Heavy equipment purchasing is stalled with no jump start in sight, FTR Transportation Intelligence analysts said Thursday in the company's November State of Freight webinar.
Particularly concerning to FTR CEO Eric Starks is growth being flat in both trucks and rail cars. Rail cars have a longer lifespan than trucks, which fall at the other end of the freight transportation lifespan, and for both ends to be negative "shows a very bad environment."
[RELATED: ACT presents ‘obstacle-strewn’ 2026 sales outlook]
Investments are only part of the concern analysts have. The other side is consumption, which drives a larger share of the U.S. economy. Heavy-duty truck orders have been negative year over year every month this year and third quarter rail car orders are down 41%. Net orders for both trucks and rail cars are down 30% year over year.
"They are both struggling," Starks says.
[RELATED: Trailer market remaining in 'stay afloat' mode]
Bill Witte, economist, says so far this year, the economy is doing better than expected earlier this year. But a slowdown is coming, followed by a creeping recovery, all of it exacerbated by a persistent undercurrent of uncertainty. He expects lower consumer confidence as well as issues in the labor market.
"We really have moderated a little bit more of our expectation for slowdown, but it's still in that negative territory, or at least flat," Starks says. "We don't see a huge amount of freight growth. That's something we're going to have to keep an eye on longer term."
Witte is forecasting consumption to fall from a level of about 2% down to around 1%, which he says is not a collapse, but he can't rule that out, either.
"A substantial part of this slowdown is that we think during the last couple of quarters, we've had people buying things in anticipation of the tariffs," Witte says. "I think that was stealing, to some extent, consumption from later in the year."
The labor market is another concern for the FTR team. Witte says he's not forecasting a "disastrous" rise in unemployment, but without significant additions to the labor force in the U.S., it's a segment that bears watching.
"I'm becoming very, very concerned about the labor market," Starks says. Witte says the underlying demographics of the American labor supply are negative and with anti-immigration sentiment in the federal government, those demographics are unlikely to improve.
Underpinning everything is a persistent level of uncertainty that's a less than ideal environment for business growth and investment.
"Policy is a mess," Witte says. "Monetary policy is goofed up. Fiscal policy is goofed up. Trade policy is really goofed up."
Among the confusion in trade policies are the laundry list of tariffs issued this year. At the beginning of 2025, FTR says, the effective tariff rate in the U.S. was around 2%. Now, it's closer to 10%.
"That's a pretty big increase," Starks says. "This is inflationary pressure in the system as it relates to imports."
As tariffs have been announced, deals struck, deals rescinded and new tariffs announced, Starks says this rollercoaster has generated a level of anxiety that's keeping businesses' dollars in their pockets when they can, either holding on to it just in case or waiting for prices to come down. He urged the Trump administration to create some certainty to encourage businesses to spend.
"Most people are electing to just hold off on making any purchases," he says.
Those downside risks have FTR predicting a 35% chance of a recessionary environment in the next four quarters. That's down from the 45% risk over the summer, but the picture is still murky, Starks says.
"The word uncertainty has been paramount over the last six months," he says.
