Last week in December — time for a year in review. I saw one of the Smothers Brothers (Tom) died this week, which is sad, but it is not that kind of year in review I had in mind. More focused on the truck parts aftermarket.
When this year started, our economist stated all the signs are there for a recession in 2023 or we were recession eligible. Eleven months later, no recession but the signs are all there still for a recession in 2024 and maybe stronger. I believe most folks are happy we missed a recession in 2023. Can we hope for the same in 2024? Yes (there is always hope), but time will tell.
Inflation has decreased (the rate of increase). Employment numbers have overall been good, although we have seen a decrease in the number of people employed in truck transportation. This has been a leading indicator for the start of a recession. Employment for this sector reached a peak in January and shows no signs of a new peak soon.
Truck transportation prices tracked by the Bureau of Labor Statistics for both long distance trucking and local trucking have also declined since the beginning of the year. The leverage on pricing has moved back from fleet to shippers.
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Fleet utilization from our quarterly DataPulse Report for the year has been good — but not at levels seen in 2022. Third quarter fleet utilization of 2023 came in at 84.9%, this was 86.2% in 2022.
On a positive note, for future aftermarket demand, retail sales came in stronger than expected in 2023 for those who forecast these numbers, although this is slowing as well and the forecast for next year is down compared to 2023.
