MacKay reports Truckable Economic Activity reaches record high

user-gravatar
Updated Mar 14, 2012

With its newly released TEA Newsletter, MacKay & Company reports that paced by strong contributions from four of its five major components, Truckable Economic Activity reached a new record high of $8.8 trillion in the fourth quarter of 2011.  That result helped TEA post a 4.5 percent gain for the full year, MacKay & Company says.

According to the company, consumption is the largest component of TEA and includes spending on durable and nondurable goods, and was up 4.3 percent in 2011. Investment TEA counts spending on plant, equipment and structures, as well as inventory movements, and is the second largest part of TEA, MacKay says. This category saw a 5.3 percent rise in 2010, reversing a string of year-over-year declines that began in 2007.

Exports also continued to expand at an 8.2 percent pace, while imports, which are counted as positive in TEA because they generate domestic truck movements, were up 6.5 percent. Spending in the government sector, which the company says is the smallest part of TEA and is dominated by activity at the state and local level, was down 4.2 percent.

The 4.3 percent year-over-year gain in TEA was far greater than the 1.7 percent increase in Gross Domestic Product, and, MacKay & Company thinks that is a better representation of conditions in the trucking sector than that portrayed by GDP.

The company says it expects Total TEA to continue to move upward over the course of 2012, with most of the forward progress coming from consumption and investment. Government spending also is likely to continue to be a drag through at least the first half of the year.

Learn how to move your used trucks faster
With unsold used inventory depreciating at a rate of more than 2% monthly, efficient inventory turnover is a must for dealers. Download this eBook to access proven strategies for selling used trucks faster.
Download
Used Truck Guide Cover