Economy, Trucking Show Gradual Growth, Fed ‘Beige Book’ Report Says
The U.S. economy continued to expand gradually in July and August, while trucking and logistics services saw steady to moderate growth, the Federal Reserve said Wednesday.
Most of the Fed’s 12 districts reported higher retail activity, including automobile sales, though several said gains were small, the Fed said in its latest “beige book” report on U.S. economic conditions.
The Atlanta and Dallas districts reported steady to increasing demand for trucking services, while Philadelphia area logistics firms and motor carriers reported a relatively sluggish start to the traditional “freight season.”
The Cleveland district reported that freight volumes, which had slowed midway through the second quarter, had stabilized or started to turn around.
Some Cleveland area executives reported that rising prices for new trucks combined with difficulty in obtaining credit was limiting growth opportunities, especially for small carriers. Driver recruitment remains difficult, resulting in some wage pressures.
The outlook for the remainder of 2012 remains positive, though growth is not expected to be as strong as had been forecasted at the beginning of the year, Cleveland district contacts said, adding that apart from fluctuating diesel prices, costs associated with truck maintenance held steady.
Several contacts in the Richmond, Va., district noted an increase in demand for truck drivers and according to recent Fed surveys, wages in both the manufacturing and service sectors were growing at a slightly slower pace than a month ago.
Trucking contacts in the Atlanta district indicated that freight demand and capacity remained closely in balance, but said that regulatory issues, increasing costs and a tight driver market continue to put pressures on bottom lines.
Reports from Dallas district transportation service firms suggested a slight increase in activity. Trucking firms said cargo volumes increased over the reporting period, partly due to more oil- and gas-related business, the Fed said.
The Fed releases its beige book eight times a year. Wednesday’s report, which covered the period of July 9 through Aug. 20, was prepared by the Boston Fed.
