Trailer manufacturers expected 2001 to get off to a weak start, but weren’t prepared for the "blood bath" that occurred in first quarter,
said Economic Planning Associates.
The company’s survey of manufacturers puts total shipments at 42,000 units, a 48.3% drop from first quarter 2000.
The weakness was widespread. First quarter van shipments totaled 31,300 units, down 50.4% from a year ago. Drop frame van sales rose 23%, but insulated van sales were down 40% and dry freight van sales dropped 54.4%. Shipments of non-van trailers were almost 41% below first quarter 2000.
“With a lackluster start to truck traffic this year, it appears that demand for new trailer equipment will limp along during the next quarter to two,” said Economic Planning President Peter Toja. Sluggish profitability, higher fuel costs, major hikes in insurance premiums, rising driver costs, a tighter credit environment, and low asset valuations have prompted many fleets to put investment programs on the back burner, he added.
Interest rate reductions, already boosting residential construction, should stimulate economic activity later this year and through 2002. That, plus improved economies of our major trading partners, should boost manufacturing growth which, in turn, means increased traffic flows, according to the firm.
Toja said they don’t expect much improvement in trailer demand during the second quarter, but sales should pick up in the second half of the year. "Given the expansion in economic activity anticipated throughout 2002, we look for a rebound in trailer shipments next year," he said.
The economic slowdown has also hurt sales of containers and chassis. After a strong 2000, first quarter 2001 shipments totaled only 3,400 units, less than half the 7,050 units shipped in first quarter last year.
Because of the disappointing start, Toja said they expect a significant reduction in container and chassis shipments this year with demand starting to pick up again in 2002.
For more information, contact Economic Planning Associates at (631) 864-4900.
Trailer Sales: Rough First Quarter But Better Times Ahead
Trailer manufacturers expected 2001 to get off to a weak start, but weren’t prepared for the "blood bath" that occurred in first quarter
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