Economic Planning Associates' latest survey of trailer manufacturers puts 1999 shipments at 301,800 units, up 7.7% from 1998. But data also indicates that the unwinding of previously strong momentum has begun.

After year-over-year gains of 9-11% in each of the first three quarters, fourth quarter 1999 shipments flattened out. "This marked slowdown was widespread among all trailer categories with few exceptions," said EPA President Peter Toja.
Continued growth in insulated trailers and a modest gain in dry freight vans in the fourth quarter kept that segment just inside the plus column -- up 1.3% from 1998. In the non-van category, increases in low bed and tank shipments were more than offset by declines in platforms, bulk and all other non-vans, Toja said. As a result, fourth quarter non-van shipments were 2.7% below the year ago level.
A closer examination of the quarterly data showed that after hitting the peak quarterly level of 78,500 units in the second quarter of 1999, trailer shipments eased to 76,300 in third quarter, then dropped to 71,600 in fourth quarter.
"While the U.S. economy remains extremely healthy, this slowdown in trailer demand coming into the year 2000 portends further quarterly easings as we proceed through the year," Toja said. "The softening in demand will be exacerbated by the strong run up in new equipment purchases from 1997-1999, higher fuel oil prices which are squeezing the profits of major fleets and causing some small and medium size carriers to park equipment, the steady upward trend in interest rates which raises costs of purchasing and/or leasing, continued pressure to hike driver pay and benefits, and the prospect of increased insurance premiums."
But a number of positive factors will limit the decline, he added. Consumer spending will remain upbeat with rising stock market and home values and high employment. Manufacturing activity accelerated during the second half of 1999 and that momentum has spilled into 2000. More manufacturing expansion is expected with worldwide economic recovery.
"More importantly, our NAFTA partners turned in stellar economic performances last year and are expected to do as well this year, especially with the rise in oil prices," he said.
Construction activities are slated to slow somewhat this year, but the large spendouts coming from the current highway program should sustain trucking volume, he noted. Modest improvement in agriculture exports should help farmers. If crop prices increase, some equipment replacements in that segment should occur this year or next.
For more information on specific trailer markets contact Economic Planning Associates at (631) 864-4933.