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IT'S MORE THAN JUST OIL. IT'S LIQUID ENGINEERING.

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FAVORABLE GENERAL MARKET & ON-ROAD FREIGHT CONDITIONS*

INDUSTRY NEWS / Post date: 1 December 2014

 

 General Market Conditions:

  • US Economy: Increased at 4.6% quarterly rate in the 2nd Quarter of 2014.
  • Unemployment Rate: The US economy added 142,000 jobs in August 2014, and the unemployment rate changed little at 6.1%. Job gains occurred in professional and business services, and in health care.
  • Consumer Confidence: 92.4 in August 2014, changed +2.1 points vs July 2014 and +10.6 points vs YAGO. Consumer confidence increased for the fourth consecutive month as improving business conditions and robust job growth helped boost consumers’ spirits.
  • Consumer Price Index: CPI for August 2014 was -0.2% vs +0.1% the prior month, +1.7% over the past 12 months. Core CPI (all items minus food and energy) in August 2014 remained unchanged vs prior month (+0.1%) and +1.7% vs YAGO. Rising food and shelter prices were partially offset by declines in energy.
  • Building Permits: Decreased -5.6% for August 2014 vs July 2014; permits have increased +5.3% vs YAGO
  • Housing Starts: -14.4% in August 2014 vs +22.9% in July 2014; changed +8% in August 2014 vs YAGO
  • Construction Spend: During the first 9 months of 2014, construction spending amounted to $710.1 billion, 6.1% above the $669.3 billion for the same period in 2013.


On-Road Freight Conditions:

  • FTR’s Trucking Conditions Index increased in August 2014 to a reading of 9.10 continuing an upward trend that reflects an uneasily tight capacity situation. As market tightness continues, rate and service spreads are increasing between “good” and “bad” freight. Carriers are expecting demand levels for their services that are allowing them to choose what freight to haul while maintaining dependable workloads and increasing margins. TCI should remain at very positive levels for the foreseeable future with a strengthening economy suggesting potential for freight.
  • Jonathan Starks, FTR’s Director of Transportation Analysis, commented “with overall capacity remaining tight and continued cost pressures at fleets, we can expect to see freight rates moving higher into 2015. Spot rates are edging lower – from a very high level – but contract rates are still showing signs of acceleration. Growth in the use of outsourced capacity (i.e. broker and spot markets) is joining wage increases as a main driver of cost increases. Fleets are using more outsourced capacity, a segment in which regulatory impacts are especially strong.” *Source: FTR Freight Focus – Trucking Update, October 2014, ftrintel.com