By Robert Dieli, RDLB, Inc., in-house economist at MacKay & Company
This happens to be one of those situations where the lead time between the writing of a piece and its appearance can actually be helpful to both the person reading the article and the person writing it.
As we put “pen to paper” (actually as we click away on our keyboard) we are looking at an industry environment rife with positive “soft” data. What are “soft” data? The results of surveys about business confidence and spending plans. Since the turn of the year, there has been a surge in business confidence and a rise in spending plans for both people and equipment. What we have not yet seen, for reasons that we shall presently ex-plain, is the associated uptick in the hard data. What are “hard” data? The number of units reported in the last edition of Class 8 truck sales, for one.
And there you have the reason for the question at the top of the piece.
Our expectation is that some of the confidence and optimistic plans will translate into more spending and hiring. The problem is the lead time associated with each of the efforts.
One activity where we think results should show fairly quickly is hiring. The decision to increase payrolls is usually made quickly and the hiring process is straightforward. Of equal importance, the reporting interval is short. The Bureau of Labor Statistics updates the truck transportation employment figures every month.
The data relating to other types of spending takes longer to come to light, both because of the process involved in the spending itself and then the report-ing of same. In the case of a Class 8 truck, the buyer spec’s the truck and places an order. Then the OEM has to slot that truck and build it. Then the OEM reports it to WardsAuto, who then has to compile and publish the numbers. Then the various media outlets have to show you the numbers. All of this can take months. In the case where the spending figures get aggregated into statistics like Gross Domestic Product, or our own metric Truckable Economic Activity (TEA), the reporting interval can be even longer.
