Monday, February 18, 2008

Economic forecast: good

Be ready for a boost in our industry. I found article about housing interest drop which will have a ripple effect to boosting trucking.

Fed Fed Drops Interest Rate - How Will It Effect The Trucking Industry
By Noah Ostroff

The economy has been in a jack-knife lately with no end in sight. With businesses slowing at record paces, how will this effect the transportation industry, specifically the trucking industry?

Since 2006 our economy has been on a downward spiral. Some may say we have the media to thank for that one. The housing industry has become the center of attention in many media outlets over the last 2-3 years. First they said how good the housing market was, spurring up a housing boom from 2004-2006, then they began talking about the housing bubble, then it was on to the bubble has bursted. For some reason the general public has lost all control of what is good and bad anymore and they have turned to the media for their "expert" opinion.

With the housing market at all time lows, this has had a major effect on the trucking industry. Fortune 500 companies such as Toll Brothers Inc. (NYSE:TOL) have seen a major drop off in their sales around the country, thus effecting their manufacturing division as well as their transportation division.

Earlier this month, the Federal Reserve dropped interest rates 125 basis points, which should spur up a little activity in the housing market. With interest rates near all time lows, home buyers, and even investors must overcome their fear and get back into the market. Now is the time where millionaires are made. While sellers are looking to make a deal, buyers have to be looking to make deals.

Within the next 2 months we should see an increase in manufacturing activity throughout the country, ultimately getting the trucking industry back on track. At the next fed meeting, they are projecting a 25-50 basis point cut. This should also have a positive impact on our industry.

Article Source:—How-Will-It-Effect-The-Trucking-Industry&id=983881

If this prediction holds true we brokers need to be ready with reliable truckers to help transport the materials needed to support a robust housing growth. Even if the future is not as rosy as Noah predicts, if you are building your relationships daily, building up your reputation with integrity and going above and beyond your customer's expectations you will be a valuable asset to our industry.

Moving forward,

Jeff Roach

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