FCC Equipment Financing, a subsidiary of Caterpillar Financial Services, predicts that the U.S. economy will grow only about 1.5 percent this year, and freight will be flat or even down slightly for 2008.


These are among the conclusions in the FCC report, titled "FCC 2008 Economic Insight: An Annual Outlook on the Transportation Industry," produced by Caterpillar's economists. It provides a compilation of viewpoints on the current and future status of the U.S. economy and the North American transportation industries, including trucking, rail and motor coach.

Highlights of the report include:
• With many industries that lead the economy in decline and no clear sign of imminent and significant monetary stimulus, the U.S. economy is expected to grow only 1.5 percent in 2008.
• The implication for the trucking industry is that freight will be flat to down about 1 percent in 2008.
• New heavy duty vehicle purchases in the United States will be approximately 140,000 vehicles-up from 135,000 in 2007-and largely for replacement.
• Demand for midrange trucks will be down 17 percent in 2007, with about 120,000 vehicles purchased. In 2008, demand will be down another 10 percent from 2007 levels at 108,000 vehicles.
• Continued weakness in the housing sector will decrease demand for transportation related services for this industry.

FCC provides financing for mid-size to large private fleets and common carriers throughout the United States with medium or heavy-duty trucks (classes 6, 7 and 8), trailers and related transportation equipment.

The full report can be downloaded in a pdf format at http://www.fccef.com/economicinsight.asp. Companies can also register to receive the report and quarterly updates in the mail, on the Web site or by calling FCC at 1-800-207-9286.