UCLA Pulse of Commerce Index which measures how US goods move between the factories, distributors and retailers and ultimately to the consumers. The Ceridian-UCLA index specifically measures the purchase of diesel fuel at over 7,000 nationwide truck stops. The results are broken down state-by-state, and for California the measure indicated a dip of 2.15% over the December index value.
The January decline has Pacific coast economists talking because November and December showed that trucking activity stabilized (just over 108 on the Index compared to 105.35% for January). In addition, the state-by-state breakdown allows for regional analysis to compare relative rates of activity. The Pacific region demonstrated the largest decline of any region in January 2011, even though the snowstorms drastically impacted the Northeast and North Central areas of the country.
Overall, the January index for the nation fell to 0.3%, mostly managing to retain the December performance. When year-on-year comparisons are made, nationally the measure improved by 3.14% in January 2011 - a welcome signal given that this is the 14th month of consecutive increases. Before the recession hit the country, California registered a value on the index of 101.7 in August 2007 - this was at the very start of the recessionary decline. In May 2008, the index fell to its lowest point of 87.35%, which puts the recovery of the index to above the 100-level into some positive perspective.
We have previously reported on the increasing activity within the trucking sector in previous posts. Both tractor and trailer sales are increasing for new units, and the used market for used semi trailers and trucks for sale is also demonstrating positive improvement. National and regional carriers are also reporting an increase in logistical orders and a shortage of drivers to fill job slots. Whilst all these indicators are encouraging for the state of the economy and the trucking industry generally, there is no room to break out the celebratory drinks yet - the economy is still in a fragile state as this small dip in the diesel index and the repercussions amongst economists demonstrates.